O'Reilly Automotive

“New store sites are strategically located in clusters within geographic areas that complement our distribution network in order to achieve economies of scale in management, advertising, and distribution. Other key factors we consider in the site selection process include population density and growth patterns, demographic lifestyle segmentation, age and per capita income, vehicle traffic counts, vehicles in operation, number and type of existing automotive repair facilities, and competing auto parts stores within a predetermined radius.”

Annual report 2025A · The company itself

“Grow Sales in Existing Stores: Profitable comparable store sales growth is also an important part of our growth strategy. To achieve improved sales and profitability at existing O’Reilly stores, we continually strive to improve the service provided to our customers. We believe that while competitive 7 ​ pricing is an essential component of successful growth in the automotive aftermarket business, it is customer satisfaction, whether of the DIY consumer or professional service provider, resulting from superior customer service, that generates sustainable increased sales and profitability.”

Annual report 2025A · The company itself

“Our business is influenced by a number of general macroeconomic factors that impact both our industry and consumers, including, but not limited to, inflation, including rising consumer staples; fuel and energy costs; unemployment trends; interest rates; and other economic factors.”

Annual report 2025A · The company itself

“The decrease in DIY customer transaction counts was driven by pressured consumer spending on discretionary categories and broader industry pressure on certain hard part categories.”

Annual report 2025A · The company itself

“We compete on the basis of customer service, which includes merchandise selection and availability, technical proficiency, helpfulness of store personnel, price, store layout, the Omnichannel experience, and convenient and accessible store locations.”

Annual report 2025A · The company itself

“We continuously refine the inventory levels and assortments carried in each of our stores and within our network, based in large part on the sales movement tracked by our inventory control system, market vehicle registration data, failure rates, and management’s assessment of the changes and trends in the marketplace.”

Annual report 2025A · The company itself

“Store Locations and Size: As a result of our dual market strategy, we are able to profitably operate in both large, densely populated markets and small, less densely populated areas that would not otherwise support a national chain selling primarily to the retail automotive aftermarket.”

Annual report 2025A · The company itself

“Overall demand for products sold in the automotive aftermarket is dependent upon many factors in the countries in which we operate, including the total number of vehicle miles driven, the total number of registered vehicles, the age and quality of these registered vehicles, and the level of unemployment.”

Annual report 2025A · The company itself

“O’Reilly is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories across North America, selling our products to both do-it-yourself (“DIY”) and professional service provider customers, our “dual market strategy.””

Annual report 2025A · The company itself

“The extensive product line offered in our stores consists of new and remanufactured automotive hard parts, maintenance items, accessories, a complete line of auto body paint and related materials, automotive tools, and professional service provider service equipment.”

Annual report 2025A · The company itself

“INDUSTRY ENVIRONMENT ​ For each of the countries in which we operate, the automotive aftermarket industry includes all products and services purchased for light and heavy-duty vehicles after the original sale and is made up of four segments: labor share of professional service provider sales, auto parts share of professional service provider sales, DIY sales, and tire sales.”

Annual report 2025A · The company itself

“In addition, the trend toward consolidation among automotive parts suppliers, as well as the off-shoring of manufacturing capacity to foreign countries, may disrupt or end our relationship with some suppliers and could lead to less competition and result in higher prices.”

Annual report 2025A · The company itself

“We purchase automotive products in substantial quantities from over 655 suppliers, the five largest of which accounted for approximately 23% of our total purchases in 2025. Our largest supplier in 2025 accounted for approximately 8% of our total purchases and the next four largest suppliers each accounted for approximately 3% to 5% of our total purchases.”

Annual report 2025A · The company itself

“Growth Strategy ​ Aggressively Open New Stores: We intend to continue to consolidate the fragmented automotive aftermarket. During 2025, we opened 207 net, new stores. In 2026, we plan to open 225 to 235 net, new stores, which will increase our penetration in existing markets and allow for expansion into new, contiguous markets.”

