CFO Takeaways; Latest on Inflation, Demand & SG&A...

Research evidence excerpt

CFO Takeaways; Latest on Inflation, Demand & SG&A...

May 13, 2026

(=/+) Mgmt Signals Confidence in SG&A Guide... We Still Model Deleverage in 2Q-4Q. The team reiterated their

expectations for +3-4% per store SG&A growth for the 2026, but there will still be de-leverage as we move through

2Q-4Q (which we are already modeling). The positive news on SG&A was mgmt starting to see a flattening of general

liability, and insurance claims as they begin to lap the 2H increase. These legal claims remain difficult for ORLY and the

broader industry to forecast. Click here for our latest ORLY Model.

(+) ORLY Remains Cautiously Confident on the Consumer Despite Negative Headlines. The consumer is facing many

well telegraphed headwinds, and recent results have fanned the flames about the underlying momentum (PLNT, SHAK,

WHR), but ORLY highlighted they aren't seeing anything out of the ordinary. In 1Q, they did see some absorption of

deferred maintenance from the 2H25, but that didn't make up a majority of the outperformance in the quarter.

(=) ORLY Continues To Refrain From Predicting Future Same-SKU Inflation. After a big run-up in expectations during

3Q/4Q last year, ORLY is refraining from really forecasting an incremental step-up in inflation from the War. That being

said, the channel is expecting a step up in 3Q / 4Q though, with expectations for 100-200bps step up.

(+/-) ORLY Not the Merchant Of Record On Most Products But Working to Get Refunds / Price Reductions. ORLY is

working closely with their suppliers to get price reductions related to the recent tariff refunds. We have seen multiple

companies reporting tariff refunds like Energizer and Traeger with more on the horizon as the CBP announced that more

than $35bn of refunds have been requested from 125k+ companies.