Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you help us understand your sourcing exposure to China, Mexico, and Canada, and what are you hearing from vendors on price increase expectations and potential tariff impacts? A: Brent Kirby, President: We source about 25% from China, high teens from Mexico, and low single digits from Canada. We are not the importer of record in many cases, so we work with suppliers to negotiate impacts. Our team has diversified our supply chain and reduced dependency on hotspots, which positions us well to handle potential tariffs.
Q: Why did you guide your comp to 2% to 4% this year instead of the usual 3% to 5%? Does this signal slower growth expectations? A: Brad Beckham, CEO: We are cautious due to a choppy business environment and a cautious consumer. Despite a strong Q4, we see pressure in discretionary categories. However, we remain confident in our ability to gain market share in a $168 billion industry.
Q: How should we expect upside to comp guidance to impact the P&L if O'Reilly outperforms? A: Jeremy Fletcher, CFO: We will evaluate any changes as they occur. Factors like pricing benefits from tariffs and consumer responses will influence outcomes. Our focus remains on providing high-level customer service and making prudent investments.
Q: What did you see from mix and complexity in Q4, and how is that trending into 2025? A: Jeremy Fletcher, CFO: We saw a same-SKU inflation benefit of just under 1% in Q4. The mix was impacted by temporary pressures like product mix and distribution costs. We expect a modest complexity benefit in 2025.
Q: Did you see any disruption in the West due to store closures by a competitor? A: Brad Beckham, CEO: It's too early to gauge the impact. Our sales and operations team is focused on capturing opportunities. However, the market is competitive, and we are cautious about the quality of sales available.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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