O'Reilly Auto Parts CEO warns consumers will see change in stores

Last week, automotive parts supplier AutoZone gave a worrying update.

The Memphis-based company reported an $80 million non-cash LIFO (last in, first out) charge in the previous quarter due to tariffs, and they expect that number to grow to $120 million in the current first fiscal quarter.

After that, it expects charges between $80 million and $85 million throughout the rest of the fiscal year.

U.S. auto parts tariffs at a glance

• 25% duty on imported auto parts, engines, and vehicles
• USMCA exemption for Mexico and Canada
• Japan and EU rate reduced to 15%
• UK rate reduced to 10%

But AutoZone also said it was in a good place due to consumer inelasticity.

“Customers can defer that maintenance for some period of time, but ultimately they realize that they’ve got to fix it or it creates more damage,” Chief Executive Philip B. Daniele said on the earnings call.

According to Daniele, the cost of going to his stores to buy parts to fix a car yourself is still far below dealership costs, so although prices are going up due to tariffs, AutoZone is well positioned.

This week, however, one of its national rivals gave an update that contradicts AutoZone's view of the U.S. consumer.

O'Reilly Automotive stock sinks after forecasting auto repair DIY pullback

Replacement auto parts retailer O'Reilly Automotive reported third-quarter results this week, sending shares dropping nearly 7%.

The company's exposure to bankrupt supplier First Brands Group was the big driver, but its outlook on the American consumer doesn't help matters.

Related: Top AutoZone exec makes a move shareholders should know about

“The pressure to our DIY business as we move through the quarter was primarily felt in some categories, where we could be seeing some deferral in larger-ticket jobs,” CEO Brad Beckham said during the company's analyst call.

While O'Reilly did raise its full-year profit and revenue outlook, it lowered its projections for cash from operating activities, noting that "also factored into our guidance is a continuation of the pressure to our DIY customers."

Beckham described the DIY situation as fluid, explaining that "there's a lot of movement" with the deferral of larger-ticket jobs.

O'Reilly Automotive plans to open up to 235 new stores

Despite the DIY headwinds, O'Reilly still plans to expand with hundreds of new store openings in 2026.

The Springfield, Missouri-based company shared a 2026 target of between 225 and 235 net new stores, including its first store in Canada.

O'Reilly also says it's on track to achieve its 2025 new store opening target of between 200 and 210 new stores by the end of the year.

Despite that, the company reduced its full-year capital expenditure guidance by $100 million to a range of $1.1 billion to $1.2 billion, primarily due to timing of store and distribution center projects.

O'Reilly updated its same-store sales guidance to between 4% and 5% and increased its EPS guidance to between $2.90 and $3 per share.

Related: Another sporting goods retailer closing forever after 103 years