O'Reilly Automotive grew second-quarter comparable store sales 4.1% at the high end of expectations and lifted EPS 11% to $0.78, with the professional business again leading at over 7% comp and gross margin expanding 67 basis points to 51.4% on supply chain strength and a tariff-related pricing timing benefit. DIY ticket counts softened in June and discretionary categories stayed weak, while SG&A per store rose 4.5% above plan on insurance inflation. Management raised full-year comparable store sales guidance to 3%-4.5% but remained cautious that tariff-induced inflation could pressure consumers and create gross margin timing headwinds in the back half.
Thank you, Matthew. Good morning, everyone, and thank you for joining us. During today's conference call, we will discuss our 2nd quarter 2025 results and our outlook for the remainder of the year. After our prepared comments, we will host a question-and-answer period. Before we begin this morning, I would like to remind everyone that our comments today contain forward-looking statements, and we intend to be covered by, and we claim the protection under, the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as estimate, may, could, will, believe, expect, would, consider, should, anticipate, project, plan, intend, or similar words.
The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest annual report on Form 10-K for the year ended December 31, 2024, and other recent SEC filings. The company assumes no obligation to update any forward-looking statements made during this call. At this time, I would like to introduce Brad Beckham.
Thanks, Jeremy. Good morning, everyone, and welcome to the O'Reilly Auto Parts second quarter conference call. Participating on the call with me this morning are Brent Kirby, our President, and Jeremy Fletcher, our Chief Financial Officer. Greg Henslee, our Executive Chairman, and David O'Reilly, our Executive Vice Chairman, are also present on the call. It is once again my pleasure to begin our call today by congratulating Team O'Reilly on their performance in the 2nd quarter and the solid results they have delivered in the 1st half of 2025. Our team's proven ability to provide superior value and excellent customer service drove our 2nd quarter comparable store sales increase of 4.1%. These solid results contributed to a year-to-date comp growth at the high end of our expectations, and we are pleased with our team's ability to generate this level of sales momentum in the 1st half of 2025.
Our 2nd quarter sales growth drove an 11% increase in earnings per share to $0.78, and I'd like to thank our over 92,000 team members for their unwavering commitment to executing our business model at an extremely high level and providing the best customer service in our industry. The composition of our comparable store sales growth in the 2nd quarter was similar to the 1st quarter, with solid contributions from both sides of our business. Our professional business was once again the more significant driver of our sales results, with an increase in comparable store sales exceeding 7%, fueled by continued strong ticket count growth. Our teams continue to set the standard for how seamlessly and effectively they partner with and support our professional customers to grow their businesses.
Our continued robust share gains in our professional business are a testament to the close relationships we have fostered with our customers and our continued efforts to enhance our service levels to earn a greater share of their spend. DIY was also a contributor to our sales growth in the quarter with a low single-digit comp. From a traffic standpoint, we did see pressure to DIY ticket counts as we exited the quarter in June that resulted in a small decline in DIY ticket count for the full year, but we were pleased to see positive overall sales growth in DIY in the quarter driven by growth in average ticket size. Average ticket continues to be a contributor to our sales growth on both sides of the business, driven by increasing complexity in vehicle repairs. We also saw a modest benefit from effective pricing management in the 2nd quarter.
The contribution to our average ticket from same-skew inflation for the 2nd quarter was just under 1.5% and reflects the early stages of the impact of changes in the tariff environment in our industry, which I will discuss more in a moment. Turning to the cadence of our sales performance, results were reasonably steady throughout the 2nd quarter. As I noted previously, our comparable store sales for the quarter landed at the high end of our expectations, and we saw this outperformance primarily in the 1st two months of the quarter. As we remarked on last quarter's call, favorable spring weather supported strong volumes in our business as we exited the 1st quarter, and that momentum continued through April and May. Business normalized somewhat in June but was still in line with plan.
The moderation at the end of the 2nd quarter was driven at least in part by minor pressure in hot weather-related categories where we were up against a tough comparison to a strong performance in June last year. On balance, we think weather impacts evened out over the quarter and were ultimately neutral to our full 2nd quarter results but did contribute to some minor differences in the month-to-month cadence. Thus far in July, summer weather has been typical for the season, and we have been pleased with the continued solid trends in our business to start the 3rd quarter. From a category perspective, our 2nd quarter results reflected trends similar to what we've seen over the last few quarters.
We continue to generate strong performance in maintenance categories, including oil, filters, and spark plugs, and we're also pleased with solid performance in undercar, hard part categories, particularly on the professional side of our business. We are encouraged by the resiliency of performance in these categories and believe it reflects favorable vehicle dynamics in our industry, as well as continued willingness of consumers to prioritize the care of their existing vehicles. However, we also saw continued softness in discretionary categories in line with trends we have seen over the last year. As we have noted in the past, discretionary products make up a small subset of our total sales primarily on the DIY side of our business.