Annual report 2025A · The company itself

“Selectively Pursue Strategic Acquisitions: The automotive aftermarket industry is still highly fragmented, and we believe the ability of national auto parts chains, like O’Reilly, to operate more efficiently and effectively than smaller independent operators will result in continued industry consolidation. Our intention is to continue to selectively pursue strategic acquisitions that will strengthen our position as a leading automotive aftermarket parts supplier in existing markets and provide a springboard for expansion into new domestic and international markets.”

Annual report 2025A · The company itself

“We have no long-term contracts with material purchase commitments with any of our suppliers, nor have we experienced difficulty in obtaining satisfactory alternative supply sources for automotive parts. We believe that alternative supply sources exist at competitive costs for substantially all of the automotive products that we sell.”

Annual report 2025A · The company itself

“We expect to continue to make acquisitions as an element of our growth strategy.”

Annual report 2025A · The company itself

“O’Reilly is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories across North America, selling our products to both do-it-yourself (“DIY”) and professional service provider customers, our “dual market strategy.””

Annual report 2025A · The company itself

“OVERVIEW ​ We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, Mexico, and Canada. We are one of the largest North American automotive aftermarket specialty retailers, selling our products to both DIY customers and professional service providers – our “dual market strategy.””

Annual report 2025A · The company itself

“Our stores also offer enhanced services and programs to our customers, including used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction through our trusted VeriScan technology, which provides diagnostic information with possible repair fixes; referrals to trusted local repair shops; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; professional paint shop mixing and related materials; and machine shops.”

Annual report 2025A · The company itself

“O’Reilly is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories across North America, selling our products to both do-it-yourself (“DIY”) and professional service provider customers, our “dual market strategy.””

Annual report 2025A · The company itself

“In 2025, we derived approximately 50% of our sales from our DIY customers and approximately 50% of our sales from our professional service provider customers. Historically, we have increased our sales to professional service provider customers at a faster pace than the increase in our sales to DIY customers due to the more fragmented nature of the professional service provider business, which offers a greater opportunity for consolidation. We believe we will continue to have a competitive advantage on the professional service provider portion of our business, due to our systems, knowledge, industry-leading parts availability, and experience serving the professional service provider side of the automotive aftermarket, augmented by our approximately 825 full-time sales staff dedicated solely to calling upon and servicing the professional service provider customer.”

Annual report 2025A · The company itself

“To develop our continued relationships with professional service providers and installers, we employ Territory Sales Managers in all major markets to ensure complete sales territory coverage and personalized service for professional customers. Flyers, quick reference guides, and catalogs are distributed on a regular basis to all professional service providers, including paint and body shops and fleet maintenance customers to encourage brand and program awareness. In addition, our professional customer program also offers a proprietary ordering mobile application, business ecommerce platform called www.OReillyPro.com, dedicated Professional Service Specialists in stores, multiple daily deliveries, and access to training opportunities, shop management, maintenance supplies, and the Certified Auto Repair program, which offers professional service providers with the business tools they need to profitably grow and market their business.”

Annual report 2025A · The company itself

“Our Omnichannel growth strategies reflect the continued evolution of customer preferences in researching and completing purchases. More than ever before, our customers’ purchase decisions are informed by a range of interactions, whether in-person, over the phone, or through a variety of digital channels, as they seek to find the professional parts knowledge and product availability they need to meet their automotive repair and maintenance needs. Our Omnichannel growth strategies are focused on offering our customers an enhanced and seamless research and buying experience through any of these channels.”

Annual report 2025A · The company itself

“Marketing ​ Retail and Online Marketing: Our integrated marketing strategy and Omnichannel efforts include national media channels, in-store, digital, and social media activation, as well as personalized experiences through e-mail and text messaging and marketing the O’Reilly brand through automotive event sponsorships and on-site appearances throughout the country. Our O’Rewards loyalty program encourages repeat customers, as they accumulate points from their O’Reilly purchases that are redeemable for rewards at various purchase levels.”

