SecProbe.io

<DOCUMENT>
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<TEXT>
 July 29, 2025

Jeremy Fletcher
Executive Vice President and Chief Financial Officer
O'Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

 Re: O'Reilly Automotive, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2024
Dear Jeremy Fletcher:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Trade &
Services
</TEXT>
</DOCUMENT>

CORRESP
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 ​ VIA EDGAR ​ July 14, 2025 ​ Securities and Exchange Commission Division of Corporation Finance 100 F Street, NE Washington, D.C. 20549 ​ Attn: Amy Geddes & Doug Jones Office of Trade & Services ​ RE: O’Reilly Automotive, Inc. Form 10-K for the Fiscal Year Ended December 31, 2024 ​ Dear Amy Geddes and Doug Jones: ​ We are writing in response to the letter of the staff (the “Staff”) of the Securities and Exchange Commission dated June 30, 2025, to Mr. Jeremy Fletcher, Executive Vice President and Chief Financial Officer of O’Reilly Automotive, Inc. (the “Company”), containing comments with respect to the Company’s above referenced filing.  For convenience, we have included our responses below, preceded by the exact text of the Staff’s comments. ​ Form 10-K for the Fiscal Year Ended December 31, 2024 ​ Consolidated Financial Statements Notes to Consolidated Financial Statements Note 1 – Summary of Significant Accounting Policies Segment Reporting, page 51 ​ 1. Please tell us how your disclosure here and in note 3 comply with the requirement to disclose how the chief operating decision maker uses your reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources pursuant to ASC 280-10-50-29.f. Refer to ASC 280-10-55-47.bb for guidance. ​ RIGHT PART, RIGHT PRICE GUARANTEE! Amy Geddes / Doug Jones Office of Trade & Services Securities and Exchange Commission July 14, 2025 ​ ​ Response: ​ The Company respectfully advises the Staff that it considers the provisions of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 280-10-50, Segment Reporting (“ASC 280”), when drafting segment related disclosures.  ASC 280 requires that entities disclose how the reported measure(s) of profit or loss are used by the chief operating decision maker in assessing segment performance and deciding how to allocate resources. ​ As disclosed on page 51 of the Company’s Form 10-K for the fiscal year ended December 31, 2024: ​ The Company’s chief operating decision maker is its Chief Executive Officer.  The Company evaluates its reportable segment primarily on the basis of sales and segment profit, which is net income.  The loss of any single customer would not have a material adverse effect on the Company.  See Note 3 for further information concerning the Company’s segment reporting. ​ As disclosed, segment profit has been determined to be net income, which is utilized by the chief operating decision maker in assessing performance and allocating resources.  As stated within Item 1 on page 5 of the Company’s Form 10-K for the fiscal year ended December 31, 2024, the stated goal of the Company as a whole is to “…continue to achieve growth in sales and profitability…”.  As net income and segment profit have been determined to be the same, the Company believes that the stated overall goals of growth in sales and profitability should be expected to apply to the segment as well as the Company as a whole.  To ensure clarity, the Company will revise future filings to clarify how segment profit is utilized in assessing performance and allocating resources. ​ The proposed revised disclosure will prospectively be as follows (additions are marked in bold): ​ The Company’s chief operating decision maker is its Chief Executive Officer.  The Company evaluates its reportable segment primarily on the basis of sales and segment profit, which is net income.   Net income is utilized by the chief operating decision maker to evaluate budget to actual results, as well as trends over time, to allocate resources, and evaluate performance.  The loss of any single customer would not have a material adverse effect on the Company.  See Note 3 for further information concerning the Company’s segment reporting. ​ Note 2 – Business Combination, page 57 ​ 2. Please tell us why it appears you did not provide disclosure pursuant to ASC 805-10-50-2.h.1, 805-20-50-1.c, and 805-30-50-1.a. and b. regarding your acquisition of Vast Auto, and provide us with the relevant disclosure for each. ​ Response: ​ The Company respectfully advises the Staff that it considers the provisions of ASC Topic 805, Business Combinations (“ASC 805”), when evaluating necessary disclosures related to acquisitions, including the acquisition of Vast Auto. Amy Geddes / Doug Jones Office of Trade & Services Securities and Exchange Commission July 14, 2025 2 ​ ​ The Company performed an analysis of both quantitative and qualitative factors during the preparation of the disclosures in Note 2 – Business Combination, and concluded that the acquisition of Vast Auto was immaterial such that the disclosures prescribed by the relevant subtopics of ASC 805 were not applicable.  In making this determination, the Company found that Vast Auto represented approximately one percent or less of the Company’s consolidated total revenues, earnings, assets, or liabilities.  This evaluation included consideration of total revenue and earnings from the acquisition that were included in the consolidated income statement, total assets and liabilities recognized upon acquisition compared to total assets and liabilities in the consolidated balance sheet, the amount of goodwill recognized, and fair value of consideration transferred.  The full amount of consideration transferred is disclosed to be cash only, therefore any discrete disclosures pertaining to different classes of consideration and their related fair values are not applicable. ​ In addition, we considered qualitative factors related to the acquisition, including any impact of the acquisition on the Company’s business and growth strategies.  Vast Auto has similar characteristics as the Company’s existing operations, including the nature of the products and services, the type and class of customers, and the methods used to distribute products and provide service to its customers.  The Company concluded that none of the qualitative factors supported a conclusion that the Vast Auto acquisition was material. ​ Due to the determination that the above items were, individually and in aggregate, immaterial to the consolidated financial statements as a whole, and that the acquisition was not qualitatively material to the Company, no further disclosure was deemed necessary.  The Company will continue to monitor and evaluate the requirements of ASC 805 and make appropriate disclosures in the future, as necessary. ​ We believe that the foregoing is fully responsive to the comment letter.  Please direct any further questions or comments to the undersigned. ​ Very truly yours, ​ O’REILLY AUTOMOTIVE, INC. ​ By: /s/ Jeremy Fletcher ​ ​ Jeremy Fletcher ​ Executive Vice President and Chief Financial Officer ​ Direct Line: (417) 874-7206 ​ Email: JeremyFletcher@oreillyauto.com ​ Amy Geddes / Doug Jones Office of Trade & Services Securities and Exchange Commission July 14, 2025 3

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 June 30, 2025

Jeremy Fletcher
Executive Vice President and Chief Financial Officer
O'Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

 Re: O'Reilly Automotive, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2024
Dear Jeremy Fletcher:

 We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Form 10-K for Fiscal Year Ended December 31, 2024
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 1 - Summary of Signficant Accounting Policies
Segment Reporting, page 51

1. Please tell us how your disclosure here and in note 3 comply with the
requirement to
 disclose how the chief operating decision maker uses your reported
measure of
 segment profit or loss in assessing segment performance and deciding how
to allocate
 resources pursuant to ASC 280-10-50- 29.f. Refer to ASC 280-10-55-47.bb
for
 guidance.
Note 2 - Business Combination, page 57

2. Please tell us why it appears you did not provide disclosure pursuant to
ASC 805-10-
 50-2.h.1, 805-20-50-1.c, and 805-30-50-1.a. and b. regarding your
acquisition of Vast
 Auto, and provide us with the relevant disclosure for each.
 In closing, we remind you that the company and its management are
responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review,
comments,
 June 30, 2025
Page 2

action or absence of action by the staff.

 Please contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309
with
any questions.

 Sincerely,

 Division of Corporation
Finance
 Office of Trade &
Services
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
January 24, 2022
Gregory D. Johnson
Chief Executive Officer and Co-President
O’Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802
Re:O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2020
Filed February 26, 2021
File No. 000-21318
Dear Mr. Johnson:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Trade & Services

CORRESP
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VIA EDGAR

​

January 20, 2022

​

Securities and Exchange Commission

Division of Corporate Finance

100 F Street, NE

Washington, D.C. 20549

​

Attn: Aamira Chaudhry & Theresa Brillant

Office of Trade & Services

​

RE:O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2020

Filed February 26, 2021

File No. 0-21318

​

Dear Mses. Chaudhry and Brillant:

​

We are writing in response to the letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated December 21, 2021, to Mr. Gregory D. Johnson, Chief Executive Officer and Co-President of O’Reilly Automotive, Inc. (the “Company”), containing comments with respect to the Company’s above referenced filing.  For convenience, we have included our responses below, preceded by the exact text of the Staff’s comments.

​

Form 10-K for the Fiscal Year Ended December 31, 2020

​

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview, page 26

​

 1. Please tell us your consideration of reporting revenue by product and services, or groups of similar products and services, such as undercar hard parts and appearance and accessories, pursuant to ASC 280-10-50-40.

​

​

RIGHT PART, RIGHT PRICE GUARANTEE!

Aamira Chaudhry / Theresa Brillant

Office of Trade & Services

Securities and Exchange Commission

January 19, 2021

​

Response:

​

The Company respectfully advises the Staff that it considers the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ACS”) Topic 280-10-50-40, Information about Products and Services (“ASC 280”) when drafting revenue disclosures.  ASC 280 states a public entity shall report the revenues from external customers for each product and service or each group of similar products and services unless it is impracticable to do so.  The amounts of revenues reported shall be based on the financial information used to produce the public entity's general-purpose financial statements.  If providing the information is impracticable, that fact shall be disclosed.

​

As disclosed on page 26 of the Company’s Form 10-K for the fiscal year ended December 31, 2020, under Item 7:

​

We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States and Mexico.  We are one of the largest U.S. automotive aftermarket specialty retailers, selling our products to both do-it-yourself (“DIY”) customers and professional service providers – our “dual market strategy.”  Our stores carry an extensive product line consisting of new and remanufactured automotive hard parts, maintenance items, accessories, a complete line of auto body paint and related materials, automotive tools and professional service provider service equipment.

​

Our extensive product line includes an assortment of products that are differentiated by quality and price for most of the product lines we offer.  For many of our product offerings, this quality differentiation reflects “good,” “better,” and “best” alternatives.  Our sales and total gross profit dollars are highest for the “best” quality category of products.  Consumers’ willingness to select products at a higher point on the value spectrum is a driver of sales and profitability in our industry.  We have ongoing initiatives focused on marketing and training to educate customers on the advantages of ongoing vehicle maintenance, as well as “purchasing up” on the value spectrum.

​

ASC 280 does not define “similar” products and services.  Therefore, the Company believes that determination of whether two or more products and services are similar and can be combined for purposes of the entity-wide disclosures will depend on the facts and circumstances of the particular entity.

​

The Company is a specialty retailer in the automotive aftermarket and does not sell a broad range of essentially different products.  Product sales are the only material source of revenue for the Company and the products sold by the Company all have similar economic characteristics.  The products sold are all, in nature, vehicle application components with similar purposes and end uses.  The Company does not generate summarized financial results for any specific product category.  The Company does not produce or manufacture the products it sells; however, the process of sourcing its products from its various suppliers does occur in a similar manner.  Although the Company has two primary types of customers, DIY and professional service providers, all products are available for sale to all of the Company’s customers and are distributed in a similar manner through the Company’s comprehensive

​

Aamira Chaudhry / Theresa Brillant

Office of Trade & Services

Securities and Exchange Commission

January 19, 2021

2

and interconnected distribution and store network.  While the Company’s extensive product line offerings are used by its customers in a variety of vehicle specific applications, the Company believes all of these applications constitute a group of similar automotive aftermarket products.

​

Based upon the above considerations regarding revenues for each product or service or each group of similar products or services, the Company has concluded that its disclosure of comprehensive automotive aftermarket products constitutes a group of similar products, and therefore, the Company believes it complies with the provisions of ASC 280 within its previously filed disclosures.

​

Item 8. Financial Statements and Supplementary Data

​

Note 1. Summary of Significant Accounting Policies

Litigation accruals, page 53

​

 2. It appears based on your disclosure that you only accrue for litigation losses that are material. Please tell us and revise your disclosure to clarify that your litigation accrual policy is in accordance with ASC 450-20-25-2.

​

Response:

​

The Company respectfully advises the Staff that it performs an analysis under the provisions of the FASB ASC Topic 450-20, Loss Contingencies (“ASC 450-20”) for all matters.  ASC 450-20 requires an estimated loss from a loss contingency to be accrued as a charge to income if both of the following conditions are met: (a) information as of the date of the financial statements indicates that it is probable (i.e., the future event is likely to occur) that one or more future events will occur confirming the fact that a liability had been incurred, and (b) the amount of the loss can be reasonably estimated.  If the reasonable estimate of the loss is a range, then condition (b) is still deemed to be met.  If an amount within the range appears at the time to be a better estimate of the loss than any other amount within the range, such amount shall be accrued.  However, if no amount within the range is a better estimate than any other amount, the lowest amount in the range shall be accrued.  In accordance with the above analysis, the Company accrues estimated losses as charges to income when the criteria in ASC 450-20-25-2 are met.