While not a substantial headwind to our overall results, the continued sluggishness in these categories is an indicator to us that consumers are still remaining cautious and conservative in how they are managing the spend in the current environment. Next, I would like to provide some color on our revised full-year comparable store sales guidance. As noted in yesterday's press release, we updated our guidance from the previous range of 2%-4% to a range of 3-4.5%. It isn't typical for us to revise our guidance to a range of 1.5% at this stage of the year, but we feel this update is appropriate for a few reasons. The midpoint of our revised comp range represents a 75 basis point increase over our previous midpoint and is in line with trends we have seen in our business in the 1st half of the year.
The increase in our guidance range at the top end also reflects the potential for incremental benefit we could realize from the effective price management. We talked about earlier as we navigate the challenging tariff environment. As I previously noted, we have begun to see some incremental same-skew benefit filter into our numbers from industry-wide pricing actions spurred by the 1st round of tariffs. Brent will discuss more of this in detail during his prepared comments, but we continue to be successful in working with our supplier partners to respond to and mitigate the impacts from tariffs. Likewise, we have begun to see industry adjustments in response to the incremental pressures to product acquisition costs and anticipate our industry will continue to behave rationally.
However, in establishing our outlook for the remainder of 2025, we remain cautious as to the uncertainty of the timing, magnitude, and ultimate impact of changes in the pricing environment in our industry. We are also cautious concerning the potential adverse impact to consumers and their resulting response in the face of rising prices. Our stance is driven in part by our current assessment of the health and confidence of consumers. We continue to view the consumer as relatively healthy, buoyed by strong employment and wage rate growth. We also believe the strong value proposition of maintaining and repairing an existing vehicle coupled with the high quality of vehicles creates a very compelling incentive for our customers to prioritize their auto parts spend.
However, as I noted earlier, we also think that consumers in our industry remain cautious in a very uncertain environment and are remaining conservative in the management of their overall household spend. Should consumers face rapid broad-based price increases in the back half of the year, we could encounter short-term reactions, particularly by lower-income DIY consumers who may look to ease pressure in the face of these shocks by cutting back on spending wherever possible. As a result of these factors, our forward-looking guidance expectations do not incorporate a significant net benefit from tariff-induced inflation beyond the modest price changes we have already seen thus far. While we are cognizant that these macroeconomic factors could cause volatility in our industry in the remainder of 2025, we are also confident that disruptions to consumer demand will be short-lived.
Over the course of many economic cycles, consumers in our industry have proven their resilience in responding to short-term shocks, whether caused by tariff-driven inflation, spikes in gas prices, or other factors. The core fundamental drivers of demand in our business remain very solid, underpinned by the increasing age and quality of the vehicle fleet and the growth of the North American car park and the corresponding steady annual increases in miles driven. We also view periods of acute challenges in our industry as opportunities to leverage our strategic advantages and enhance our competitive positioning. We currently hold just a fraction of the addressable market share in a fragmented industry. Our primary growth vehicle is centered on our ability to provide constantly improving value to our customers to earn a larger share of auto parts demand.
This relentless focus on excellent customer service is an imperative every day in each of our markets, regardless of the broader macro conditions. In challenging environments, our teams of professional parts people dig even deeper to distinguish the value we provide to our customers, knowing there is always more market share gains to be earned. Before I wrap up and turn the call over to Brent, I wanted to call out the update to our diluted earnings per share guidance. As noted in our press release yesterday, we have updated our EPS guidance to a range of $2.85-$2.95. We were pleased to complete our board and shareholder-approved 15-for-1 stock split in the 2nd quarter, so this quarter's press release is the 1st reporting period where we've provided EPS results and guidance, factoring in the increased share count.
Thanks, Brad. Before I dig in further to our results, I would like to echo Brad's comments on the dedication of Team O'Reilly. The sales momentum we have generated in the 1st half of 2025 is the direct result of the hard work of each of our team members in our stores, distribution centers, and offices, and I want to thank the entire team for their commitment to our customers.
I would like to begin my comments this morning by discussing our 2nd quarter gross margin results and our outlook for the remainder of 2025. For the quarter, our gross margin of 51.4% was up 67 basis points from the 2nd quarter of 2024. In establishing our full-year gross margin outlook, we assumed a slightly lower gross margin rate in the 2nd quarter as compared to the 1st, 3rd, and 4th quarters, which is typical for the seasonal composition of our product mix and consistent with our results in 2024. While our 2nd quarter gross margin performance fell in the middle of our full-year guidance outlook, it handily exceeded our expectations for the quarter. Our performance in the quarter was driven by continued strong management of our supply chain environment and solid distribution productivity, coupled with the timing benefit from the impact of tariff-related costs and pricing adjustments.