Annual report 2025A · The company itself

“Our Omnichannel growth strategies reflect the continued evolution of customer preferences in researching and completing purchases. More than ever before, our customers’ purchase decisions are informed by a range of interactions, whether in-person, over the phone, or through a variety of digital channels, as they seek to find the professional parts knowledge and product availability they need to meet their automotive repair and maintenance needs. Our Omnichannel growth strategies are focused on offering our customers an enhanced and seamless research and buying experience through any of these channels.”

Annual report 2025A · The company itself

“Marketing ​ Retail and Online Marketing: Our integrated marketing strategy and Omnichannel efforts include national media channels, in-store, digital, and social media activation, as well as personalized experiences through e-mail and text messaging and marketing the O’Reilly brand through automotive event sponsorships and on-site appearances throughout the country. Our O’Rewards loyalty program encourages repeat customers, as they accumulate points from their O’Reilly purchases that are redeemable for rewards at various purchase levels.”

Annual report 2025A · The company itself

“Our stores carry an extensive product line, including: ● New and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil, and wiper blades. ● Accessories, such as floor mats, seat covers, and truck accessories.”

Annual report 2025A · The company itself

“Products and Purchasing ​ Our stores offer DIY and professional service provider customers a wide selection of products for domestic and imported automobiles, vans, and trucks. Our merchandise generally consists of nationally recognized, well-advertised, premium name brand products, such as AC Delco, Armor All, Bosch, Castrol, Denso, Dorman, Fel-Pro, Gates Rubber, Lucas Oil, Mobil1, Monroe, NGK, Pennzoil, Prestone, Standard, STP, Turtle Wax, Valvoline, and Wix, and a wide selection of quality proprietary private label products, which span the entire good, better, and best value spectrum, under our BesTest®, BrakeBest®, Cartek®, Import Direct®, MasterPro®, MicroGard®, Murray®, Omnispark®, O’Reilly Auto Parts®, Precision®, Power-Torque®, Super-Start®, Syntec®, and Ultima® brands.”

Annual report 2025A · The company itself

“O’Reilly is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories across North America, selling our products to both do-it-yourself (“DIY”) and professional service provider customers, our “dual market strategy.””

Annual report 2025A · The company itself

“In 2025, we derived approximately 50% of our sales from our DIY customers and approximately 50% of our sales from our professional service provider customers.”

Annual report 2025A · The company itself

“Our stores carry an extensive product line, including: ● New and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil, and wiper blades. ● Accessories, such as floor mats, seat covers, and truck accessories.”

Annual report 2025A · The company itself

“Products and Purchasing ​ Our stores offer DIY and professional service provider customers a wide selection of products for domestic and imported automobiles, vans, and trucks. Our merchandise generally consists of nationally recognized, well-advertised, premium name brand products, such as AC Delco, Armor All, Bosch, Castrol, Denso, Dorman, Fel-Pro, Gates Rubber, Lucas Oil, Mobil1, Monroe, NGK, Pennzoil, Prestone, Standard, STP, Turtle Wax, Valvoline, and Wix, and a wide selection of quality proprietary private label products, which span the entire good, better, and best value spectrum, under our BesTest®, BrakeBest®, Cartek®, Import Direct®, MasterPro®, MicroGard®, Murray®, Omnispark®, O’Reilly Auto Parts®, Precision®, Power-Torque®, Super-Start®, Syntec®, and Ultima® brands.”

Annual report 2025A · The company itself

“Our stores carry an extensive product line, including: ● New and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil, and wiper blades. ● Accessories, such as floor mats, seat covers, and truck accessories.”

Annual report 2025A · The company itself

“Continually Enhance Store Design and Location: Our current prototype store design features optimized square footage, high ceilings, convenient interior store layouts, in-store signage, multilingual signage, bright lighting, convenient ingress and egress, ample parking, and dedicated counters to serve professional service provider customers, each designed to increase sales and operating efficiencies to enhance overall customer service. We continually update the location and condition of our store network through systematic renovation and relocation of our existing stores to enhance store performance. During 2025, we relocated 35 stores and performed minor to major updates or renovations to approximately 700 additional stores.”