 ​

On the other hand, disclosure of the contingency, but no accrual, is required if there is at least a reasonable possibility that a loss or an additional loss will occur and either of the following conditions exist: (a) an accrual is not made for a loss contingency because the conditions described above are not met or (b) an exposure to the loss potentially exists in excess of the amount accrued.  If disclosure is required under either of these conditions, the Company discloses the nature of the contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made.

​

While the Company has consistently followed the guidance of ASC 450-20-25-2, in future filings the Company will revise its disclosure to clarify that its litigation accrual policy is in accordance with ASC 450-20-25-2.

​

Aamira Chaudhry / Theresa Brillant

Office of Trade & Services

Securities and Exchange Commission

January 19, 2021

3

 ​

The proposed revised disclosure is updated as follows:

​

Litigation accruals:

O’Reilly is currently involved in litigation incidental to the ordinary conduct of the Company’s business.  Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to reasonably estimate the probable loss in accordance with ASC 450-20.  The Company also accrues for an estimate of legal costs to be incurred for litigation matters.  Although the Company cannot ascertain the amount of liability that it may incur from legal matters, it does not currently believe that, in the aggregate, these matters, taking into account applicable insurance and accruals, will have a material adverse effect on its consolidated financial position, results of operations or cash flows in a particular quarter or annual period.

​

We believe that the foregoing is fully responsive to the comment letter.  Please direct any further questions or comments to the undersigned.

​

Very truly yours,

​

O’REILLY AUTOMOTIVE, INC.

​

By:

 /s/  Thomas McFall

 ​

​

 Thomas McFall

​

 Executive Vice President and Chief Financial Officer

​

 Direct Line:  (417) 874-7162

​

 Email:  tmcfall@oreillyauto.com

​

​

Aamira Chaudhry / Theresa Brillant

Office of Trade & Services

Securities and Exchange Commission

January 19, 2021

4

United States securities and exchange commission logo
December 21, 2021
Gregory D. Johnson
Chief Executive Officer and Co-President
O’Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802
Re:O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2020
Filed February 26, 2021
File No. 000-21318
Dear Mr. Johnson:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2020
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview, page 26
1.Please tell us your consideration of reporting revenue by product and services, or groups
of similar products and services, such as undercar hard parts and appearance and
accessories, pursuant to ASC 280-10-50-40.

 FirstName LastNameGregory D. Johnson
 Comapany NameO’Reilly Automotive, Inc.
 December 21, 2021 Page 2
 FirstName LastName
Gregory D. Johnson
O’Reilly Automotive, Inc.
December 21, 2021
Page 2
Item 8. Financial Statements and Supplementary Data
Note 1. Summary of Significant Accounting Policies
Litigation accruals, page 53
2.It appears based on your disclosure that you only accrue for litigation losses that are
material. Please tell us and revise your disclosure to clarify that your litigation accrual
policy is in accordance with ASC 450-20-25-2.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact Aamira Chaudhry at 202-551-3389 or Theresa Brillant at 202-551-
3307 if you have questions regarding the comments.
Sincerely,
Division of Corporation Finance
Office of Trade & Services

Mail Stop 3561

July 26, 2018

Thomas McFall
Chief Financial Officer
O Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

Re: O Reilly Automotive, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed February 28, 2018
File No. 0 -21318

Dear Mr. McFall :

We have completed our review of your filing .  We remind you that the company and its
management are responsible for the accuracy and adequacy of the ir disclosure s, notwithstanding
any review, comments, action or absence  of action  by the staff .

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

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		Document

VIA EDGAR

July 24, 2018

Securities and Exchange Commission

Division of Corporate Finance

100 F Street, NE

Washington, D.C.  20549

Attn:  William H. Thompson

Accounting Branch Chief

RE:

 O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2017

Filed February 28, 2018

Form 8-K filed April 25, 2018

File No. 0-21318

Dear Mr. Thompson:

We are writing in response to the letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated July 20, 2018, to Mr. Thomas McFall, Chief Financial Officer of O’Reilly Automotive, Inc.  (the “Company”), containing comments with respect to the Company’s above referenced filings.  For convenience, we have included our responses below, preceded by the exact text of the Staff’s comments.

Form 10-K for the Fiscal Year Ended December 31, 2017

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations, page 27

1.

 Reference is made to your disclosure that defines comparable store sales.  In future filings, please definitely state whether or not online sales are included in this measure.

RIGHT PART, RIGHT PRICE GUARANTEE!

William H. Thompson

Accounting Branch Chief

Securities and Exchange Commission

July 24, 2018

Response:

In future filings, we will expand our disclosure to definitively state whether or not online sales are included in our calculation of comparable store sales.  Our proposed revised disclosure is expanded as follows:

Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members.  Online sales, resulting from ship-to-home orders and pick-up-in-store orders, for stores open at least one year, are included in the comparable store sales calculation.

Form 8-K filed April 25, 2018

Exhibit 99.1

2.

 Reference is made to your disclosure of expected fiscal 2018 free cash flow.  In future earnings releases filed under Item 2.02 of Form 8-K, please present the most directly comparable financial measure calculated and presented in accordance with GAAP; and provide a reconciliation (by schedule or other clearly understandable method), which shall be quantitative, to the extent available without unreasonable efforts, of the differences between the non-GAAP financial measure and the most comparable financial measure calculated and presented in accordance with GAAP.  Refer to Item 10(e)(1)(i)(A) and (B) of Regulation S-K.

Response:

In future earnings releases filed under Item 2.02 of Form 8-K, where reference is made to disclosure of expected free cash flow, we will expand our disclosure to present expected net cash provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, and we will provide a quantitative reconciliation of the differences between expected free cash flow and expected net cash provided by operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP.  Our proposed revised disclosure is expanded as follows:

2

William H. Thompson

Accounting Branch Chief

Securities and Exchange Commission

July 24, 2018

The table below outlines the Company’s guidance for selected full-year XXXX financial data:

 For the Year Ending

December 31, XXXX

Net cash provided by operating activities

 $X.X to $X.X

Capital expenditures

 $X.X to $X.X

Free cash flow (1)

 $X.X to $X.X

(1)

 Free cash flow is a non-GAAP financial measure.  The table below reconciles Free cash flow guidance to Net cash provided by operating activities guidance, the most directly comparable GAAP financial measure:

(in millions)

 For the Year Ending

December 31, XXXX

Net cash provided by operating activities

 $               X

 to

 $               X

Less:

 Capital expenditures

 X

 to

 X

 Excess tax benefit from share-based compensation payments

 X

 to

 X

Free cash flow

 $               X

 to

 $               X

We believe that the foregoing is fully responsive to the comment letter.  Please direct any further questions or comments to the undersigned.

Very truly yours,

O’REILLY AUTOMOTIVE, INC.

By:

 /s/

 Thomas McFall

 Thomas McFall

 Executive Vice President and Chief Financial Officer

 Direct Line:  (417) 874-7162

 Email:  tmcfall@oreillyauto.com

3

Mail Stop 3561

July 20, 2018

Thomas McFall
Chief Financial Officer
O Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

Re: O Reilly Automotive, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed February 28, 2018
Form 8 -K filed April 25, 2018
File No. 0 -21318

Dear Mr. McFall :

We have limited our review  of your filing  to the financial statements and related
disclosures and have the following comments.  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2017

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations, page 27

1. Reference is made to your disclosure that defines comparable store sales.   In future
filings, please definitely state whether or not online sales are included in this measure.

Thomas McFall
O Reilly Automotive, Inc.
July 20, 2018
Page 2

Form 8 -K filed April 25, 2018

Exhibit 99.1

2. Reference is made to your disclosure of expected fiscal 2018 free cash flow.  In future
earnings releases filed under Item 2.02 of Form 8 -K, please present the most directly
comparable financial measure calculated and presented in accordance with GAAP; and
provide  a reconcilia tion (by schedule or other clearly understandable method), which
shall be quantitative, to the extent available without unreasonable efforts, of the
differences between the  non-GAAP  financial measure and the most comparable financial
measure  calculated and  presented in accordance with GAAP.  Refer to Item
10(e)(1)(i)(A) and (B) of Regulation S -K.

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action  or absence of
action by the staff.

You may contact Adam Phippen, Staff Accountant,  at (202) 551 -3336 or me at (202)
551-3344 with any  questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

Mail Stop 3561
April 25, 2016

Greg L. Henslee
Chief Executive  Officer
O’Reilly Automotive,  Inc.
233 South Patterson Avenue
Springfield, MO 65805

Re: O’Reilly Automotive, Inc.
 Form 10-K for the Fis cal Year Ended December 31 , 2015
Filed February 26 , 2016
File No . 21318

Dear Mr.  Henslee :

We have completed our review of your filing.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
       Office of Consumer Products

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VIA EDGAR AND OVERNIGHT MAIL

April 20, 2016

Securities and Exchange Commission

Division of Corporate Finance

100 F Street, NE

Washington, D.C.  20549

Attn:  William H. Thompson

Accounting Branch Chief

Re:    O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2015

Filed February 26, 2016

File No. 000-21318

Dear Mr. Thompson:

We are writing in response to the letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated April 7, 2016, to Mr. Greg L. Henslee, Chief Executive Officer of O’Reilly Automotive, Inc.  (the “Company”), containing comments with respect to the Company’s above referenced filing.  For convenience, we have included our responses below, preceded by the exact text of the Staff’s comment.

Consolidated Statements of Cash Flows, page 46

1.

 Please tell us your consideration of disclosing noncash investing and financing activities that affect recognized assets or liabilities but do not result in cash receipts or cash payments during each year presented.  Please refer to ASC 230-10-50-3.

Response:

The Company applies the guidance provided by the Financial Accounting Standards Board Accounting Standards Codification 230-10-50-3-Noncash Investing and Financing Activities (“ASC 230-10-50-3”) when evaluating applicable disclosures related to noncash investing and financing activities that affect recognized assets or liabilities but do not result in cash receipts or cash payments during each year presented.  According to ASC 230-10-50-3,

Information about all investing and financing activities of an entity during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period shall be disclosed.  Those disclosures may be either narrative or summarized in a schedule, and they shall clearly relate the cash and noncash aspects of transactions involving similar items.

Applying this guidance for each period presented, the Company examines changes in its recognized assets and liabilities for determination of the appropriate classification and disclosure in the Company’s Consolidated Statements of Cash Flows.  During this examination process, potential noncash investing and financing activities are evaluated for required supplemental disclosures.  For the years ended December 31, 2015, 2014 and 2013, no material transactions were

RIGHT PART, RIGHT PRICE GUARANTEE!

discovered during this evaluation process that would require disclosure as a noncash investing or financing activity.  The Company did identify certain immaterial noncash investing and financing activities during its examination process, primarily related to accrued costs for construction in process assets for new stores and distribution centers.  The Company’s Consolidated Balance Sheets reported for each period reflected these values as a component of Net property and equipment and as a component of Other current liabilities; however, the total of these transactions did not exceed $5 million for any of the years presented and were determined to be immaterial for supplemental disclosures as the accruals were less than 0.1% of Net property and equipment in each reported period.  To the extent applicable, the Company did provide disclosures elsewhere in its Annual Reports on Form 10-K stating that certain noncash investing or financing activities did not occur during the periods presented.  For example, in the Leasing Note to the Company’s Consolidated Financial Statements for each of the years ended December 31, 2015, 2014 and 2013, the Company stated that it did not acquire any property under capital lease agreements and in Part II, Item 5 for each of the years ended December 31, 2015, 2014 and 2013, the Company stated that it did not declare a dividend.

The Company will continue to examine changes in its recognized assets and liabilities for determination of the appropriate classification and disclosure in its Consolidated Statements of Cash Flows and will continue to evaluate any potential noncash investing and financing activities during this process.  Any material transactions that are identified as noncash will be properly disclosed as supplemental noncash activities, either summarized in a schedule accompanying the Company’s Consolidated Statements of Cash Flows or in narrative form elsewhere in the Company’s Notes to its Consolidated Financial Statements.

Note 1 - Summary of Significant Accounting Policies

Segment reporting, page 47

2.

