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2O’REILLY AUTOMOTIVE
2004 HORSEPOWER
Letter to Shareholders
While we faced many challenges during 2004, we are very pleased at how Team O’Reilly pulled together
once again for a successful year. After a very strong first quarter, sales began to soften in the second
quarter as a result of unseasonably cool and wet weather. The third quarter remained challenging with
below normal temperatures and four hurricanes that tore across the southeast. We were very fortunate
that none of our team members suffered severe injuries. We came back strong in the fourth quarter and
are very pleased with how we finished the year.
Product sales increased 13.9% for the year to $1.72 billion, another milestone on the road to our
2-4-Your Future goal of $2 billion in sales. Net income was up 17.6% over 2003, to $117.7 million
and we achieved an operating margin of 11.1%. Comparable store sales increased 6.8%, a tremendous
feat considering the 7.8% increase of 2003, along with the difficult weather and high fuel prices we
have faced in 2004.
We opened 140 new stores in 2004, making us the fourth largest automotive aftermarket retailer in
the United States. As part of this expansion, we moved into South Carolina, giving us a presence in
19 contiguous states. For 2005, we are targeting 160 new stores, with a majority in the southeast, to
capitalize on the distribution center we will be opening in Atlanta, Georgia in the spring. This
represents a continuation of our expansion philosophy to grow into new, contiguous markets while
filling in existing markets, as well.
We have a number of very exciting projects underway that will ensure our continued leadership in utiliz-
ing technology to achieve extremely high levels of customer service and team member productivity.
We’re very excited about our diverse advertising and marketing program, with great exposure to our tar-
geted demographics through motor sports, college and professional athletics and a variety of cable televi-
sion programming and print media.
David O’Reilly
Chairman of the Board