O’Reilly Automotive Inc (ORLY)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		1.60	1.63	1.66	1.63	1.65	1.65	1.61	1.60	1.61	1.64	1.65	1.68	1.71	1.67	1.64	1.60	1.51	1.51	1.43	1.35
DOH	days	228.11	223.50	219.76	223.94	220.61	221.46	226.54	228.52	226.39	222.29	221.77	217.79	213.32	217.96	222.88	228.41	241.61	241.99	255.68	270.20

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.60
= 228.11

The Days of Inventory on Hand (DOH) for O'Reilly Automotive Inc has shown a gradual decreasing trend from 270.20 days as of March 31, 2020, to 228.11 days as of December 31, 2024. This indicates that the company has improved its efficiency in managing its inventory levels over the years.

The significant reduction in DOH reflects that O'Reilly Automotive has been able to turn over its inventory faster, which can lead to lower holding costs and better utilization of working capital. A lower DOH figure generally signifies that the company is selling products more quickly and efficiently.

However, there was a slight increase in DOH from March 31, 2024, to June 30, 2024, which might suggest a temporary slowdown in inventory turnover during that period. It would be important for the company to monitor this metric closely to ensure that inventory management remains efficient.

Overall, a decreasing trend in DOH is generally viewed positively as it indicates effective inventory management, but it's crucial to strike the right balance to avoid stockouts while minimizing excess inventory. O'Reilly Automotive should continue to focus on optimizing its inventory levels to support its operational efficiency and profitability.