 We note your disclosure in Item 1 that you carry an extensive product line including new and remanufactured automotive hard parts, maintenance items and accessories.  We also note you offer many enhanced service and programs to your customers.  Please tell us the significance of revenues from services and your consideration of disclosing net sales and costs and expenses applicable to sales of tangible products and revenues from services on the face of the statements of income in accordance with paragraphs (b)1(a) and 2 of Rule 5-03 of Regulation S-X.  In addition, please tell us what consideration you gave to disclosing revenue for each group of similar products and services in accordance with ASC 280-10-50-40.

Response:

The Company does offer enhanced services and programs to its customers as disclosed in Item 1 of its Annual Report on Form 10-K.  For the majority of these enhanced services and programs the Company does not generate revenue and most of these enhanced services are offered at no charge to our customers.  Services offered to our customers at no charge that may not directly relate to the purchase of a product include used oil, oil filter and battery recycling, battery diagnostic testing, electrical and module testing, check engine light code extraction and loaning tools.  Other services that are provided to the Company’s customers at no charge, but may be related to the purchase of a product, include battery, wiper and bulb installation and professional paint shop mixing.  As a courtesy to our customers, the Company’s Team Members will assist our customer’s with the installation of purchased products in the parking lots outside of the Company’s stores.  The Company does not charge an additional fee for these customer service related activities, and the normal selling price is charged to the customer regardless of whether or not the customer requests the assistance of the Team Member to install these items.  The Company provides these no charge, enhanced services and programs to our customers as a component of its focus on consistent, excellent customer service.

Certain of the enhanced services and programs offered to the Company’s customers do generate an immaterial amount of revenue for the Company.  For the years ended December 31, 2015, 2014 and 2013, the Company generated $10.2 million, $10.2 million and $10.4 million, respectively, of service revenue generated from providing drum and rotor resurfacing and other machine shop services.  These amounts represented less than 0.2% of total consolidated Company revenue for each of the years reported.  The Company evaluated the guidance in Regulation S-X Rule 5-03, paragraphs (b)1(a) and 2 and determined the total revenue generated from these services is not material for discrete disclosure.

2

The Company also evaluates the requirements of the guidance provided by the Financial Accounting Standards Board Accounting Standards Codification 280-10-50-40-Information About Products and Services (“ASC 280-10-50-40”) related to disclosing revenues for each group of similar products and services.  ASC 280-10-50-40 states,

A public entity shall report the revenues from external customers for each product and service or each group of similar products and services unless it is impracticable to do so.  The amounts of revenues reported shall be based on the financial information used to produce the public entity’s general-purpose financial statements.  If providing the information is impracticable, that fact shall be disclosed.

In evaluating the requirements of ASC 280-10-50-40, the Company determined that all of the products sold in its stores are similar products, as they fulfill the automotive care needs of the Company’s customers.  As the Company views all of the products sold as similar products, revenues are reported in the Company’s general-purpose financial statements as a single line.  The Company then utilizes the financial information produced by its general-purpose financial statements to report revenues to the public as a single line.

The Company will continue to monitor and evaluate the need for discrete disclosure of similar product and service revenue as required by Rule 5-03 of Regulation S-X, as well as ASC 280-10-50-40.  If, in the future, the Company determines that the products it sells are not similar in nature and the discrete product sales become material, it will provide all required disclosures in the applicable future periods.

The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosures in the filing, that Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and that the Company may not assert Staff comments as a defense in any proceedings initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is fully responsive to the comment letter.  Please direct any further questions or comments to the undersigned.

Very truly yours,

O’REILLY AUTOMOTIVE, INC.

/s/

 Thomas McFall

Thomas McFall

Executive Vice President / Chief Financial Officer

Direct Line:  (417) 874-7162

Email:  tmcfall@oreillyauto.com

3

Mail Stop 3561
April 7 , 2016

Greg L. Henslee
Chief Executive  Officer
O’Reilly Automotive,  Inc.
233 South Patterson Avenue
Springfield, MO 65805

Re: O’Reilly Automotive, Inc.
 Form 10-K for the Fis cal Year Ended December 31 , 2015
Filed February 26 , 2016
File No . 21318

Dear Mr.  Henslee :

We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these comments, we may have additional comments.

Consolidated Statements of Cash Flows, page 46

1. Please te ll us your consideration of disclosing noncash investing and financing activities
that affect recognized assets or liabilities but do not result  in cash receipts or cash
payments during each year presented.  Please refer to ASC 2 30-10-50-3.

Note 1 – Summary of Significant Accounting Policies

Segment reporting, page 47

2. We note your disclosure in Item  1 that you carry an extensive product line including new
and remanufactured automotive hard parts, maintenance items and accessories.  We also
note you offer many enhanced services and programs to your customers.  Please tell us
the significance of revenues from services and your consideration of disclosing net sales
and costs and expenses applicable to sales of tangible products and revenues from
service s on the face of the statements of income in accordance with paragraph s (b)1(a)

 Greg L. Henslee
 O’Reilly Automotive, Inc.
 April 7 , 2016
 Page 2

 and 2 of Rule 5 -03 of Regulation S -X.  In addition, please tell us what consideration you
gave to disclosing revenues for each group of similar products and services in accor dance
with ASC 280 -10-50-40.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Ac t rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comment s, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commissi on from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Scott Str inger, Staff Accountant, at ( 202) 551 -3272 or me at (202) 551 -
3344  with any questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
       Office of Consumer Products

March 23, 2015

Thomas McF all
Chief Financial Officer
O’Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

Re: O’Reilly Automotive, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2014
Filed February 27, 2015
File No. 0-21318

Dear Mr. McFall :

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We u rge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ William H. Thompson

William H. Thompso n
Accounting Branch Chief

CORRESP
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		SEC Correspondence to 03.13.2015

VIA EDGAR AND OVERNIGHT MAIL

March 19, 2015

Securities and Exchange Commission

Division of Corporate Finance

100 F Street, NE

Washington, D.C.  20549

Attn:  William H. Thompson

Accounting Branch Chief

Re:    O'Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2014

Filed February 27, 2015

File No. 000-21318

Dear Mr. Thompson:

We are writing in response to the letter of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated March 13, 2015, to Mr. Thomas McFall, Chief Financial Officer of O’Reilly Automotive, Inc.  (the “Company”), containing a comment with respect to the Company’s above referenced filing.  For convenience, we have included our response below preceded by the exact text of the Staff’s comment.

Item 8. Financial Statements and Supplementary Data

Note 1 - Summary of Significant Accounting Policies, page 46

1.

 We note your disclosure on page 9 that you maintain a loyalty program providing members the opportunity to earn points which may be redeemed toward coupons for discounts on future purchases.  Please tell us how you account for your customer loyalty program and your consideration of disclosing your accounting policy specifically as it relates to the program.

Response:

In 2013, the Company established a retail loyalty program named “O’Rewards”, which was designed to build Brand recognition.  The program allows a retail customer to enroll at no charge, does not impose a membership fee and provides members with the ability to earn loyalty points by making qualifying purchases at the Company’s stores.  Upon reaching 150 points, a member is automatically issued a five dollar coupon, which is mailed or emailed to the member.  The coupons, which expire after 90 days of issuance, have no cash value and may be redeemed for most items in the Company’s stores with a total purchase price equal to or greater than the value of the coupon.  Loyalty points accrued in a member’s account, which have not been awarded to the member with a coupon, expire 12 months after the date in which they were earned.

RIGHT PART, RIGHT PRICE GUARANTEE!

The applicable United States generally accepted accounting principles guidance used by the Company to account for its loyalty program is Financial Accounting Standards Board Accounting Standards Codification 605-50-Customer Payments and Incentives (“ASC 605-50”).  According to ASC 605-50:

“The vendor shall recognize the rebate or refund obligation as a reduction of revenue based on a systematic and rational allocation of the cost of honoring rebates or refunds earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate or refund. Measurement of the total rebate or refund obligation shall be based on the estimated number of customers that ultimately will earn and claim rebates or refunds under the offer (that is, breakage should be considered if it can be reasonably estimated).”

Based on this guidance, the Company reduces revenue in periods when loyalty points are earned by members, based on a breakage adjusted estimated redemption rate, and records a corresponding deferred revenue liability.  The Company recognizes revenue in periods when coupons are redeemed and records a corresponding reduction to the deferred revenue liability.

The Company evaluated the necessity for disclosure of its loyalty program accounting policy and activity in the footnotes to its consolidated financial statements and determined that disclosure was not warranted due to immateriality.  As of December 31, 2014, the Company had recorded a deferred revenue liability of $4.3 million related to its loyalty program and during the year ended December 31, 2014, the Company recognized $5.6 million of deferred revenue.  As of December 31, 2013, the Company had recorded a deferred revenue liability of $1.2 million related to its loyalty program and during the year ended December 31, 2013, the Company recognized $0.3 million of deferred revenue.  The deferred revenue liability represented 0.15% and 0.05% of the Company’s total current liabilities as of December 31, 2014 and 2013, respectively, and the loyalty program deferred revenue recognized for the years ended December 31, 2014 and 2013, was 0.078% and 0.005% of sales, respectively, and immaterial for disclosure purposes.

The Company will continue to account for its loyalty program in accordance with ASC 605-50 and will continue to monitor the program’s impact on its consolidated financial statements and the need for disclosure of its loyalty program in the corresponding footnotes.

The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosures in the filing, that Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and that the Company may not assert Staff comments as a defense in any proceedings initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is fully responsive to the comment letter.  Please direct any further questions or comments to the undersigned.

Very truly yours,

O’REILLY AUTOMOTIVE, INC.

/s/ Thomas McFall

Thomas McFall

Executive Vice President / Chief Financial Officer

Direct Line:  (417) 874-7162

Email:  tmcfall@oreillyauto.com

March 13, 2015

Thomas McF all
Chief Financial Officer
O’Reilly Automotive, Inc.
233 South Patterson Avenue
Springfield, Missouri 65802

Re: O’Reilly Automotive, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2014
Filed February 27, 2015
File No. 0-21318

Dear Mr. McFall :

We have limited our review  of your filing  to the financial statements and related
disclosures and have the following comment .  In our comment , we may ask you  to provide us
with information so we may better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comment applies  to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment , we may have  additional comments.

Item 8.  Financial Statements and Supplementary Data

Note 1 – Summary of Significant Accounting policies, page 46

1. We note your disclosure on page 9 that you maintain a loyalty program providing
members the opportunity to earn points which may be redeemed toward coupons for
discounts on future purchases.  Please tell us how you  account for your customer loyalty
program and your consideration of disclosing your accounting policy specifically as it
relates to the program.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be  certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsib le for the accuracy
and adequacy of the disclosures they have made.

  Thomas McFall
  O’Reilly Automotive, Inc.
 March 13, 2015
  Page 2

  In responding to our comment , please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in th e filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact  Donna Di Silvio, Staff Accountant,  at (202) 551 -3202  or me at (202)
551-3344  with any questions.

Sincerely,

 /s/ William H. Thompson

       William H. Thompson
       Accounting Branch Chief

November 21, 2012

Via E -mail
Greg Henslee
Chief Executive Officer
O’Reilly Automotive, Inc.
233 South Patterson
Springfield, MO 65802

Re: O’Reilly Automotive, Inc.
 Form 10 -K for Fiscal Year Ended December 31, 2011
 Filed February 28, 2012
Definitive Proxy Statement on Schedule 14A
Filed March 23, 2012
File No. 000 -21318

Dear Mr. Henslee :

We have completed our review of your filings .  We remind you that our comments or
changes to  disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person  under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Mara L. Ransom

Mara L. Ransom
Assistant Director

CORRESP
1
filename1.htm

Correspondence Letter

 November 16, 2012

 VIA EDGAR AND OVERNIGHT MAIL

 Securities and Exchange Commission

100 F Street, NE

 Washington, D.C. 20549

Attn:
Division of Corporate Finance

Re:
O’Reilly Automotive, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2011

Filed February 28, 2012

Definitive Proxy Statement on Schedule 14A

Filed March 23, 2012

 File No. 000-21318

 Ladies and Gentlemen:

We are writing in response to the telephonic comments from the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) received on November 14, 2012, to O’Reilly Automotive, Inc. (the “Company”) with respect to the above-referenced filings (the “Filings”).

Definitive Proxy Statement on Schedule 14A

 Response:

 As it pertains to our response to question
1 of the Commission’s letter dated September 27, 2012, we affirm that the Company, in future filings, will expand our disclosure to include the specific performance metrics and their relative weights utilized by the Compensation Committee
in determining the Company’s executive officers’ incentive compensation, as well as the maximum achievement level applicable to incentive compensation for the Company’s executive officers. In addition, in future filings, we will
expand our disclosure to include the Company’s view on the difficulty in achieving target levels for the performance metrics.