Annual report 2025A · The company itself

“We believe our commitment to a robust, regional, tiered distribution network provides superior replenishment and access to hard-to-find parts and enables us to optimize product availability and inventory levels throughout our store network. Our strategic, regional, tiered distribution network includes distribution centers (“DCs”) and Hub stores. Our inventory management and distribution systems electronically link each of our stores to one or more DCs, which provides for efficient inventory control and management.”

Annual report 2025A · The company itself

“Inflation and Seasonality ​ We have generally been successful in reducing the effects of merchandise cost increases principally by taking advantage of supplier incentive programs, economies of scale resulting from increased volume of purchases, and selective forward buying. To the extent our acquisition costs increased due to price increases industry wide, we have typically been able to pass along these increased costs through higher retail prices for the affected products.”

Annual report 2025A · The company itself

“The economic health of our customers is affected by many factors, including, among others, general business conditions, interest rates, inflation, tariffs, consumer debt levels, the availability of consumer credit, currency exchange rates, taxation, fuel prices, unemployment levels, a prolonged public health crisis or pandemic, and other matters that influence consumer confidence and spending.”

Annual report 2025A · The company itself

“We could also be negatively impacted when our suppliers or our supply chain experiences work stoppages and labor strikes; a prolonged public health crisis or pandemic; import, shipping, and transportation disruptions or increased costs, such as from inflation, tariffs, or currency fluctuations; or other interruptions to, or difficulties in, the manufacture or supply of the products we purchase.”

Annual report 2025A · The company itself

“Our business is influenced by a number of general macroeconomic factors that impact both our industry and consumers, including, but not limited to, inflation, including rising consumer staples; fuel and energy costs; unemployment trends; interest rates; and other economic factors.”

Annual report 2025A · The company itself

“To the extent our acquisition costs increase due to base commodity price increases or other input cost increases affecting the entire industry, we have typically been able to pass along these cost increases through higher selling prices for the affected products. As a result, we do not believe inflation has had a material adverse effect on our operating results.”

Annual report 2025A · The company itself

“New store sites are strategically located in clusters within geographic areas that complement our distribution network in order to achieve economies of scale in management, advertising, and distribution. Other key factors we consider in the site selection process include population density and growth patterns, demographic lifestyle segmentation, age and per capita income, vehicle traffic counts, vehicles in operation, number and type of existing automotive repair facilities, and competing auto parts stores within a predetermined radius.”

Annual report 2025A · The company itself

“Store Network ​ New Store Site Selection: In selecting sites for new stores, we seek to strategically locate store sites in clusters within geographic areas in order to achieve economies of scale in management, advertising, and distribution. Other key factors we consider in the site selection process are: ● Population density. ● Demographics, including age, life style, and per capita income. ● Market economic strength, retail draw, and growth patterns. ● Number, age, and percent of makes and models of registered vehicles. ● The number, type, and sales potential of existing automotive repair facilities. ● The number of auto parts stores and other competitors within a predetermined radius. ● Physical location, traffic count, size, economics, and presentation of the site.”

Annual report 2025A · The company itself

“Number of Miles Driven: The number of total miles driven influences the demand for repair and maintenance products sold within the automotive aftermarket. In the U.S., vehicles are driven approximately three trillion miles per year, resulting in ongoing wear and tear and a corresponding continued demand for the repair and maintenance products necessary to keep these vehicles in operation.”

Annual report 2025A · The company itself

“Size and Age of the Vehicle Fleet: The total number of vehicles on the road and the average age of the vehicle population heavily influence the demand for products sold within the automotive aftermarket industry. As reported by the Auto Care Association, the total number of U.S. registered vehicles increased 13.4% from 2014 to 2024, bringing the number of light vehicles on the road to 286 million by the end of 2024.”

