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SEC filingO'Reilly Automotive, Inc. reported strong financial results for fiscal year 2025, with sales increasing 6% to $17.78 billion from $16.71 billion in 2024. Net income grew to $2.54 billion (14.3% of sales) from $2.39 billion (14.3% of sales) in the prior year. The company achieved a 4.7% increase in comparable store sales, driven by higher average ticket values for both professional service provider and DIY customers, partially offset by a decrease in DIY transaction counts. Operating income increased 6% to $3.46 billion, maintaining a 19.5% operating margin. The company generated $2.76 billion in net cash from operating activities and $1.56 billion in free cash flow. Key forward-looking initiatives include plans to open 225 to 235 net new stores in 2026 and continued execution of its dual market strategy, serving both DIY and professional customers.
O'Reilly Automotive delivered solid financial performance in fiscal year 2025, with sales reaching $17.78 billion, representing a 6% increase from $16.71 billion in 2024. Net income grew to $2.54 billion from $2.39 billion in the prior year, maintaining a consistent net margin of 14.3%. The company achieved a 4.7% increase in comparable store sales, driven by higher average ticket values for both professional service provider and DIY customers, though DIY transaction counts declined. Operating income increased 6% to $3.46 billion, with operating margin remaining stable at 19.5%. Diluted earnings per share increased 10% to $2.97 from $2.71 in 2024, benefiting from share repurchases that reduced weighted-average shares outstanding.
The company's revenue growth was primarily driven by the 4.7% increase in domestic comparable store sales and $354 million in sales from new stores opened in 2024 and 2025. Sales were divided approximately 50% from DIY customers and 50% from professional service provider customers. The comparable store sales increase was driven by an increase in average ticket value for both customer segments and an increase in transaction counts for professional service provider customers, partially offset by a decrease in transaction counts for DIY customers. Average ticket values benefited from increases in average selling prices on a same-SKU basis, driven by increased acquisition costs of inventory, principally resulting from increased tariffs, which were passed on in selling prices.
Gross profit increased 7% to $9.17 billion, with gross margin improving to 51.6% from 51.2% in 2024. The margin improvement was due to improved acquisition costs and distribution operating efficiencies, partially offset by a greater percentage of total sales mix being generated from professional service provider customers, which carry a lower gross margin percentage than DIY sales. Selling, general and administrative expenses increased 8% to $5.71 billion, representing 32.1% of sales compared to 31.7% in 2024. The increase in SG&A as a percentage of sales was principally due to broad inflationary pressure in costs, primarily relating to medical and casualty insurance programs, and enhancements to store-level compensation and benefits.
The company generated $2.76 billion in net cash from operating activities, a decrease from $3.05 billion in 2024. Free cash flow was $1.56 billion, down from $1.99 billion in the prior year. Capital expenditures totaled $1.17 billion, primarily for new store openings and distribution center investments. The company used $1.55 billion in net cash for financing activities, including $2.10 billion for share repurchases and $17.0 million for excise tax on share repurchases. Total debt increased to $6.02 billion from $5.52 billion, while total assets grew to $16.54 billion from $14.89 billion. The company maintained a shareholders' deficit of $763.4 million, improved from a deficit of $1.37 billion in 2024.
For 2026, the company plans to open 225 to 235 net new stores, continuing its strategy of consolidating the fragmented automotive aftermarket. Management remains confident in its ability to gain market share in existing markets and grow in new markets by focusing on its dual market strategy. The company faces risks including deteriorating economic conditions, competitive pressures in the automotive aftermarket business, sensitivity to regional economic and weather conditions, and increased debt levels. Management believes key long-term demand drivers include the number of miles driven, total number of registered vehicles, and average vehicle age, which has increased to 12.6 years in 2024 from 11.4 years in 2014.