O'Reilly Automotive, Inc.

Welcome to the O'Reilly Automotive Inc fourth quarter and full year 2022 earnings call. My name is Paul and I will be your operator for today's call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session. During the question and answer session if you have a question please press star 1 on your touch tone phone. I will now turn the call over to Jeremy Fletcher. Mr Fletcher you may begin.

Thank you, Paul. Good morning everyone and thank you for joining us. During today's conference call, we will discuss our fourth quarter and full year 2022 results and our outlook for 2023. After our prepared comments, we will host a question and answer period. Before we begin this morning, I would like to remind everyone that our comments today contain forward-looking statements and we intend to be covered by, and we claim the protection under, the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as estimate, may, could, will, believe, expect, would, consider, should, anticipate, project, plan, intend, or similar words. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest annual report on Form 10-K for the year ended December 31, 2021, and other recent SEC filings. The company assumes no obligation to update any forward-looking statements made during this call. At this time, I would like to introduce Greg Johnson.

Thanks, Jeremy. Good morning everyone and welcome to the O'Reilly Auto Parts fourth quarter conference call. Before we begin our discussion on our fourth quarter results and our plans for 2023, I'd like to take a few moments to discuss the announcement we made in January regarding the promotion of Brad Beckham and Brent Kirby to co-presidents. Our company is extremely focused on identifying and developing leaders who in turn are relentless in building the very best team in our industry. Our long-term commitment to succession planning is a critical component of our human capital strategy. In line with that strategy, we're extremely pleased to have Brent and Brad assume the elevated positions of co-presidents. Brad and Brent are exceptional leaders and are both driven by their passion for perpetuating our Raleigh culture and providing excellent service to our customers. Brad and Brent bring diverse and broad experience to their roles of co-presidents. Brad's career with O'Reilly began 26 years ago when he joined the company as a parts specialist in Wagner, Oklahoma. He has progressed through every leadership role in our store operations group, from store manager through executive vice president of store operations and sales, before assuming the role of EVP and chief operating officer and now co-president. Brad's leadership has been instrumental in the growth and expansion of our company and and his impact is evident throughout the leadership ranks of our operational teams, many of whom have been mentored and promoted directly by Brad. As co-president, Brad is responsible for the company's domestic and international store operations and sales, real estate and expansion, human resources, training, legal, risk management, loss prevention, and finance. Like Brad, Brent brings decades of retail leadership experience to his role as co-president. Brent began his 35-year retail career with Lowe's Companies and progressed through their ranks, ultimately serving in the roles of Senior Vice President of Store Operations, Chief Omnichannel Officer, and Chief Supply Chain Officer. Brent joined Team O'Reilly in 2018 as our Senior Vice President of Omnichannel and made an immediate impact in that role before assuming leadership of our supply chain and distribution efforts. His extensive experience and significant DIY and professional retail industry knowledge is critical to our efforts to enhance our industry-leading inventory position, leverage technology investments to deliver powerful tools for our team, and drive deep connections with our DIY and professional customers. As co-president, Brent is responsible for the company's distribution operations, logistics, merchandising, inventory management, pricing, advertising, omnichannel, customer satisfaction, program management, electronic catalog, and information technology. Again, I am very pleased to have Brad and Brent step into these new roles, and I'm excited about the leadership they will provide to Team O'Reilly as co-presidents. Brad and Brent are participating on the call with me this morning, along with Jeremy Fletcher, our Chief Financial Officer. Greg Hensley, our Executive Chairman, and David O'Reilly, our Executive Vice Chairman, are also present on the call. I'm once again pleased to begin our call today by congratulating Team O'Reilly on another record-breaking year in 2022. We finished the year with incredible momentum, posting a comparable store sales increase of 9% in the fourth quarter, representing an increase of almost 35% on a three-year stack basis. For the four-year of 2022, our team generated a robust 6.4% comparable store sales growth, which came in above the revised guidance range of 4.5% to 5.5%, we provided last quarter, and above the midpoint of our original comp, range of 5% to 7%, we said at the beginning of 2022. Even more impressive, our 6.4 comparable store sales growth in 2022 followed record-setting sales growth in 2021 and 2020 when we delivered comps of 13.3% and 10.9% respectively, resulting in three-year stacked comps exceeding 30%. These strong top line results drove another year of record earnings per share as diluted EPS increased 8% to $33.44, representing a three-year compounded annual growth rate of 23%. Our ability to continue to grow our business and capture market share year in and year out is a testament to our team's commitment to providing excellent customer service, and we couldn't be more pleased with how our team finished 2022. Entering 2023, we remain bullish on the opportunities we see ahead of us and are anticipating another strong year of sales and earnings growth. For earnings per share, we have established a guidance for 2023 at $35.75 to $36.25, representing an increase of 8% versus 2022 at the midpoint. Achievement of our 2023 guidance would result in us doubling our EPS over the last four years, representing a compounded annual growth rate over 19%. This impressive performance and challenging target is a testament to the quality of our team and their commitment to our customers. Brad, Brent, and Jeremy will walk through the rest of our detailed outlook and their prepared comments, but for now, I will just say that we're excited about the aggressive plans we have to invest in our business and continue to take market share and drive industry-leading results. Before I turn the call over to Brad, I want to share a little bit about the incredible culture building experience our team just had in January at our annual leadership conference in Dallas. Each year, we bring all of our store managers, field leadership, as well as our sales and DC management team members together in one place at one time to build leadership skills, enhance product knowledge, share best practices across our company, and celebrate our award-winning performance. The theme of this year's conference was One Team Reunited, And it was definitely an appropriate rallying cry for our first in-person leadership conference in three years. The passion and energy displayed by our company leaders was infectious, and it gives us even more confidence in the team O'Reilly's ability to drive future success through their unwavering commitment to our customers and fellow team members. To wrap up my prepared comments, I want to thank each of our team members for their dedication to our company's long-term success and their outstanding performance in 2022. I'm extremely proud of all of you and I'm confident 2023 will be another record-setting year for Team O'Reilly. I'll now turn the call over to Brad.