O'Reilly Automotive, Inc.

Welcome to the O'Reilly Automotive, Inc. second quarter 2023 earnings call. My name is Matthew, and I'll be your operator for today's call. At this time, all participants run a listen-only mode. Later, we'll 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, Matthew. Good morning everyone and thank you for joining us. During today's conference call, we will discuss our second quarter 2023 results and our outlook for the remainder of the year. After our prepared comments, we will host the 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 31st, 2022, 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 second quarter conference call. Participating on the call with me this morning are our co-presidents, Brad Beckham and Brent Kirby, as well as 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'd like to begin our call today thanking Team O'Reilly for their continued dedication to consistently providing excellent service to our customers. Our team's proven ability to execute our business strategy at a high level during our second quarter comparable store sales increase of 9%, exceeding our expectations on both the professional and DIY sides of our business. For the first six months of 2023, we generated a 9.8% increase in comparable store sales, which is the direct result of our team's unrelenting focus on providing the best customer service in our industry. Our team members and our culture remain our greatest assets. I made the exact same statement on our first quarter call, but it warrants repeating. Our commitment to strengthening our culture and investing in our team is paying clear dividends in our continued strong performance, and I want to congratulate all of Team O'Reilly on another outstanding job in the second quarter. Driven by the strength of our top-line performance, we're also pleased to deliver a robust 16% increase in diluted earnings per share. Our operating cost spend was elevated above our expectations, which Brad will discuss in more detail during his prepared comments but we remain pleased with the investments we have made in our business to build on the momentum our teams are generating. Our EPS results reflect our ability to produce strong compounding operating profit dollar growth, and we are committed to aggressively capitalizing on the opportunities we see to provide enhanced value for our customers and earn even greater market share. As a result of our strong top line performance, we are increasing our full year 2023 EPS guidance to a range of $37.05 to $37.55, reflecting our second quarter results and shares repurchased since our last call. At the midpoint of this revised range, we now expect our full-year EPS to increase 12% over 2022. As we disclosed in our press releases last night, after 41 years of service to our company, I've made the decision to retire next January. At that time, Brad Beckham will take over my role as chief executive officer with direct responsibility to the board as the leader of our executive team. We will also be promoting Brent Kirby to the role of company president. As you know, Brad and Brent assumed the role as a co-president earlier in the year, and they have both taken on increasing levels of responsibility and prominence in the leadership of our business over the past several years. Succession planning has always been a very important and methodical process at our company. In many ways, our upcoming change mirrors the successful leadership transitions we have seen before in our company's history, including when Jeff Shaw and I were elevated to lead the company in 2018, and Greg Hensley and Ted Wise were selected as the first non-O'Reilly family members in the top leadership roles of CEO and COO in 2005. Brad and Brent are both extremely talented and experienced individuals. We have the full support of our team, and I have every confidence they will continue to deliver on our company's long-term track record of success. Over the period from now through January 31st, we will complete the transition of the day-to-day operations of the company to Brad and Brent. Finally, Greg Hensley, our Executive Chairman, and David O'Reilly, our Executive Vice Chairman, will also be continuing in their roles, and along with our full board, we'll support Brad, Brent, and our executive team in executing our strategy and driving long-term value for our shareholders. As I finish up my prepared comments, I would like to again thank our team for continuing to provide industry-leading customer service every day and generating excellent results in the first half of 2023. I'm extremely proud of all of you, and I'm excited to keep the momentum strong in the back half of the year. I'll now turn the call over to Brad Beckham. Brad?