Inventory Turnover › By Retailer › O'Reilly Automotive
O'Reilly Automotive Inventory Turnover: Why 1.6x Is the Strategy
O'Reilly Automotive, Inc. (ORLY) turned its inventory 1.6x in 2025, about 230 days on hand. In most of retail that would be a problem. For an auto parts chain that wins by having the right part today, it is the business model, and suppliers fund more than all of it. All figures are from the company's 10-K filings on SEC EDGAR.
Quick answer: O'Reilly's 2025 and 2024 10-K inventory turnover ratio
2025 (10-K)
1.6x for the year ended December 31, 2025. $8,607.9M cost of goods sold over $5,413.6M average inventory ($5,095.8M opening, $5,731.4M closing). About 230 days on hand.
2024 (10-K)
1.7x for the year ended December 31, 2024. $8,154.0M cost of goods sold over $4,877.1M average inventory. About 218 days on hand.
Turnover = cost of goods sold / average inventory (mean of opening and closing balance-sheet inventory). O'Reilly's cost of goods sold includes warehouse and distribution expenses. Figures from O'Reilly's 10-K filings on SEC EDGAR (CIK 0000898173), verified 10 November 2026; they match the turnover O'Reilly reports itself.
2022 - 2025 turnover history
| Fiscal Year | Cost of Sales | Inv (start) | Inv (end) | Turnover | Days on Hand |
|---|---|---|---|---|---|
| 2022 (calendar year) | $7,028.2M | $3,686.4M | $4,359.1M | 1.7x | 209 |
| 2023 (calendar year) | $7,707.4M | $4,359.1M | $4,658.4M | 1.7x | 214 |
| 2024 (calendar year) | $8,154.0M | $4,658.4M | $5,095.8M | 1.7x | 218 |
| 2025 (calendar year) | $8,607.9M | $5,095.8M | $5,731.4M | 1.6x | 230 |
Inventory (start) equals the prior year's inventory (end). O'Reilly's fiscal year is the calendar year. Its 10-K reports turnover of 1.7 for 2021 to 2024 and 1.6 for 2025 on a trailing four-quarter average of inventory, matching the figures here.
1.7x · Year-end inventory rose 18%, faster than the 11% growth in cost of goods sold. Accounts payable covered 134.9% of inventory.
1.7x · Cost of goods sold grew 10%, a little faster than inventory, holding turnover at 1.7x.
1.7x · Inventory grew 9% against 6% growth in cost of goods sold, nudging days on hand up to about 218.
1.6x · Year-end inventory rose 12% to $5.73B while cost of goods sold rose 6%, easing turnover to 1.6x. Payables still covered 123.9% of inventory.
Suppliers fund the inventory
A turnover of 1.6x means the average part sits for about seven and a half months before it sells. On its own that would tie up $5.4B of working capital. O'Reilly does not carry that cost, because it owes its suppliers more than its inventory is worth: accounts payable were 134.9% of inventory at the end of 2022, 130.8% in 2023, 128.0% in 2024 and 123.9% in 2025.
The mechanism is supplier financing. O'Reilly's suppliers take part in financing programs that financial institutions fund; programs of this kind typically pay suppliers early while the retailer pays on longer terms. Its 10-K warns that a credit-rating downgrade could make those programs less attractive and that lower participation would raise the working capital it needs. In other words, the slow turnover is affordable because O'Reilly's credit is strong.
The trend is worth watching. Payables coverage has slipped every year since 2022 while days on hand have risen from about 209 to 230. Inventory grew 12% in 2025 against 6% growth in cost of goods sold, so a little more of the stock is now O'Reilly's own money than three years ago.
What keeps O'Reilly near 1.6x
1. Parts for every vehicle on the road
Stores carry hard parts such as alternators, batteries, brake components, starters and water pumps, plus maintenance items and accessories, across a long tail of makes, models and years. Most individual SKUs sell rarely, but a missing part loses the sale and often the customer.
2. A tiered distribution network
O'Reilly operates 32 distribution centres giving stores same-day or overnight access to more than 156,000 SKUs, plus 399 Hub stores carrying an average of 63,000 SKUs (up to about 115,000 in some markets). More than 95% of its 6,585 stores receive multiple same-day deliveries. That network is inventory too.
3. Professional customers need it now
In 2025 about half of O'Reilly's sales came from professional service providers and half from do-it-yourself customers. A repair shop with a car on the lift will buy from whoever has the part in stock that day, so depth of stock is how O'Reilly wins that business.
4. LIFO keeps the balance low
O'Reilly values inventory on a last-in, first-out basis, with procurement, warehousing and distribution-centre costs capitalised into it. Replacement cost was $6.25B at the end of 2025 against $5.73B on the balance sheet. On a current-cost basis the ratio would be lower still.
Where 1.6x sits among retailers
Latest 10-K inventory turnover, times per year
Each figure is cost of sales over average inventory from the company's latest 10-K. Every retailer here has its own case study; the full ranked list is on the inventory turnover by retailer page.
Auto parts is the slowest-turning retail format on this site. O'Reilly at 1.6x is ahead of AutoZone (1.4x) and Advance Auto Parts (1.3x), the other two large US chains on the auto parts benchmarks.
Against general retail the gap is large: DICK'S turns 2.8x, Tractor Supply 3.3x and Home Depot 4.5x. The difference is not management quality. A parts chain sells availability across a vast catalogue of slow items, and its gross margin (about 52% of sales in 2025) and supplier financing are what make that model pay.
Frequently asked questions
What is O'Reilly Automotive's inventory turnover ratio?
O'Reilly turned its inventory 1.6x in 2025. That is $8,607.9M of cost of goods sold divided by $5,413.6M average inventory (the mean of the $5,095.8M opening and $5,731.4M closing balances) from its 10-K, about 230 days of inventory on hand. O'Reilly's own 10-K reports the same 1.6 for 2025, calculated on a trailing four-quarter average of inventory.
Why is O'Reilly's inventory turnover so low?
Because availability is what it sells. O'Reilly serves professional repair shops and do-it-yourself customers in roughly equal shares, and both need the right part today. Its 32 distribution centres give stores same-day or overnight access to more than 156,000 SKUs, and 399 Hub stores carry an average of 63,000 SKUs each. Holding parts for a huge range of vehicles, most of which sell rarely, is the point of the business.
How can O'Reilly afford to hold so much inventory?
Its suppliers fund most of it. At the end of 2025 O'Reilly's accounts payable were 123.9% of its inventory, so it owed suppliers more than the stock on its shelves was worth. Its 10-K describes supplier financing programs, funded by financial institutions, that its suppliers take part in. Programs of this kind typically let suppliers be paid early by a bank while the retailer pays on longer terms. A 1.6x turnover therefore ties up far less of O'Reilly's own cash than the ratio suggests.
How does O'Reilly compare with AutoZone?
O'Reilly turns slightly faster: 1.6x in 2025 against AutoZone's 1.4x in its fiscal 2025 (ended August 2025). Both run networks of Hub stores that hold deep parts ranges for nearby stores, and both are far slower than general retail. Advance Auto Parts, the third large US chain, turned about 1.3x, so O'Reilly is the fastest of the three.