 We hereby acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the Filings; Staff comments or changes to disclosure in response to Staff comments do not foreclose
the Commission from taking any action with respect to the Filings; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 RIGHT PART, RIGHT PRICE GUARANTEE!

 Securities and Exchange Commission

 November 16, 2012

  Page
 2

 We respectfully submit the above information to the Commission and believe that it is
fully responsive to the comment letter and telephonic comments. Please direct any further questions or comments to the undersigned.

 Very
truly yours,

 O’REILLY AUTOMOTIVE, INC.

 /s/ Thomas McFall

Chief Financial Officer

Direct Line:

(417) 874-7162

Fax No.:

(417) 874-7145

CORRESP
1
filename1.htm

Correspondence

 October 11, 2012

 VIA EDGAR AND OVERNIGHT MAIL

 Securities and Exchange Commission

100 F Street, NE

 Washington, D.C. 20549

Attn:
Mara L. Ransom

Division of Corporate Finance

Re:
O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2011

Filed February 28, 2012

Definitive Proxy Statement on Schedule 14A

Filed March 23, 2012

File No. 000-21318

 Ladies and
Gentlemen:

 We are writing in response to the comments contained in a letter from the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) dated September 27, 2012, to O’Reilly Automotive, Inc. (the “Company”) with respect to the above-referenced filings (the “Filings”).

For the convenience of the Staff, we have set forth the comments contained in the comment letter along with our responses. All responses
in our letter are provided on a supplemental basis.

 Definitive Proxy Statement on Schedule 14A

Compensation of Executive Officers, page 15

 Incentive Compensation Plan, page 17

1.
We note your disclosure that the Compensation Committee has established an incentive compensation plan based upon “certain objective performance goals” and
that the financial metrics utilized by your Compensation Committee include “sales performance, operating income performance and financial returns, as well as various balance sheet measures.” Please provide greater detail regarding the
performance goals utilized by the Compensation Committee in determining the amounts of non-equity incentive compensation to award to your NEOs, specifically identifying each performance goal utilized and any relative weight attributed to each goal.
In this regard, we note that Instruction 4 to Item 402(b) of Regulation S-K allows registrants to omit target levels with respect to the quantitative or qualitative performance-related factors considered by the Compensation Committee, but

 Securities and Exchange Commission

 October 11, 2012

  Page
 2

does not allow registrants to omit disclosure of the specific performance-related factors utilized by the Compensation Committee. Please also discuss how difficult it will be for each executive
to achieve the undisclosed target levels, and state whether there is a maximum achievement level applicable to these targets. In this regard, we note that incentive payouts have been awarded at 403% of target.

Response:

 The performance metrics used for the year ended December 31, 2011, with respect to the annual bonus disclosed in the proxy statement for our 2012 annual meeting were as follows:

Comparable Store Sales

 Operating Margin

 Net Inventory Turnover

Free Cash Flow

Performance of Company as Compared to Industry Peer Group

 The weighting of these measures was set at 25%, 25%, 15%, 15% and 20%, respectively, with the actual payout of each measure determined based on achievement of the metric in question.

The Company sets target achievement levels for its executives with respect to these performance metrics based on the Board of Director
approved operating plan, which reflects projected Company performance for the upcoming fiscal year, and the targets are calibrated such that they are challenging enough to require strong and consistent effort by the executives in order to be
achieved. It is our view that incentive compensation should not be payable without significant achievement, and that targets should also be set at a level which is sufficiently attainable to be strongly motivating. The difficulty in achieving the
targets is directly correlated to the ultimate performance of the Company as compared to the projected performance as identified in the Board approved operating plan. The Company’s actual performance above projections would result in executive
payouts above target levels and would likely also result in an increase in total shareholder value. For the fiscal year ended December 31, 2010, the executive payout under the incentive compensation plan was at 403% of target, and for the same
time period our shareholders realized a 58% increase in the price of O’Reilly stock. For the fiscal year ended December 31, 2007, the executive payout under the incentive compensation plan was at 59% of target, and for the same time period
our shareholders realized a 1% increase in the price of O’Reilly stock.

 Under our 2012 Incentive Award Plan, the maximum
aggregate amount of cash compensation which may be paid to any one participant in any year in respect of all awards that are intended to constitute performance-based compensation is currently $10,000,000.

2.
Please also tell us whether the types of financial metrics you use now differ from those disclosed in the proxy statement for your 2008 annual meeting, which was
when you last provided the staff with your analysis as to why quantified disclosure of such targets is inappropriate due to the highly confidential and competitively sensitive nature of such targets. To the extent you are utilizing new targets,
please provide us with your analysis as to why you believe competitive harm would result from the disclosure of such targets. See Instruction 4 to Item 402(b) of Regulation S-K and Question 118.04 of our Regulation S-K Compliance and Disclosure
Interpretations located at our web-site, www.sec.gov.

 Securities and Exchange Commission

 October 11, 2012

  Page
 3

 Response:

 The types of performance metrics used for the year ended December 31, 2007, with respect to the annual bonus disclosed in the proxy statement for our 2008 annual meeting and the types of performance
metrics used for the year ended December 31, 2011, with respect to the annual bonus disclosed in the proxy statement for our 2012 annual meeting measured similar performance characteristics. Two of the five individual metrics were updated for
the 2011 fiscal year, largely to eliminate existing metrics which had measured substantially the same performance characteristic. However, the types of performance metrics were not changed and continued to focus on sales performance, operating
income performance, balance sheet performance and overall financial returns.

 In our letter to the Commission dated
April 23, 2008, we stated that we had made the determination that omitting specific target information (the “Targets”) is appropriate because disclosing the Targets would result in competitive harm to the Company in accordance with
Instruction 4 to Item 402(b) of Regulation S-K (“Instruction 4”), and we continue to believe strongly that disclosing the Targets would result in such harm. Instruction 4 permits registrants to omit specific quantitative or
qualitative performance-related factors from the registrant’s compensation discussion and analysis where such factors involve confidential trade secrets or confidential commercial or financial information and if disclosed, would result in
competitive harm to the registrant. Instruction 4 states that the standard to use when determining whether disclosure would result in competitive harm is the same standard that applies when a registrant requests confidential treatment of
confidential trade secrets or confidential commercial or financial information pursuant to Rule 406 of the Securities Act of 1933, as amended, and Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

These rules incorporate the criteria for non-disclosure when relying upon Exemption 4 of the Freedom of Information Act
(“FOIA”). 5 U.S.C. § 552(b)(4); 17 C.F.R. § 200.80(b)(4). Exemption 4 protects from public disclosure “trade secrets and commercial or financial information obtained from a person” that are “confidential.”
Applicable case law has interpreted “commercial or financial information” broadly and has given such terms their ordinary meaning. See Public Citizen Health Research Group v. Food & Drug Admin., 704 F.2d 1280, 1290 (D.C.
Cir. 1983). Moreover, in Critical Mass Energy Project v. Nuclear Regulatory Comm’n, 644 F. Supp. 344, 346 (D.C. Cir. 1986), the court held that “information is commercial if it relates to commerce, or it has been compiled in pursuit
of profit.” We respectfully submit that the Targets, because they include information relating to sales, operating margin, net inventory turnover, free cash flow and relative company performance, constitute commercial or financial information
within the purview of Exemption 4. In addition, our company, which is a corporation, qualifies as a person within the purview of Exemption 4.

 The test for determining whether information is confidential under § 552(b)(4) is that such information “must have the effect either (1) of impairing the government’s ability to
obtain ... necessary information in the future, or (2) of causing substantial harm to the competitive position of the person from whom the information was obtained.” Nat’l Parks and Conservation Ass’n v. Morton, 498 F.2d
765, 770 (D.C. Cir. 1974) (emphasis added)); Critical Mass Energy Project v. Nuclear Regulatory Comm’n, 975 F.2d 871, 878 (D.C. Cir. 1992). The person claiming this exemption need not show any actual adverse effect on its competitive
position but need only demonstrate that there is actual competition and that substantial competitive injury would likely result from disclosure. Gulf & Western Indus. Inc. v. United States, 615 F.2d 527, 530 (D.C. Cir. 1979));
Nat’l Parks and Conservation Ass’n v. Kleppe, 547 F.2d 673, 679 (D.C. Cir. 1976).

 Securities and Exchange Commission

 October 11, 2012

  Page
 4

 Here, the second prong of the confidentiality test is met because there is actual
competition and public disclosure of the Targets would likely cause substantial harm to the competitive position of the Company. As we discussed in our 2008 response letter, we believe the automotive aftermarket continues to be highly competitive
and disclosure of the Targets would allow our competitors to recreate, with a high degree of certainty, the internal forecasts upon which we rely to help maintain our competitive advantage. Disclosing the Targets would also provide our competitors
with valuable insight into various aspects of our business that we feel give us that competitive advantage. Competitors could then use the insight gained from reviewing the Targets to strategically undermine our internal plans, including competitive
recruitment of our executives by offering them specifically targeted compensation packages based on knowledge obtained from reviewing our Target disclosures.

 In its evaluations regarding its compensation disclosures, the Company has carefully and thoughtfully balanced the need for investors to have sufficient information about the Company’s compensation
programs against the need for the Company to disclose information in a manner which does not result in competitive harm. We have continued to disclose information regarding these matters at the level of detail that we proposed in our April 23,
2008, letter to the Commission and believe that this level of disclosure remains appropriately tailored, particularly given that the level of competition in our industry has continued to intensify.

We hereby acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the Filings; Staff comments or
changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Filings; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.

 We respectfully submit the above information to the Commission
and believe that it is fully responsive to the comment letter. Please direct any further questions or comments to the undersigned.

 Very truly
yours,

 O’REILLY AUTOMOTIVE, INC.

 /s/ Thomas McFall

 Chief Financial Officer

Direct Line:         (417) 874-7162

 Fax No.:              (417) 874-7145

September 27, 2012

Via E -mail
Greg Henslee
Chief Executive Officer
O’Reilly Automotive, Inc.
233 South Patterson
Springfield, MO 65802

Re: O’Reilly Automotive, Inc.
Form 10 -K for Fiscal Year Ended December 31, 2011
Filed February  28, 2012
Definitive Proxy  Statement on Schedule 14A
Filed March 23, 2012
File No. 000 -21318

Dear Mr. Henslee :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and  circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Definitive Proxy Statement on Schedule 14A

Compensation of Executive Officers, page 15

Incentive Compensation Plan, page 17

1. We note your disclosure that the Compensation Committee has established an
incentive compensation plan based upon “certain objective performance goals” and
that the financia l metrics utilized by your Compensation Committee include “sales
performance, operating income performance and financial returns, as well as various
balance sheet measures.”  Please provide greater detail regarding the performance
goals utilized by the Com pensation Committee in determining the amounts of non -
equity incentive compensation to award to your NEOs, specifically identifying each

Greg Henslee
O’Reilly Automotive, Inc.
September 27, 2012
Page 2

 performance goal utilized and any relative weight attributed to each goal.  In this
regard, we note that Instruction 4 to Item 402(b) of Regulation S -K allows registrants
to omit target levels with respect to the quantitative or qualitative performance -related
factors considered by the Compensation Committee, but does not allow registrants to
omit disclosure of the specifi c performance -related factors utilized by the
Compensation Committee.  Please also discuss how difficult it will be for each
executive to achieve the undisclosed target levels, and state whether there is a
maximum achievement level applicable to these targ ets.  In this regard, we note that
incentive payouts have been awarded at 403% of target.

2. Please also tell us whether the types of financial metrics you use now differ from
those disclosed in the proxy statement for your 2008 annual meeting, which was
when you last provided the staff with your analysis as to why quantified disclosure of
such targets is inappropriate due to the highly confidential and competitively sensitive
nature of such targets.  To the extent you are utilizing new targets, please provid e us
with your analysis as to why you believe competitive harm would result from the
disclosure of such targets. See Instruction 4 to Item 402(b) of Regulation S -K and
Question 118.04 of our Regulation S -K Compliance and Disclosure Interpretations
located at our web -site, www.sec.gov.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Greg Henslee
O’Reilly Automotive, Inc.
September 27, 2012
Page 3

Please contact Lisa Kohl, Staff A ttorney, at (202) 551 -3252, or me at (202) 551 -3720
with any questions.

