O'Reilly forecasts 2026 profit below estimates as cost pressures mount

Feb 4 (Reuters) - O'Reilly Automotive ORLY.O forecast annual profit below Wall Street estimates on Wednesday, as rising costs were set to curb its earnings growth.

Shares of the company were down 4% after the bell.

The company said fourth-quarter costs were higher than expected because of rising healthcare and insurance expenses, but added it is working to manage these pressures while maintaining the service levels and parts availability needed to stay competitive.

Higher labor and input costs had previously squeezed margins for the Springfield, Missouri-based auto parts retailer, which sources many of its products from China and Mexico — countries whose goods are subject to steep import duties.

The company now expects 2026 profit to be between $3.10 and $3.20 per share, below analysts' average estimate of $3.31 per share, according to data compiled by LSEG.

Selling, general and administrative expenses for the quarter increased 7% to $1.46 billion.

It also forecast annual sales between $18.7 billion and $19 billion. Analysts, on average, expect $18.97 billion.

O'Reilly reported profit of 71 cents per share for the fourth quarter, compared to 63 cents from a year earlier.

Quarterly revenue rose 7.8% to $4.4 billion.