Annual report 2025A · The company itself

“The economic health of our customers is affected by many factors, including, among others, general business conditions, interest rates, inflation, tariffs, consumer debt levels, the availability of consumer credit, currency exchange rates, taxation, fuel prices, unemployment levels, a prolonged public health crisis or pandemic, and other matters that influence consumer confidence and spending.”

Annual report 2025A · The company itself

“We could also be negatively impacted when our suppliers or our supply chain experiences work stoppages and labor strikes; a prolonged public health crisis or pandemic; import, shipping, and transportation disruptions or increased costs, such as from inflation, tariffs, or currency fluctuations; or other interruptions to, or difficulties in, the manufacture or supply of the products we purchase.”

Annual report 2025A · The company itself

“In addition, changes in country specific trade policies, sanctions, practices, tariffs or taxes, import limitations, and other factors relating to foreign trade and port agreements could affect our ability to source products and our suppliers’ ability to source materials or provide products at current volumes and/or prices.”

Annual report 2025A · The company itself

“Average ticket values benefited from increases in average selling prices on a same-SKU basis, as compared to the same period in 2024, driven by increases in acquisition costs of inventory, principally resulting from increased tariffs, which were passed on in selling prices.”

Annual report 2025A · The company itself

“The economic health of our customers is affected by many factors, including, among others, general business conditions, interest rates, inflation, tariffs, consumer debt levels, the availability of consumer credit, currency exchange rates, taxation, fuel prices, unemployment levels, a prolonged public health crisis or pandemic, and other matters that influence consumer confidence and spending.”

Annual report 2025A · The company itself

“Our business is influenced by a number of general macroeconomic factors that impact both our industry and consumers, including, but not limited to, inflation, including rising consumer staples; fuel and energy costs; unemployment trends; interest rates; and other economic factors.”

Annual report 2025A · The company itself

“A breach of customer, supplier, Team Member, or Company information could damage our reputation or result in substantial additional costs or litigation. Our business involves the receiving, storage, and transmitting of certain personally identifiable or confidential information about our customers, suppliers, Team Members, and the Company, some of which is entrusted to third-party service providers and suppliers.”

Annual report 2025A · The company itself

“Changes in vehicle technology used by the original equipment manufacturers (“OEM”) on future vehicles, including but not limited to electric, hybrid, and internal combustion engines, may result in less frequent repairs, parts lasting longer, or elimination of certain repairs. In addition, restrictions on access to telematics, diagnostic tools, and repair information imposed by the OEMs or by governmental regulations may force vehicle owners to rely on dealers to perform maintenance and repairs.”

Annual report 2025A · The company itself

“Changes in vehicle technology used by the original equipment manufacturers (“OEM”) on future vehicles, including but not limited to electric, hybrid, and internal combustion engines, may result in less frequent repairs, parts lasting longer, or elimination of certain repairs. In addition, restrictions on access to telematics, diagnostic tools, and repair information imposed by the OEMs or by governmental regulations may force vehicle owners to rely on dealers to perform maintenance and repairs.”

Annual report 2025A · The company itself

“As of January 31, 2026, we employed 92,923 Team Members (78,258 full-time Team Members and 14,665 part-time Team Members), of whom 76,467 were employed at our stores, 11,649 were employed at our DCs, and 4,807 were employed at our corporate and regional offices. Ours is an increasingly technical business creating the need for knowledgeable Professional Parts People, and our ongoing focus on developing a technically proficient Team has resulted in the growth of the mix of our full-time work force, increasing from 65% at January 31, 2020, to 84% at January 31, 2026.”

Annual report 2025A · The company itself

“To some extent our business is seasonal, primarily as a result of the impact of weather conditions on customer buying patterns. While we have historically realized operating profits in each quarter of the year, our store sales, profits, and inventory levels have historically been higher in the second and third quarters (April through September) than in the first and fourth quarters (October through March) of the year.”

