O’Reilly Automotive continues to enjoy increased sales — and hopes to expand — amid a car-buying downturn.
The auto parts retailer announced in an earnings release Wednesday (Feb. 8) it had recorded a 9% growth in sales for the recent quarter, and 6.4% for the year.
“As we look forward to 2023, we believe the long-term drivers for demand in our industry remain solid,” CEO Greg Johnson said in the release.
The company, which has 5,190 stores in the U.S. and 28 in Mexico, plans to add 180 to 190 new locations this year, according to the release.
The results came one day after preventative vehicle maintenance provider Valvoline also reported increased sales and said it planned to increase the number of its company-owned and franchised locations from the 1,746 it has now to over 3,500.
Valvoline said this growth was due to both a greater number of vehicles being serviced and a wider array of services beyond oil changes.
As PYMNTS has written, auto parts and auto repair retailers have seen sales increase in recent months as consumers hold onto older cars longer. There are more vehicles on the road, fewer cars are being scrapped and their average age is rising.
This trend helped fuel record revenue for O’Reilly last year, thanks to an uptick in sales among its professional-sector customers.
And AutoZone reported in December that its sales were up among professional repair shops and do-it-yourselfers.
Meanwhile, prices for new cars are spiking, with some dealers saying already-hesitant customers have grown even more wary about making major purchases.
“My concern is that if supply doesn’t return, then new cars will be priced out of the reach of middle-class households,” JP Garvey, dealer principal at Garvey Automotive Group, a chain of dealerships in upstate New York, said earlier this week.
Last year saw American car sales fall to 13.7 million, their lowest level in more than a decade. A report earlier this year by J.D. Power/LMC Automotive forecast sales will stay below the pre-pandemic levels of 17 million for 2023.
The used car market is also facing hard times, with dealers who specialize in pre-owned vehicles seeing sales decline.
“After a huge run-up in 2021, last year was a reality check,” Chris Frey, senior manager of economic and industry insights for Cox Automotive, said in late January. “The used market now faces a challenging year as demand weakens.”
His company’s research found used car values falling 14% in 2022, with an additional 4% drop projected for this year.
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