On the tariff front, as Brad discussed in his comments, we did begin to see some impact to our business in the 2nd quarter. As we've discussed at length in the past, the process by which we respond to any changes in the acquisition cost environment. Including increases spurred by tariff modifications, begins with close coordination with our supplier partners to mitigate the impact to our customers. As we have worked through the changing tariff landscape over the last several months, we believe that coordination has been very effective and has allowed us to negotiate appropriate cost increases that do not reflect the full impact of incremental tariff rates, while also temporarily delaying the timing of the application of those cost changes where possible.
In anticipation of the impact of tariff cost pressures, we closely monitored the pricing environment in our industry as we moved through the 2nd quarter and, where appropriate, made adjustments to selling prices. Our industry has historically been very rational in its response to changing input costs and pricing. We believe those same dynamics are prevailing in the current environment. Typically, in our industry, we see changes in acquisition cost and any corresponding price movements sync up fairly closely, but can sometimes experience temporary timing differences that create short-term headwinds or tailwinds within a quarter. In these instances, we can realize a short-term benefit from the timing of pricing changes that are slightly out ahead of when the corresponding cost increases filter into our income statement. Within the 2nd quarter, we did realize a benefit from this timing dynamic, which contributed to our positive gross margin results.
As we look to the back half of the year, we are not currently projecting significant further incremental benefit or pressure to gross margin rates from tariffs, but the environment remains fluid, both as it relates to the exact timing and magnitude of any tariff revisions that have yet to be implemented, as well as the timing of market responses in our industry. Given the existing tariff landscape and our ongoing work with our supply chain partners, we do anticipate further impacts to acquisition costs and are cautious that we could encounter short-term timing headwinds to gross margin rate in the back half of the year, depending on the speed with which our industry digests inflation pressures.
Ultimately, we believe these short-term timing differences will even out over the long run, and our industry will settle at an equilibrium that is in line with the rational pricing dynamics that have persisted over many cycles in many different environments in the automotive aftermarket. Independent of these tariff-related impacts, we are pleased with our gross margin performance in the quarter and the trends we continue to see in our business. We believe our consistent results, despite facing a mixed headwind from faster growth on the professional side of our business, reflect continued strong management by our supply chain teams working closely with our supplier partners. Given our experience thus far in 2024 and 2025, and factoring in that we could see tariff-induced choppiness in gross margin results in the back half of the year, we are leaving our full-year gross margin guidance unchanged at a range of 51.2%-51.7%.
As Brad discussed earlier, we remain cautious as to the potential adverse impact our customers could face from the heightened inflation in the remainder of 2025. We remain confident that we will still be able to profitably earn our customers' business by delivering a strong value proposition driven by our professional parts people and industry-leading parts availability, even in an environment of rising prices. Turning to SG&A, our 2nd quarter average SG&A per store growth of 4.5% was above our expectations and reflects a combination of the incremental spend to deliver excellent customer service in support of our above-planned sales performance and inflation pressure in our cost structure, particularly in areas more challenging to manage in the short term, such as expenses pertaining to our medical and casualty insurance programs.
Based on the inflation pressure we are currently seeing, coupled with our top-line outlook for the remainder of the year, we are revising our full-year guidance for average SG&A per store growth to a range of 3%-3.5%. While the pressures we are seeing have driven SG&A above our expectations, we continue to believe that the initiatives that we are executing and the enhancements to customer service we have been able to generate are integral factors in the market share gains that we are capturing on both sides of our business. As such, we will continue to diligently manage our SG&A spend to prioritize a high standard of excellent customer service and take advantage of the opportunities to fuel growth. Based on our SG&A expectations and projected gross margin range, we continue to expect our full-year operating profit to come within our guidance range of 19.2%-19.7%.
We successfully opened 105 net new stores across the U.S. and Mexico in the 1st half of 2025, and we continue to be pleased with the performance of our new stores. We continue to see solid growth in greenfield expansion markets, but we are also capitalizing on great growth opportunities across our footprint. As a result, our store growth thus far in 2025 was spread across 34 different U.S. states, Puerto Rico, and Mexico. Underpinning our very successful new store expansion efforts are the pivotal investments we continue to make to enhance our industry-leading distribution network. We remain steadfast in our commitment to equipping our store teams with rapid industry-leading access to inventory. To that end, we are excited to announce that we have acquired a facility in Haslett, Texas, a suburb of Fort Worth, that will become our 33rd distribution center.
