(Bloomberg) -- Shares of O’Reilly Automotive Inc. recouped losses after the auto-parts retailer dismissed concerns that competition from e-commerce may be eroding demand.
While existing store sales will be flat or up as much as 2 percent in the fourth quarter, lower than the company had forecast for the previous three months, there hasn’t been a “negative shift” in O’Reilly’s business, Co-President Greg Johnson said Thursday.
“We finished the third quarter at a good pace, with September being the best month of the quarter, and that better pace has continued into October,” Johnson told analysts on an earnings call. O’Reilly shares jumped 4.3 percent as of 2:09 p.m. in New York trading, after declining as much as 6.3 percent earlier.
O’Reilly executives pushed back against speculation that Amazon.com Inc. has made inroads into their market, a concern that’s fueled a rout in shares of auto-parts store chains this year. The long-term threat of more competition and price transparency -- plus more here-and-now factors like adverse weather conditions and delayed tax returns -- have soured investors on the shares of O’Reilly and its rivals Advance Auto Parts Inc. and AutoZone Inc. this year.
Sales at O’Reilly’s existing stores rose 1.8 percent in the third quarter, falling short of the 2 percent average increase analysts had estimated. Chief Executive Officer Greg Henslee said in a statement that the company “continued to face a challenging demand environment and experienced severe weather in various parts of the country.”
One headwind in the fourth quarter will be how the days fall on the calendar. There will be one more Sunday during the period than a year ago, and that’s O’Reilly’s slowest day for sales. The Christmas holiday also is a Monday this year and was observed on a Sunday in 2016.
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