Annual report 2025A · The company itself

“Our business is sensitive to impacts from global, national, and regional economic and weather conditions and natural disasters. Unusually inclement weather and natural disasters, such as significant rain, snow, sleet, freezing rain, flooding, wildfire, seismic activity, and hurricanes, have historically discouraged our customers from visiting our stores during the affected period and reduced our sales, particularly to DIY customers.”

Annual report 2025A · The company itself

“Extreme weather conditions, such as extreme heat and extreme cold temperatures, may enhance demand for our products due to increased failure rates of our customers’ automotive parts, while temperate weather conditions may have a lesser impact on failure rates of automotive parts.”

Annual report 2025A · The company itself

“Business interruptions in our distribution centers or other facilities may affect our store hours, stability of systems we rely on, and/or availability and distribution of merchandise, which may affect our business. Business interruptions, including from a prolonged public health crisis or pandemic, weather-related events, terrorist activities, war, political or civil unrest, disruption of critical infrastructure systems, or other disasters, or the threat of them, may result in a disruption of operations or the closure of one or more of our DCs or other facilities, or may adversely affect our ability to deliver inventory to our stores on a nightly basis.”

Annual report 2025A · The company itself

“In addition, our information technology systems, infrastructure, and personnel require substantial investments, such as replacing systems, maintaining or enhancing systems, or designing or acquiring new systems or functionality, including artificial intelligence.”

Annual report 2025A · The company itself

“Given that our Consolidated Financial Statements are denominated in U.S. dollars, amounts of assets, liabilities, net sales, and other revenues and expenses denominated in local currencies must be translated into U.S. dollars using exchange rates for the current period. As a result, foreign currency exchange rates and fluctuations in those rates may adversely impact our financial performance.”

Annual report 2025A · The company itself

“In addition, we rely extensively on various systems, some of which are provided by third-party service providers, to manage inventory, process transactions, and timely provide products to our stores and customers. These systems are subject to failure, damage, or interruption, including power outages, telecommunications failures, computer viruses, cyber-attacks, security breaches, or other catastrophic events. If these systems are damaged or fail to function properly, we may experience loss of critical data and interruptions or delays in our ability to manage inventories, deliver product, or process customer transactions.”

Annual report 2025A · The company itself

“Business interruptions in our distribution centers or other facilities may affect our store hours, stability of systems we rely on, and/or availability and distribution of merchandise, which may affect our business. Business interruptions, including from a prolonged public health crisis or pandemic, weather-related events, terrorist activities, war, political or civil unrest, disruption of critical infrastructure systems, or other disasters, or the threat of them, may result in a disruption of operations or the closure of one or more of our DCs or other facilities, or may adversely affect our ability to deliver inventory to our stores on a nightly basis.”

Annual report 2025A · The company itself

“In addition, our information technology systems, infrastructure, and personnel require substantial investments, such as replacing systems, maintaining or enhancing systems, or designing or acquiring new systems or functionality, including artificial intelligence.”

Annual report 2025A · The company itself

“At December 31, 2025, we operated 6,447 stores in 48 states in the United States (“U.S.”) and Puerto Rico, 112 stores in Mexico, and 26 stores in Canada.”

Annual report 2025A · The company itself

“During 2025, we opened a new DC in Stafford, Virginia. Further enhancing our distribution capabilities, we plan to expand our Lakeland, Florida, DC in 2026 and open a new DC in the Fort Worth, Texas area, in 2028, adding additional store servicing capabilities to our distribution network.”

Annual report 2025A · The company itself

“As of December 31, 2025, we operated 6,447 stores in 48 U.S. states and Puerto Rico, 112 stores in Mexico, and 26 stores in Canada.”

Annual report 2025A · The company itself

“At December 31, 2025, we operated 6,447 stores in 48 states in the United States (“U.S.”) and Puerto Rico, 112 stores in Mexico, and 26 stores in Canada.”

Annual report 2025A · The company itself

“As of December 31, 2025, we operated 6,447 stores in 48 U.S. states and Puerto Rico, 112 stores in Mexico, and 26 stores in Canada.”

Annual report 2025A · The company itself