This new facility, which we will refer to as our Fort Worth, D.C., is approximately 560,000 sq ft with an expected capacity to serve 350 stores in the South Central United States. These market areas represent some of our most mature markets, while also being strong contributors of highly profitable growth for many years. Even with the relatively high store counts we have in Texas and surrounding markets, we still see tremendous opportunity to continue growing in this part of the country in the future. We are running up against constraints with our distribution capacity. The backfill addition of this facility will not only give us additional capacity and enhanced service capabilities in the important Fort Worth metro market, but will also free up much-needed capacity in surrounding D.C. to support growth across the South Central region of the country.
We are still in the early innings of development for this new D.C., having just acquired the facility with substantial infill work still ahead of us. As a result, we anticipate this distribution center will be in operation in 2027. We are also excited to be nearing the completion of our Stafford, Virginia distribution center. We plan to start transferring stores to be serviced by Stafford at the end of the 3rd quarter, with the new facility servicing its initial store base by the end of this year. We could not be more excited about the store development opportunities that these two new facilities will unlock for the company in both the largely untapped Mid-Atlantic region and in strong existing markets in the South Central U.S. As I close my comments, I want to thank Team O'Reilly for their continued dedication to our company's success.
Your commitment to providing consistent, excellent customer service to all of our customers each and every day continues to be the key to our long-term success. Now, I will turn the call over to Jeremy.
Thanks, Brad. I would also like to begin today by thanking Team O'Reilly for another successful quarter. Now, we will take a closer look at our 2nd quarter results and update our guidance for the remainder of 2025. For the 2nd quarter, sales increased $253 million, driven by a 4.1% increase in comparable store sales and an $86 million non-comp contribution from stores opened in 2024 and 2025 that have not yet entered the comp base. For 2025, we now expect our total revenues to be between $17.5 billion-$17.8 billion.
Our 2nd quarter effective tax rate was 22.4% of pre-tax income, comprised of a base rate of 23.2%, reduced by a 0.8% benefit for share-based compensation. This compares to the 2nd quarter of 2024 rate of 23.2% of pre-tax income, which was comprised of a base tax rate of 23.8%, reduced by a 0.6% benefit for share-based compensation. For the full year of 2025, we now expect an effective tax rate of 22.3%. We expect the 4th quarter rate to be lower than the other three quarters due to the tolling of certain open tax periods. Also, variations in the tax benefit from share-based compensation can create fluctuations in our quarterly rate. Now, we will move on to free cash flow and the components that drove our results. Free cash flow for the 1st six months of 2025 was $904 million versus $1.2 billion in the 1st half of 2024.
The reduction in free cash flow was primarily the result of the timing of payment for renewable energy tax credits, with a higher cash outflow for these payments occurring in the 2nd quarter of 2025 versus the 3rd quarter of 2024. For the full year 2025, our expected free cash flow guidance remains unchanged at a range of $1.6-$1.9 billion. Inventory per store finished the quarter at $833,000, which was up 9% from this time last year and up 4% from the end of 2024. Broad-based inventory availability is critical to the success of our business, and we have been pleased with the investments we have made in inventory in 2025. Our projected increase in 2025 in average inventory per store remains unchanged at 5%. I also want to touch briefly on our AP to inventory ratio.
We finished the 2nd quarter at 127%, which was down from 128% at the end of 2024, but slightly above our expectations. For the remainder of 2025, we expect to see continued moderation resulting from our planned incremental inventory investment across our store and distribution network, and currently expect to finish the year at a ratio of approximately 125%. Moving on to debt, we finished the 2nd quarter with an adjusted debt to EBITDA ratio of 2.06 times as compared to our end of 2024 ratio of 1.99 times, with an increase in adjusted debt partially offset by EBITDA growth. We continue to be below our leverage target of 2.5 times and plan to prudently approach that number over time.
We continue to be pleased with the execution of our share repurchase program, and during the 2nd quarter, on a split-adjusted basis, we repurchased 6.8 million shares at an average share price of $90.71 for a total investment of $617 million. We remain very confident that the average repurchase price is supported by the expected discounted future cash flows of our business, and we continue to view our buyback program as an effective means of returning excess capital to our shareholders. As a reminder, our EPS guidance that Brad outlined earlier includes the impact of share repurchase through this call, but does not include any additional share repurchases. Before I open up our call to your questions, I would once again like to thank the entire O'Reilly team for their continued hard work and dedication to providing consistently high levels of service to our customers. This concludes our prepared comments.
At this time, I would like to ask Matthew, the operator, to return to the line, and we will be happy to answer your questions.