Sincerely,

 /s/ Mara L. R ansom

Mara L. Ransom
Assistant Director

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

August 2, 2010
  Mr. Greg Henslee  Chief Executive Officer and Co-President  O’Reilly Automotive, Inc.  233 South Patterson  Springfield, Missouri 65802
Re:  O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2009
Filed February 26, 2010
Definitive Proxy Statement on Schedule 14A
Filed March 19, 2010
File No. 000-21318

Dear Mr. Henslee:

We have completed our review of your Form 10-K and related filings and have no further
comments at this time.

Sincerely,     H. Christopher Owings
         A s s i s t a n t  D i r e c t o r

CORRESP
1
filename1.htm

Correspondence

 July 1, 2010

Securities and Exchange Commission

 Division of
Corporate Finance

 100 F Street, NE

Washington, DC 20549

Attn:
H. Christopher Owings

 Assistant
Director

RE:
O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2009

Filed February 26, 2010

Definitive Proxy Statement on Schedule 14A

Filed March 19, 2010

File No. 000-21318

Dear Mr. Owings:

 We are
writing in response to the additional comments contained in a letter from you dated June 18, 2010, to O’Reilly Automotive, Inc., with respect to our Form 10-K for the Fiscal Year Ended December 31, 2009, and our Schedule 14A Proxy
Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. As in our prior correspondence, we have set forth the comments contained in the comment letter along with our responses.

Form 10-K for the Fiscal Year Ended December 31, 2009

Note 1 – Summary of Significant Accounting Policies, page 48

Revenue Recognition, page 48

1.
We have reviewed your response to prior comment four in our letter dated April 9, 2010, noting that your estimated return liability is recorded at period end as a
reduction of sales. Please tell us how your accounting treatment complies with FASB ASC 605-15-45-1, which indicates that revenues and costs of sales reported in the income statements should be reduced to reflect estimated returns. Please also tell
us how your sales and cost of goods sold would have changed for the historical periods presented had you applied the preceding guidance.

Response:

 FASB ASC
605-15-45-1 (“ASC 605”) states that “for any sales made with a right of return in which the criteria in paragraph 605-15-25-1 are met revenue and cost of sales reported in the income statement shall be reduced to reflect estimated
returns.” Each of the

 H. Christopher Owings

Assistant Director,

 U.S. Securities and
Exchange Commission

 July 1, 2010

Company’s sales transactions meets all of the criteria in paragraph FASB ASC 605-15-25-1. The Company records actual returns as a reduction of revenue at selling price and a reduction of
cost of goods sold in the amount of the previously recorded cost. At the end of each period, the Company analyzes the average elapsed time between sales and corresponding returns in order to estimate the potential returns in future periods related
to sales transactions in the period previously closed. The Company increases or decreases the reserve by the gross profit on the estimated out-of-period returns based on the calculated amount of gross margin with an offsetting credit or debit to
sales. The Company complies with the requirements of ASC 605 when recording actual returns, however the application of period end adjustments to the estimated sales return reserve does not strictly comply with the standard in that the Company
records the net gross profit amount of the increase or decrease of the estimated reserve as an adjustment to sales instead of adjusting the corresponding gross sales and cost of goods sold estimates to the respective income statement line items. The
strict application of ASC 605 to the Company’s sales return reserve would not materially affect the financial position or results of the Company’s operations and as such we believe the provisions of the standard need not be applied to its
sales return reserve due to the immaterial impact.

 The Commission has asked to see how the Company’s sales and cost of goods sold
would have changed for the historical periods presented if the Company had strictly applied the preceding guidance. Below, in tabular form, the effect of the application of ASC 605 is presented detailing the impact on the Company’s sales, cost
of goods sold and gross profit for the historical periods presented in the Company’s 2009 Form 10-K. This presentation reflects the impact as if the Company had adjusted sales and cost of sales for the gross amounts of the changes in reserve
estimates to sales and cost of goods sold, and, as such, the application of ASC 605 does not impact the total amount presented for gross profit.

2009

2008

2007

(in thousands)

$

% of Sales

$

% of Sales

$

% of Sales

 As Reported

 Sales

4,847,062

100.00
%

3,576,553

100.00
%

2,522,319

100.00
%

 Cost of Goods Sold

2,520,534

52.00
%

1,948,627

54.48
%

1,401,859

55.58
%

 Gross Profit

2,326,528

48.00
%

1,627,926

45.52
%

1,120,460

44.42
%

 Application of ASC 605

 Sales

4,845,066

99.96
%

3,576,090

99.99
%

2,521,424

99.96
%

 Cost of Goods Sold

2,518,538

51.96
%

1,948,164

54.47
%

1,400,964

55.54
%

 Gross Profit

2,326,528

48.00
%

1,627,926

45.52
%

1,120,460

44.42
%

 Difference

 Sales

1,996

0.04
%

463

0.01
%

895

0.04
%

 Cost of Goods Sold

1,996

0.04
%

463

0.01
%

895

0.04
%

 Gross Profit

—

0.00
%

—

0.00
%

0

0.00
%

 2

 H. Christopher Owings

Assistant Director,

 U.S. Securities and
Exchange Commission

 July 1, 2010

 As illustrated in the table, the effect the application of ASC 605 would have had on the
Company’s financial statements is immaterial. In future periods, the Company will continue to analyze the effect of sales returns on its financial position and results of operations and will apply the provisions of the standard to the extent
that it is material to the Company’s financial statements.

 Note 2 – Business Combination, page 53

2.
We have reviewed your response to prior comment six in our letter dated April 9, 2010. Please provide us with further information regarding your valuation of the
acquired CSK inventories. Since paragraph 37(c.)(1) of SFAS 141 requires the recording of finished goods inventory acquired in business combinations at estimated selling price less the sum of costs disposal and a reasonable profit allowance for your
selling efforts, please provide us with a table that summarizes these amounts. Tell us the nature and estimated amounts of the items you included in costs of disposal and, in doing so, differentiate the amounts estimated for direct vs. indirect
costs. Please also explain why you believe that the amount of the profit you expected to earn for the selling effort was reasonable.

Response:

 Please see
the attached Appendix A, which includes two tables that demonstrate the calculation of the estimated value of inventory acquired in accordance with paragraph 37(c.)(1) of SFAS 141.

The Company, in its evaluation of estimated selling price for inventory with sufficient sales volume to indicate an active market for the products,
relied heavily on CSK’s historical selling price. However, for a small subset of inventory which was outside of the core “hard-parts” inventory assortment found in a typical auto parts store and which had limited sales movement, the
Company planned to initiate a close out sale for these products by deeply discounting the selling prices. To estimate the selling price of this close out inventory, the Company relied on its previous retail experience in pricing and subsequently
liquidating closeout products.

 The acquisition of CSK, which operated 1,340 stores, was a substantial acquisition for the Company
which operated 1,918 stores prior to the July 11, 2008, acquisition. Due to the size of CSK, our detailed integration plans called for a two-and-a-half year process to fully convert all of the CSK stores to the O’Reilly systems. During the
implementation of the integration plan, CSK’s support structure remained intact in order to support the operation of the unconverted stores. Because the legacy CSK structure would remain in place for the period of time during which the acquired
inventory would be sold, the Company determined that the disposal costs, both direct and indirect, should be based on CSK’s historical costs. Additionally, certain CSK store inventories were removed from

 3

 H. Christopher Owings

Assistant Director,

 U.S. Securities and
Exchange Commission

 July 1, 2010

existing stores and redistributed through other distribution centers to facilitate the liquidation of these products. This redistribution of products throughout CSK’s distribution system
resulted in additional disposal costs of $10.8 million.

 As a result of the Company continuing to operate the CSK stores utilizing
their legacy support structure, in estimating reasonable profit allowance for the effort of selling the inventory, we used CSK’s historical operating profit margin. CSK’s historic profit margin was extracted from the four publicly reported
quarters prior to the acquisition excluding costs of their ongoing SEC and DOJ investigations and associated settlement. This operating profit margin of 2.9% was significantly below O’Reilly’s operating profit margin of 11.8% for the
comparable period, but is reflective of the expected operating results in the acquired CSK stores during the period over which the inventory on hand at the acquisition date was expected to be sold. For close out inventory, we used an even lower
profit margin of 0.6% to reflect the distressed nature of this inventory.

3.
We have reviewed your response to prior comment seven in our letter dated April 9, 2010. Please tell us in detail how you estimated the costs of future legal costs
relating to the SEC and DOJ investigations of CSK as of the date of the final purchase price allocation, why you believe that amount is reasonable, and why you believe the $20.7 million accrual at year is reasonable. Your current response citing
consultations with outside legal counsel and stating that you believe your estimates are reasonable is insufficient in this regard.

Response:

 Estimating
costs for future legal costs was a function of understanding the various claims and potential claims against the former CSK officers, directors and employees that are subject to various inquiries and proceedings as well as the obligations of CSK in
funding legal costs associated with same. O’Reilly determined its estimate for future legal costs by following a detailed process and making adjustments as the process outlined below continued subsequent to the final purchase price allocation
of CSK. This process included (i) understanding the scope of governmental investigations at the time of the acquisition of CSK, (ii) understanding the number of outside defense lawyers involved and their activities that gave rise to
historical billings, (iii) understanding the likely or possible course of action by the SEC and the DOJ given the status of the claims and historical practices of both agencies, (iv) estimating the costs associated with those actions based
upon the estimated time involved for the legal process in general and the scope of the work that would be required, and (v) performing a review of insurance coverage. The foregoing process involved discussions with the lawyers involved,
including those previously retained by CSK to represent the company, additional counsel retained to represent CSK’s Special Investigation Committee, counsel for individuals with whom undertakings had been entered, O’Reilly outside counsel,
which is a national firm having extensive resources and experience with these types of matters, and an internal review of

 4

 H. Christopher Owings

Assistant Director,

 U.S. Securities and
Exchange Commission

 July 1, 2010

privileged materials not available to O’Reilly prior to closing including historical billings from the involved firms prior to the closing. The process also involved participation by and
judgment being exercised by O’Reilly’s General Counsel who has been involved in complex litigation while in private practice and litigation management in corporate practice over a combined period of 19 years.

When estimating amounts, we believe that by reviewing the type of claim or proceeding, scope of work traditionally anticipated and hourly rates for
the requisite resources, as well as historical billings of the firms involved in the process prior to the closing, the Company was able to inform itself in a manner sufficient to form a reasonable estimate of future costs. The Company believes the
estimate as of the date of the final purchase price allocation and the estimate at year-end are reasonable because these estimates resulted from the detailed process outlined above on each of the various claims and potential claims and then
aggregating the estimates for each such claim and potential claim.

 The Company acknowledges that it is responsible for
the adequacy and accuracy of the disclosures in the filing, that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings, and that the Company may not
assert staff comments as a defense in any proceedings initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is fully responsive to the comment letter. Please direct any further questions or comments to the
undersigned.

 Very truly yours,

O’REILLY AUTOMOTIVE, INC.

 Thomas McFall

 Executive Vice President / Chief Financial Officer

Direct Line: (417) 874-7162

 TF:bjw

 5

 APPENDIX A

Table 1: Summary of Valuation of Acquired Inventory (dollars in millions)

Historical Selling
Price Inventory

Closeout
Inventory

Total Inventory

$

% of
Sales

$

% of
Sales

$

% of
Sales

 Selling Price

1,003.5

100.0
%

21.2

100.0
%

1,024.7

100.0
%

 Less: Disposal Costs

453.4

45.2
%

2.3

10.8
%

455.7

44.5
%

 Less: Reasonable Profit Allowance

29.1

2.9
%

0.1

0.5
%

29.2

2.8
%

 Fair Value of Inventory

521.0

51.9
%

18.8

88.7
%

539.8

52.7
%

 Last Buy Value of Acquired Inventory

531.9

34.8

566.7

 Change in Cost

(10.9
)

(16.0
)

(26.9
)

 Table 2: Summary of Disposal Costs (dollars in millions)

Historical
Selling Price
Inventory

Closeout
Inventory

Total Inventory

$

% of
Sales

$

% of
Sales

$

% of
Sales

 Store Expenses

365.3

36.4
%

2.3

10.8
%

367.6

35.9
%

 Advertising Expenses

26.1

2.6
%

—

26.1

2.5
%

 Indirect Costs

51.2

5.1
%

—

51.2

5.0
%

 Additional Distribution Costs

10.8

1.1
%

—

10.8

1.1
%

 Total Disposal Costs

453.4

45.2
%

2.3

10.8
%

455.7

44.5
%

 6

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

June 18, 2010
  Mr. Greg Henslee  Chief Executive Officer and Co-President  O’Reilly Automotive, Inc.  233 South Patterson  Springfield, Missouri 65802
Re:  O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2009
Filed February 26, 2010
Definitive Proxy Statement on Schedule 14A
Filed March 19, 2010
File No. 000-21318

Dear Mr. Henslee:

We have reviewed the responses in your letter filed on April 22, 2010 and have the
following additional comments.
 Please respond to this letter within ten business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing the information you provide in response to these comments, we may
have additional comments.

