O'Reilly Automotive plunges after sales miss and warning of 'weak consumer demand'

Screen Shot 2017 07 05 at 9.40.44 AMMarkets Insider‘We faced a more challenging sales environment than we expected for the remainder of the quarter,’ after April, O’Reilly said.

O’Reilly Automotive plunged by as much as 16% in early trading on Wednesday after the company announced second-quarter sales results that were weaker than it had expected.

Sales at its auto-parts stores open for at least one year rose 1.7% in the second quarter, O’Reilly said in a release on Wednesday. That was improved from Q1 but weaker than its guidance of 3%-5% growth.

“We faced a more challenging sales environment than we expected for the remainder of the quarter,” after April, O’Reilly CEO Greg Henslee said, “due to what we believe were continued headwinds from a second consecutive mild winter and overall weak consumer demand.”

“The comparable store sales shortfall will also have a consequent impact on our operating profitability,” Henslee added.

Car sales in the US slowed in the first half of this year following seven straight years of record-setting volumes. Although sales have softened, continued employment growth suggests that consumer purchases of the big-ticket items may remain healthy.

Auto sales in June rose at a seasonally adjusted annual rate of 16.51 million, Autodata said on Monday, down 13.2% year-on-year.

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