O'Reilly Auto Parts 2015 Annual Report Download - page 35

FORM 10-K
27
Earnings per share:
Our diluted earnings per common share for the year ended December 31, 2015, increased 25% to $9.17 on 102 million shares from $7.34
on 106 million shares for the same period one year ago.
2014 Compared to 2013
Sales:
Sales for the year ended December 31, 2014, increased $567 million to $7.22 billion from $6.65 billion for the same period one year
prior, representing an increase of 9%. Comparable store sales for stores open at least one year increased 6.0% and 4.3% for the years
ended December 31, 2014 and 2013, respectively. Comparable store sales are calculated based on the change in sales of stores open at
least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members.
The following table presents the components of the increase in sales for the year ended December 31, 2014 (in millions):
Increase in Sales for the Year Ended
December 31, 2014,
Compared to the Same Period in 2013
Store sales:
Comparable store sales $ 389
Non-comparable store sales:
Sales for stores opened throughout 2013, excluding stores open at least one year that are
included in comparable store sales 90
Sales for stores opened throughout 2014 85
Sales in 2013 for stores that have closed (4)
Non-store sales:
Includes sales of machinery and sales to independent parts stores and Team Members 7
Total increase in sales $ 567
We believe the increased sales achieved by our stores are the result of store growth and the high levels of customer service provided by
our well-trained and technically proficient Team Members, superior inventory availability, including same day and over-night access to
inventory in our regional distribution centers, enhanced services and programs offered in our stores, a broader selection of product
offerings in most stores with a dynamic catalog system to identify and source parts, a targeted promotional and advertising effort through
a variety of media and localized promotional events, continued improvement in the merchandising and store layouts of our stores,
compensation programs for all store Team Members that provide incentives for performance and our continued focus on serving both
DIY and professional service provider customers.
Our comparable store sales increase for the year ended December 31, 2014, was driven by increases in average ticket values and customer
transaction counts for both DIY and professional service provider customers. The improvements in average ticket values were the result
of the continued growth of the more costly, hard part categories as a percentage of our total sales. The overall growth in our hard part
categories continues to be driven by our faster growing professional service provider sales, which are primarily comprised of hard part
categories and by the increasing complexity and cost of replacement parts necessary to maintain the current population of better engineered
and more technically advanced vehicles. These vehicles require less frequent repairs and the component parts are more durable and last
for longer periods of time; however, when repairs are required, the cost of the replacement parts is, on average, greater. While the less
frequent repairs required by these better engineered and manufactured vehicles does create pressure on transaction counts, both DIY and
professional service provider customer transaction counts were positive for the year ended December 31, 2014. The increases in
professional service provider customer transaction counts were primarily driven by our acquired markets and the continued growth of
less mature stores. The increases in DIY transaction counts were driven by our ongoing focus on staffing our stores with knowledgeable
parts professionals to assist our DIY customers during high DIY traffic periods, including nights and weekends.
We opened 200 net, new stores during the year ended December 31, 2014, compared to 190 net, new stores for the year ended December 31,
2013. As of December 31, 2014, we operated 4,366 stores in 43 states compared to 4,166 stores in 42 states at December 31, 2013.
Gross profit:
Gross profit for the year ended December 31, 2014, increased to $3.71 billion (or 51.4% of sales) from $3.37 billion (or 50.7% of sales)
for the same period one year prior, representing an increase of 10%. The increase in gross profit dollars for the year ended December
31, 2014, was primarily a result of the increase in comparable store sales at existing stores and sales from new stores. The increase in
gross profit as a percentage of sales for the year ended December 31, 2014, was primarily due to product acquisition cost improvements,
partially offset by the LIFO negative impact resulting from continued product acquisition cost reductions. Acquisition cost improvements