Form 10-K for the Fiscal Year Ended December 31, 2009

 Note 1 – Summary of Significant Accounting Policies, page 48

Revenue Recognition, page 48

1. We have reviewed your response to prior comment four in our letter dated April 9, 2010, noting that your estimated return liability is recorded at period end as a reduction of sales.  Please tell us how your accounting treatment complies with FASB ASC 605-15-45-1, which indicates that revenues and costs of sales reported in the income statements should be reduced to reflect estimated returns.  Please also tell us how your sales and cost of goods sold would have changed for the historical periods presented had you applied the preceding guidance.

Mr. Greg Henslee
O’Reilly Automotive, Inc.
June 18, 2010
Page 2

Note 2 – Business Combination, page 53
 2. We have reviewed your response to prior comment six in our letter dated April 9, 2010.  Please provide us with further information regarding your valuation of the acquired CSK inventories.  Since paragraph 37(c.)(1) of SFAS 141 requires the recording of finished
goods inventory acquired in business combinations at estimated selling price less the sum of costs of disposal and a reasonable profit allowance for your selling efforts, please provide us with a table that summarizes these amounts.  Tell us the nature and estimated amounts of the items you included in costs of disposal and, in doing so, differentiate the amounts estimated for direct vs. indirect cost s.  Please also explain why you believe that
the amount of the profit you expected to earn for the selling effort was reasonable.
 3. We have reviewed your response to prior comment seven in our letter dated April 9, 2010.  Please tell us in detail how you estimated the costs of future legal costs relating to the SEC and DOJ investigations of CSK as of the date of the final purchase price allocation, why you believe that amount is reasonable
, and why you believe the $20.7
million accrual at year is reasonable.  Your current response citing consultations with outside legal counsel and stating that you believe your estimates are reasonable is insufficient in this regard.
 You may contact Yong Kim at (202) 551-3323 or Andrew Blume at (202) 551-3254 if you have questions regarding comments on the financial statements and related matters.  Please contact Catherine Brown at (202) 551-3513 or me at (202) 551-3720 with any other questions you may have.

Sincerely,     H. Christopher Owings
         A s s i s t a n t  D i r e c t o r

CORRESP
1
filename1.htm

Correspondence

 April 22, 2010

VIA OVERNIGHT MAIL AND EDGAR

 Securities
and Exchange Commission

 Division of Corporate Finance

100 F Street, NE

 Washington, DC 20549

 Attn:

 H. Christopher Owings

Assistant Director

 RE:

O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2009

Filed February 26, 2010

Definitive Proxy Statement on Schedule 14A

Filed March 19, 2010

File No. 000-21318

 Dear Mr. Owings:

 We are writing in response to the comments contained in a letter from you dated April 9, 2010 to O’Reilly
Automotive, Inc., with respect to our Form 10-K for the Fiscal Year Ended December 31, 2009 and our Schedule 14A Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. For your convenience, we have set forth the
comments contained in the comment letter along with our responses. All responses in our letter are provided on a supplemental basis and all changes will be made in our future filings.

Form 10-K for the Fiscal Year Ended December 31, 2009

Item 7. Management’s Discussion and Analysis of Financial Condition and . . . page 25

Results of Operations, page 27

 2009 Compared to 2008, page 27

1.
Please expand your disclosure to discuss whether increases in sales are attributable to increases in prices, to increases in the volume or amount of goods or services
being sold, or to the introduction of new products or services. Refer to Item 303(A)(3)(iii) of Regulation S-K.

Response:

 In future
filings, we will expand our disclosure to further discuss the contributing causes of changes in sales. In particular, our disclosure will highlight the impact on our comparable store sales of changes in total transaction (ticket) counts and changes
in average transaction value with corresponding discussion of the factors driving such changes. This manner of analysis and associated terminology is common within our industry and is consistent with public comments we have made on prior earnings
release conference calls. Our proposed revised disclosure is expanded as follows:

 We believe that the increased sales
achieved by our stores are the result of superior inventory availability, a broader selection of products offered in most stores, a targeted promotional and advertising effort through a variety of media and localized promotional events, continued
improvement in the merchandising and store layouts of the stores, compensation programs for all store team members that provide incentives for performance and our continued focus on serving professional installers. The improvement in comparable
store sales was primarily driven by an increase in transaction counts, while the average ticket remained flat with the prior year. The flat average ticket value was attributable to more complex and costly repair parts, consistent with ongoing
industry trends offset by competitive price reductions in the acquired CSK stores and the addition of a wider assortment of entry level products in those stores.

Contractual Obligations, page 35

2.
Please consider revising your contractual obligations table to include estimated interest payments on all of your long-term debt through maturity. Because the table is
aimed at increasing transparency of cash flow, we believe these payments should be included in the table. If you choose not to include these payments due to the variable nature of the interest payments, a footnote to the table should clearly
identify the excluded item(s) and provide any additional information that is material to understanding your cash requirements. For example, consider disclosing the amounts borrowed as of your fiscal year-end, interest rate and maturity terms, and
historical interest expense recognized during the periods presented.

 2

 Response:

The contractual obligations table includes scheduled principal and interest payments on fixed rate long-term debt, the principal balance of our
variable rate asset backed revolving credit facility (“ABL facility”) and obligations under our interest rate swap agreements. However, due to the uncertainty of forecasting expected variable interest rates and expected borrowing levels
under our ABL facility, we are unable to reasonably estimate expected variable rate interest payments on such facility, and this conclusion is stated in the paragraph preceding the contractual obligations table. In response to the Commission’s
request, in future filings, and so long as these uncertainties continue to exist, we will add a footnote to the contractual obligations table reiterating this conclusion. We will also provide additional information in this footnote disclosing
amounts borrowed under the ABL facility, interest rate ranges for the applicable period covered in the filing and historical interest expense relating to the ABL facility for the period. Our proposed footnote to the contractual obligations table is
as follows:

 Due to the uncertainty of future interest rates and the borrowings under our ABL facility, future ABL
interest payments are not included in the above table. At December 31, 2009, we had borrowings of $679 million under our ABL facility with interest rates ranging from 2.50% to 4.50%. At December 31, 2008, we had borrowings of $614 million
under our ABL facility with interest rates ranging from 3.125% to 4.75%. During the years ended December 31, 2009 and 2008, we incurred interest expense of $23 million and $16 million, respectively, as a result of borrowings under our ABL
facility, exclusive of obligations under interest rate swap agreements. See Note 4 “Long-Term Debt” to the consolidated financial statements for further information.

3.
If your operating leases obligate you to pay certain tax, insurance and maintenance expenses, please include a note to the table to specify that the operating lease
obligations figure do not include such items. Provide a context for the reader to understand the impact of these items on your total operating lease obligations.

Response:

 Most of our
operating leases obligate us to pay certain tax, insurance and maintenance expenses. In future filings, we will supplement our disclosure to note this and will provide a context for the reader to understand the impact of these items on our total
operating lease obligations. Our proposed revised disclosure would include the following as a footnote to our contractual obligations table:

The minimum lease payments above do not include certain tax, insurance and maintenance costs, which are also required contractual
obligations under our operating leases but are generally not fixed and can fluctuate from year to year. These expenses historically average approximately 20% of the corresponding lease payments.

 3

 Item 8. Financial Statements and Supplementary Data, page 40

Notes to Consolidated Financial Statements, page 48

Note 1 – Summary of Significant Accounting Policies, page 48

Revenue Recognition, page 48

4.
We note that you record sales net of estimated return allowances. Please clarify whether the reduction in sales is based on the gross profit of the related transactions
or total estimated revenue related to estimated returns with an offsetting credit to cost of sales. Please also clarify why there are no amounts reflected in the deductions column for fiscal years 2007 and 2009 of your Schedule II rollforward.

 Response:

During any given period, we record sales returns as a reduction of sales on a gross basis. At each period end, we record an allowance for sales returns
that is based on the gross profit of the estimated returns subsequent to the end of the period. Our schedule II rollforward reflects adjustments to our estimated sales returns allowances during the periods presented. To the extent that estimates are
lower, we reflect the adjustment in the deductions column. We did not make downward adjustments in the sales returns allowances in 2007 or 2009 because of increases in overall sales volumes in those years which corresponded to increases in our
estimates of returns. The amount reflected in the deductions column in 2008 related to minor refinements in our estimation process that resulted in an immaterial adjustment to the allowance.

Goodwill and Other Intangible Assets, page 49

5.
You disclose that you operated as one reporting unit and test goodwill for impairment at the consolidated level. Please tell us if the executive management team, which
we assume represents your chief operating decision maker function, regularly reviews the performance of individual stores or stores by geographic region. Please explain to us the nature of individual store or regional data, if any, provided in the
review packages provided to your CODM. Please also explain to us how management allocates resources on individual store opening, expansions and closures.

Response:

 We have
determined the CODM for the Company is the senior executive management team comprised of the Chairman of the Board and our two Co-Presidents (the Chief Executive Officer and the Chief Operating Officer.) Our CODM receives regular monthly

 4

reports for review and analysis which contain consolidated financial statements including an income statement by major expense line broken out by store and headquarter expense and a consolidated
balance sheet. These consolidated financial statements focus on current period performance versus the prior year and plan. Additionally, items which make up gross margin are presented at a more detailed, but fully consolidated level to include point
of sale system gross margin and distribution costs that are included in calculating gross margin. The CODM does not regularly receive and review divisional, regional, geographic, individual store or customer type profitability reports.

 In addition to the consolidated financial statements described above, the regular monthly reports presented to the CODM include
consolidated sales information which is broken down by comparable and non-comparable store sales, comparable sales by product line (chassis, brakes, oil, filters etc.), and comparable sales by retail and wholesale customer type. The sales data by
customer type is compiled primarily for external reporting purposes so that we are able to provide descriptive information to stakeholders related to the performance of our business as a whole. Additionally, store level sales information is provided
to the CODM for the best, as well as poorest, performing stores, but not for all individual stores. Generally, all stores have similar characteristics including the nature of the products and services, the type and class of customers and the methods
used to distribute products and provide service to our customers and, as a whole, make up a single operating segment. Other than the sales data described above, discrete financial information, including profitability by geographic region or store,
is not reported or reviewed by the CODM as a part of the regular monthly Company performance package.

 The CODM allocates resources for
new store openings and expansions based on distribution capacity and submarket demographic information. O’Reilly has a model of organic, contiguous growth. This model consists of growing outward from our existing distribution infrastructure and
expanding into new markets which can be reached from an existing distribution center (“DC”). New DCs are opened primarily based on demographic information and proximity to existing DCs. Resources for store and DC expansion are allocated at
the consolidated Company level after an annual review by the CODM of distribution system excess capacity and potential new growth markets based on demographic analysis. Store closures are determined through a review of underperforming stores which
are identified by comparing sales results of peer stores based on age. Traditionally, we have not closed a material number of stores. We attribute this to the significant diligence we place on new store site selection and store openings and a focus
on profitable growth based on the contiguous growth philosophy described above.

 Note 2 – Business Combination, page 53

6.
We note that you made several purchase price allocation adjustments between your preliminary allocation as of December 31, 2008 and the final allocation as of
June 30, 2009. Please note that the allocation period ends when the acquiring entity is no longer waiting for information that it has arranged to obtain and that is known to be available or obtainable. While the purchase price allocation period
usually should not exceed one year, a one-year allocation period cannot be automatically assumed to apply to any business combination.

 5

 Accordingly, please explain in sufficient detail how the final allocation adjustments you
made should be reflected as adjustments to the purchase price rather than as an expense on your statement of operations. In other words, explain what information you were awaiting in order to finalize the purchase price. Also, tell us how you
determined your inventory adjustment was not a post-acquisition period impairment expense.

