O`Reilly Automotive, Inc.

Strong operating momentum in 2Q and solid 1H results (good): - Comparable store sales +6% in Q2 (beat expectations), driven by both Professional and DIY. - Professional comps +10% (4th straight quarter of double-digit comps) with growth from average ticket (in line) and ticket count (outpacing forecast); professional ticket count growth described as mid-single digits (stable vs recent quarters). - DIY comps low-single digit (average ticket strength main driver), partially offset by down low-single-digit DIY transaction counts, attributed partly to hot-weather-category headwinds and weather timing.

Guidance update: comps raised, EPS raised; back-half expectations unchanged (surprising/neutral): - FY 2026 comp guidance increased from 3–5% to 4–6% due to outperformance in 1H; back-half comp expectations unchanged. - FY diluted EPS guidance raised to $3.20–$3.30 (from prior range per context), driven by 1H sales/operating performance and incremental share repurchases. - Company projects seasonal/cadence strength early in Q3 (July step-up seen), but warns early benefits may be weather-volatility-driven.

Key drivers/assumptions for 2H: inflation benefit moderates (risk framing): - They expect same-SKU inflation benefit to moderate in 3Q/4Q as they cycle out tariff-driven price increases realized in 2025. - Inflation benefit projected at 1%–2% for back half 2026, with 3Q at the top end and 4Q toward the bottom end. - Management is cautious on how long price/inflation benefits persist and highlights potential consumer volatility if economic pressure continues (i.e., demand “choppiness” risk).