 Response:

The Company understands that SFAS 141, Business Combinations, regarding the allocation period for purchase price adjustments applies to its acquisition
of CSK Auto Corporation (“CSK”). SFAS 141 defines the allocation period as: “[t]he period that is required to identify and measure the fair value of the assets acquired and the liabilities assumed in a business combination. The
allocation period ends when the acquiring entity is no longer waiting for information that it has arranged to obtain and that is known to be available or obtainable. … Although the time required will vary with circumstances, the allocation
period should usually not exceed one year from the consummation of a business combination.” The Company closed its acquisition of CSK on July 11, 2008. The final purchase price adjustments made for this acquisition were recorded on
June 30, 2009, within the one-year period allowed in SFAS 141.

 The provisions of FAS 141 acknowledge that the time necessary to
obtain additional information related to estimating the fair values of the acquired assets and assumed liabilities for a given acquisition will vary with circumstances. The acquisition of a company of the size and complexity of CSK was an
undertaking unprecedented in the history of our Company. At the date of acquisition, CSK’s store base was 72% of the size of our existing store base. While the Company obtained meaningful information in the due diligence process prior to the
acquisition, the company’s access to certain data, including individual store and product information, was restricted because of legal and competitive considerations, including concerns that sharing of certain data would create antitrust
conflicts. As such, the accumulation and evaluation of the information necessary to reasonably estimate the fair values of assets acquired and liabilities assumed and to quantify pre-acquisition contingencies required significant internal and
external resources. The following provides the details you have requested for the primary items where we were waiting on information and subsequently made adjustments in the final purchase price allocation.

Pre-Acquisition Litigation Matters

In part, the intent of the allocation period following a business combination is to allow adequate time for discovering and quantifying pre-acquisition
contingencies. While the Company was able to complete meaningful due diligence of CSK prior to the closing of the acquisition on July 11, 2008, in order to protect CSK’s legal positions, CSK had not waived its legal privilege prior to the
closing with respect to the following ongoing CSK legal matters. Accordingly, the Company needed to obtain additional legal information relating to (i) CSK’s ongoing investigations by the SEC and DOJ relating to prior financial
restatements by CSK, (ii) defense of various f

Mail Stop 3561
 April 9, 2010
 Greg Henslee  Chief Executive Officer and Co-President  O’Reilly Automotive, Inc.  233 South Patterson  Springfield, Missouri 65802

Re:  O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2009 Filed February 26, 2010 Definitive Proxy Statement on Schedule 14A  Filed March 19, 2010 File No. 000-21318
  Dear Mr. Henslee:
 We have reviewed your filings and ha ve the following comments.  You should
comply with the comments in all future filings, as applicable.  Please confirm in writing that you will do so and also explain to us in sufficient detail for an understanding of the
disclosure how you intend to comply by providing us with your proposed revisions.  If you disagree, we will consider your explanation as to why our comments are inapplicable
or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.               Please understand that the purpos e of our review process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Greg Henslee
O’Reilly Automotive, Inc.
April 9, 2010 Page 2   Form 10-K for the Fiscal Year Ended December 31, 2009

 Item 7.  Management’s Discussion and Analysis of Financial Condition and …, page 25

 Results of Operations, page 27

 2009 Compared to 2008, page 27

1. Please expand your disclosure to disc uss whether increases in sales are
attributable to increases in prices, to increases in the volume or amount of goods
or services being sold, or to the introduc tion of new products or services.  Refer to
Item 303(A)(3)(iii) of Regulation S-K.
 Contractual Obligations, page 35

2. Please consider revising your contractual obligations ta ble to include estimated
interest payments on all of your long-te rm debt through maturity.  Because the
table is aimed at increasing transparency of cash flow, we believe these payments
should be included in the ta ble.  If you choose not to include these payments due
to the variable nature of  the interest payments, a footnote to the table should
clearly identify the excluded item(s) and provide any additional information that
is material to understanding your cash requirements.  For example, consider
disclosing the amounts borrowed as of your  fiscal year-end, interest rate and
maturity terms, and historical intere st expense recognized during the periods
presented.

3. If your operating leases obligate you to pay certain tax, insurance and
maintenance expenses, please include a note to the table to specify that the operating lease obligations figure do not incl ude such items.  Provide a context for
the reader to understand th e impact of these items on your total operating lease
obligations.
 Item 8. Financial Statements and Supplementary Data, page 40

 Notes to Consolidated Financial Statements, page 48

 Note 1 – Summary of Significan t Accounting Policies, page 48

 Revenue Recognition, page 48

4. We note that you record sales net of estim ated return allowan ces.  Please clarify
whether the reduction in sales is base d on the gross profit of the related
transactions or total estimated revenue related to estimated returns with an

Greg Henslee
O’Reilly Automotive, Inc.
April 9, 2010 Page 3
offsetting credit to cost of sales.  Pl ease also clarify why there are no amounts
reflected in the deductions column for fiscal years 2007 and 2009 of your
Schedule II rollforward.
 Goodwill and Other Intangible Assets, page 49

5. You disclose that you operate as one reporting unit and test goodwill for
impairment at the consolidat ed level.  Please tell us if the executive management
team, which we assume represents your  chief operating decision maker function,
regularly reviews the perfor mance of individual stores  or stores by geographic
region.  Please explain to us the nature of  individual store or regional data, if any,
provided in the review packages provided to your CODM.  Please also explain to
us how management allocates resources on individual store opening, expansions and closures.
 Note 2 – Business Combination, page 53

6. We note that you made several purchase price allocation adjustments between
your preliminary allocation as of Decembe r 31, 2008 and the final allocation as of
June 30, 2009.  Please note that the allo cation period ends when the acquiring
entity is no longer waiting for information that it has arranged to  obtain and that is
known to be available or obtainable.  Wh ile the purchase price allocation period
usually should not exceed one year, a one-year allocation period cannot be automatically assumed to apply to any business combination.  Accordingly, please explain in sufficient detail how the final allocation adjustments you made should be reflected as adjustments to the purchase price rather than as an expense on your
statement of operations.   In other wo rds, explain what information you were
awaiting in order to finalize the purchase pr ice.  Also, tell us how you determined
your inventory adjustment was not a post- acquisition period impairment expense.

7. We note that you accrued amounts for lega l fees related to the ongoing SEC and
DOJ investigations as part  of your CSK purchase price allocation.  Please address
the following items:

• Tell us how you estimated the costs of futu re legal costs as of the date of the
final purchase price allocation and why you believe that amount is reasonable.
Considering you are able to reasonably es timate associated legal fees related
to the DOJ and SEC matters, explain in further detail why you are not able to
reasonably estimate the costs, or a range of  costs, to resolve these matters.

• Tell us why you believe the $20.7 million re maining accrual at year end is
reasonable.

Greg Henslee
O’Reilly Automotive, Inc.
April 9, 2010 Page 4
8. We note that you recorded goodwill in an amount in excess of the purchase price
of CSK.  Tell us the inte ractive process that  you and the seller went through in
arriving at the purchase price. Please also  explain to us how you determined the
existence and fair value of items, other than goodwill, to which the purchase price
was allocated.  Lastly, please tell us and disclose the business rationale that led
you to pay such a large premium over the fa ir value of the net assets acquired. See
ASC 805-10-50-2.

9. Based on our review of your CSK acquisition Form S-4 and your page 54 disclosures, it appears th at outstanding unexercised CSK stock options, whether
vested or unvested, were automatically c onverted into vested options to acquire
O’Reilly common stock at the acquisiti on date and that other unvested CSK
share-based awards, such as restrict ed stock, were exchanged for O’Reilly
common shares based on the exchange ra tio.  Please confirm that the related
amount included in your purchase price alloca tion represents the fair value of the
replacement stock options and awards net of the portion of the fair value
attributable to future ve sting requirements, if any.  Also tell us how your
treatment complies with ASC 718-20-35-6 which indicates that exchanges of
share options or other equity instruments or changes to their terms in conjunction
with a business combination are modifications.  If you did not recognize
compensation expense related to these ex changes, please confirm that the fair
values of the new awards did not exceed th e fair values of the original awards.

Note 4 – Long-term Debt and Capital Leases, page 58

10. We note you determined that the market ra te of your 6 ¾% Exchangeable Senior
Notes without the conversion feature was 5.93% when applying the guidance of FASB ASC 470.  Please tell us in sufficie nt detail how you deri ved this rate, why
it is less than the stated rate, and why your  retroactive applica tion of this guidance
does not appear to have impacted historical interest expense.  Also, please help us
understand the nature and terms of the em bedded put option discussed at the top
of page 60.  In doing so, contrast it w ith the embedded call option and advise us
the extent to which the fair value of each  option offsets the other at the issuance
date.  We may have further comment.
 Item 12.  Security Ownership of Certain Be neficial Owners and Management …, page 73

11. We note your disclosure that the “i nformation required by Item 201(d) of
Regulation S-K regarding [your] equity co mpensation plans will be included in
the Proxy Statement under the caption “Secu rities Authorized for Issuance Under
Equity Compensation Plans …;” however, we were unable to locate this disclosure in your proxy statement.   Please revise or advise.

Greg Henslee
O’Reilly Automotive, Inc.
April 9, 2010 Page 5   Definitive Proxy Statement on Schedule 14A

 Proposal 1 – Election of  Directors, page 7

12. Your disclosure in the second paragra ph under this heading suggests that you may
have only listed the current directorships of your directors and director nominees.
Item 401(e) of Regulation S-K recently was amended and now requires that you
also disclose directorships held at any time during the past five years.  Please revise your disclosure in the second paragraph to give effect to the recent
amendment to Item 401(e) and, if necessa ry, update the table under his heading to
reflect any directorships held  during the past five year s by each of your directors
and director nominees in any company with a class of securities registered
pursuant to section 12 of the Exchange Act or subject to the requirements of
section 15(d) of the Exchange Act or a ny company registered as an investment
company under the Investment Compa ny Act of 1940, as amended, naming such
company.  Please refer to Part II.B of  Release No. 33-9089 and Item 401(e)(2) of
Regulation S-K.
 Information Concerning Our Bo ard of Directors, page 11

Committees of the Board, page 12

Compensation Committee, page 12

13. We note your disclosure in the second paragraph under this heading that your
compensation committee (1) “has the authority to retain consultants and advisors as it may deem appropriate in its discretion” and (2) “… has engaged outside advisors and consultants in the past and w ill do so in the future in order to achieve
its goal of attracting and retaining executive officers who contribute to the long-
term success of the Company.”  Please not e that Item 407(e)(3) of Regulation S-K
also recently was amended.  Please c onfirm that your compensation committee
did not engage any consultants during your  recently completed fiscal year for
which disclosure under Item 407(e)(3) of Regulation S-K would have been
required.
 Compensation of Executive Officers, page 16

 Change in Control Agreements, page 24

14. While the Commission has not mandated tabular disclosure of potential post-
employment payments, we encourage you to present this information in a tabular format so that investors may assess clearly the amount of compensation to be received under the various scenarios th at would lead to a named executive

Greg Henslee
O’Reilly Automotive, Inc.
April 9, 2010 Page 6
officer’s termination or change in contro l of the company.  Please refer to Section
VI of Securities Act Release 33-8732A.
 Certain Relationships and Re lated Transactions, page 25

15. Please provide the disclosu re required by Item 404(b) of Regulation S-K.

* * * * *

 Please respond to these comments within  10 business days or tell us when you
will provide us with a response.  You may wish  to provide us with marked copies of your
disclosure to expedite our revi ew.  Please furnish a letter th at keys your responses to our
comments and provides any requested inform ation.  Detailed cover letters greatly
facilitate our review.  Please understand th at we may have additional comments after
reviewing your responses to our comments.              We urge all persons who ar e responsible for the accuracy and adequacy of the
disclosure in these filings to  be certain that the filings include all information required
under the Securities Exchange Act of 1934 and that they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclosure in the filings;

• staff comments or changes to disclosu re in response to staff comments do
not foreclose the Commission from ta king any action with respect to the
filings; and

• the company may not assert staff comments as a defense in any
proceeding initiated by the Commissi on or any person under the federal
securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

Greg Henslee
O’Reilly Automotive, Inc.  April 9, 2010 Page 7
You may contact Yong Kim,  Staff Accountant, at (202) 551-3323 or Andrew
Blume, Staff Accountant, at (202) 551-3254 if you have questions regarding comments
on the financial statements and related matters.  Please contact Catherine Brown, Staff Attorney, at (202) 551-3513 or me at (202)  551-3720 with any other questions you may
have.

Sincerely,

H. Christopher Owings  Assistant Director

Mail Stop 3561

April 25, 2008

By U.S. Mail and facsimile to (417) 874-7145

Mr. Thomas McFall
Chief Financial Officer
O’Reilly Automotive, Inc.
P.O. Box 1156
233 South Patterson
Springfield, Missouri 65801

Re: O’Reilly Automotive, Inc.
Form 10-K for Fiscal Year Ended December 31, 2007
Filed March 3, 2008
Definitive Proxy Statement on Schedule 14A
Filed March 24, 2008
File No. 000-21318

Dear Mr. McFall:

We have completed our review of your Fo rm 10-K and related filings and have no
further comments at this time.

Sincerely,

H. Christopher Owings
Assistant Director

CORRESP
1
filename1.htm

April 23, 2008

VIA
EDGAR AND OVERNIGHT MAIL

Securities
and Exchange Commission

100
F Street, NE

Washington
, D.C.  20549

Attn:                    Ronald E. Alper

                                                Division of
Corporate Finance

                                                Re:                               O’Reilly Automotive, Inc.

                                                                                                Form 10-K for the Fiscal Year Ended December 31, 2007

                                                                                                Filed March 3,
2008

                                                                                                Definitive Proxy Statement on Schedule 14A

                                                                                                Filed March 24, 2008

                                                                                                File No. 0-21318

Ladies
and Gentlemen:

We are writing in response to the comments contained
in a letter from the staff of the Securities and Exchange Commission dated April 9,
2008 to O’Reilly Automotive, Inc., with respect to our Form 10-K for
Fiscal Year Ended December 31, 2007 and our Definitive Proxy Statement on
Schedule 14A.  For the convenience of the
staff, we have set forth the comments contained in the comment letter along
with our responses.  All responses in our
letter are provided on a supplemental basis and all changes will be made in our
future filings.

Form 10-K for the Year Ended December 31, 2007

Management’s Discussion and Analysis of Financial Condition
and Results of Operations, page 21 (Annual Report to Shareholders)

1.                                       Please include an overview that discusses the events, trends, and
uncertainties that management views as most critical to the company’s revenues,
financial position, liquidity, plan of operations and results of
operations.  In an effort to assist you
in this regard, please refer to the Commission Guidance Regarding Management’s
Discussion and Analysis of Financial Condition and Results of Operations,
Release Nos. 33-8350 (December 19, 2003) at
http://www.sec.gov/rules/interp/33-8350.htm.
This guidance is intended to elicit more meaningful disclosure in
MD&A in a number of areas, including the overall presentation and focus of
MD&A, with

Securities and Exchange Commission

April 23, 2008

Page 2

general emphasis on the discussion and analysis of
known trends, demands, commitments, events and uncertainties, and specific
guidance on disclosures about liquidity, capital resources and critical
accounting.

Response:

In
future filings, we will include in MD&A an overview that discusses the
events, trends, and uncertainties that we view as most critical to the
company’s revenues, financial position, liquidity, plan of operations and
results of operations.  Our proposed
revised disclosure is as follows:

OVERVIEW

We
are one of the largest specialty retailers of automotive aftermarket parts,
tools, supplies, equipment and accessories in the United States, selling our
products to both do-it-yourself (DIY) customers and professional
installers.  Our stores carry an
extensive product line consisting of new and remanufactured automotive hard
parts, maintenance items and accessories and a complete line of auto body paint
and related materials, automotive tools and professional installer service
equipment.

We
view the following factors to be the key drivers of current and future demand
for the products that we sell:

Number
of miles driven and number of vehicles — the total number of miles driven in
the US heavily influences the demand for the repair and maintenance products
that we sell.  The long-term trend in the
number of vehicles on the road and the total miles driven in the U.S. has
exhibited robust growth over the prior 10 years.  Since 1998, the total number of miles driven
in the United States has increased at an annual rate of approximately
1.6%.  The total number of vehicles on
the road has increased from 191 million registered light vehicles in 1998 to
237 million in 2007.  Total number of
miles driven remained relatively unchanged in 2006 and 2007 as many consumers
responded to rising fuel prices and other economic constraints in part by
curtailing automobile usage.  We believe
that the long-term trend in miles driven will resemble historical growth rates
primarily because of the increasing number of vehicles on the road.

Average
vehicle age — changes in the average age of vehicles on the road impacts demand
for automotive aftermarket products.  As
the average age of a vehicle increases, the vehicle goes through more routine
maintenance cycles requiring replacement parts such as brakes, belts, hoses, batteries,
and filters.  The sale of these products
is a key component of our business.  The
average age of the vehicle population has increased over the past decade from 8.9
years for passenger cars and 8.3 years for light trucks in 1998 to 10.1 and 8.8

Securities and Exchange Commission

April 23, 2008

Page 3

years,
respectively, in 2007.  We expect that
consumers will continue to choose to keep their vehicles longer and drive them
at higher mileages and that the increasing trend in average vehicle age will
continue.

Unperformed
maintenance — according to estimates compiled by the Automotive Aftermarket
Industry Association, the annual amount of unperformed or underperformed
maintenance in the United States totaled $60 billion for 2007.  This metric represents the degree to which
routine vehicle maintenance recommended by the manufacturer is not being
performed.  Consumer decisions to avoid
or defer maintenance affect demand for our products and the total amount of
unperformed maintenance represents potential future demand.  We believe that challenging macroeconomic
conditions in 2006 and 2007 contributed to an increase in unperformed
maintenance.

Product
quality differentiation — we provide our customers with an assortment of
products that are differentiated by quality for most of the products that we
sell.  For many of our product offerings,
this quality differentiation reflects “good”, “better”, and “best” alternatives.  Our sales and total gross margin dollars are
highest for the “best” category of products.
Consumers’ willingness to select products at a higher point on the value
spectrum is a driver of demand and profitability in our industry.  We believe that the average consumer’s
tendency has been to “trade-down” to lower quality products during recent
challenging economic conditions.  We have
ongoing initiatives targeted to marketing higher quality products to our customers
and expect our customers to be more willing to purchase up on the value
spectrum in the future.

We
recorded net sales of $2.52 billion for the year ended December 31, 2007,
an increase of 10.5% compared to $2.28 billion in 2006.  We recorded diluted earnings per common share
of $1.67 for the year ended December 31, 2007 compared to $1.55 in
2006.  Our 2006 and 2007 results are
below historical levels of growth and reflect the impact that challenging
macroeconomic conditions had on our consumers and the specific drivers of our
business as discussed above.  We believe
that consumers are facing constraints on their discretionary income as a result
of increased interest rates, higher energy costs and general economic
conditions.  While the current economic
conditions have affected our short-term results, we believe that the impact of
current economic conditions on consumer demand is not permanent, and we remain
confident that the long-term drivers of demand in the automotive aftermarket
business are positive.

Our
strategy continues to be to expand market share in existing markets and
aggressively grow our existing store base.
We feel that our dual market strategy of targeting both the
do-it-yourself retail customer and commercial installer positions the company
extremely well to take advantage of growth in the

Securities and Exchange Commission

April 23, 2008

Page 4

automotive
aftermarket business.  We continue to
remain focused on profitable expansion of our store base through entry into
geographic regions contiguous to our existing markets, incremental store growth
in compelling markets within our current regions and selective
acquisitions.  We believe our investment
in store growth will be funded with the significant cash flows generated by our
existing operations and through available borrowings under our credit facility.

Definitive Proxy on Schedule 14A

Compensation of Executive Officers, page 10

Compensation Discussion and Analysis, page 10

Overview of Our Compensation Programs, page 10

2.                                       You indicate that your human resources department provides the
compensation committee with industry benchmark information.  Please clarify how this information is used
in making compensation decisions.  If you
benchmark compensation, you are required to identify the companies that
comprise the benchmark group.  If you
have benchmarked different elements of your compensation against different
benchmarking groups, please identify the companies that comprise each
group.  This disclosure should include a
discussion of where actual payments fall within targeted parameters.  To the extent actual compensation was outside
a targeted percentile range, include an explanation of the reasons for
this.  See Item 402(b)(2)(xiv) of Regulation
S-K.

Response:

The Committee uses the industry benchmark information compiled by the
human resources department as a context in reviewing the overall compensation
levels and maintaining a reasonable and competitive compensation program.  The Committee does not use this data to set
specific compensation targets or parameters for any of the different elements
of compensation for a position.  Rather,
the Committee evaluates the overall performance of the Company and the
individual performance of management to set compensation at reasonable and
competitive levels.  In future filings,
we will supplement our disclosure to describe the Committee’s use of benchmark
information in making compensation decisions and list the specific companies
that comprise the peer group.  Our
proposed revised disclosure is as follows:

Overview of
Our Compensation Programs

The
key elements of the compensation packages for our executive officers are base
salary, annual cash bonuses and long-term, stock-based incentives.  In determining the composition of elements in
each compensation package, the Compensation Committee looks to create a
balanced reward, utilizing both market-driven influences and external
compensation benchmarks as well as

Securities and Exchange Commission

April 23, 2008

Page 5

current cash considerations.
To ensure that the Company thrives in the competitive working environment, the
Compensation Committee consults industry resources, references and benchmarks
to determine competitive market ranges and reasonable levels of compensation.

In
reviewing the compensation packages of each of our executives and senior
management, the Compensation Committee tallies the corresponding dollar value
of each element of an individuals compensation, including salary, bonus,
accumulated realized and unrealized stock option gains, the dollar value to
such individual and cost to the company of all perquisites and other personal
benefits, the earnings and accumulated payout obligations under the company’s
non-qualified deferred compensation program and under several potential
severance and change in control scenarios. For new appointments to executive
management, the Company’s management presents compensation recommendations to
the Committee for consideration.

The
Company’s Human Resources department provides the Committee with industry
benchmark information and compensation survey data.   The Committee considers the Company’s
relative performance compared with an established group of peer companies in
the automotive aftermarket industry.  The
companies comprising our 2007 peer group are: AutoZone, Advance Auto Parts,
Genuine Parts, CSK Auto, and The Pep Boys.
The Committee also considers broad-based survey data compiled by Mellon
Consultants of total compensation for top management at companies with total
revenues comparable to the total revenues of the Company.  The Committee uses the industry and market
survey data as a context in reviewing the overall compensation levels and
maintaining a reasonable and competitive compensation program.  The Committee does not use this data to set
specific compensation targets for a position.
Rather, the Committee evaluates the overall performance of the Company
and the individual performance of management to set compensation at reasonable
and competitive levels.

Bonuses, page 10; Long-Term, Stock-Based Incentives, page 11

3.                                      You refer to targets and performance goals.  You have not provided quantitative disclosure
of all of the terms of the necessary targets to be achieved for your executive
officers to earn their annual bonuses and long-term stock-based incentives.  Please disclose the specific performance
targets used to determine incentive amounts or provide a supplemental analysis
as to why it is appropriate to omit these targets pursuant to Instruction 4 to
Item 402(b) of Regulation S-K.  If
part of the compensation is based upon qualitative performance factors, please
note that qualitative goals generally need to be presented to conform to the
requirements of Item 402(b)(2)(v).  To
the extent that it is appropriate to omit specific targets, please provide the
disclosure pursuant to Instruction 4 to Item 402(b) of Regulation

Securities and Exchange Commission

April 23, 2008

Page 6

S-K.  General
statements regarding the level of difficulty, or ease, associated with
achieving performance goals either corporately or individually are not
sufficient.  In discussing how likely it
will be for the company to achieve the target levels or other factors, provide
as much detail as necessary without providing information that poses a
reasonable risk of competitive harm.

Response:

Our
long-term, stock-based incentives are awarded by the Compensation Committee to the Chairman of the Board, Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer annually on
a discretionary basis and are not determined based upon pre-established
quantitative or qualitative targets or performance goals.  The Committee determines the awards in
conjunction with annual performance reviews based upon an assessment of the
responsibilities and seniority of each executive and other factors it deems
appropriate.  In regard to our bonus
plan, we have noted your comment and propose the revised disclosure below:

Bonuses

The Compensation Committee
has established a bonus plan for our Chairman of the Board, Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer based upon certain
objective performance goals. Upon achievement of such performance goals, these
executive officers receive a bonus based upon a percentage of their respective
base salaries for the attainment of a defined performance goal. The
Compensation Committee has designed these performance goals to address multiple
facets of financial performance, including sales performance, operating income
performance, financial returns and various balance sheet measures. Our actual
performance in each of these areas is compared to the targets pre-determined by
the Committee, in order to determine the bonus amount achieved by each
executive officer. The targets are determined by reviewing the performance of industry
peers and other comparable companies, our historical performance and trends in
the automotive aftermarket and retail industry.
Targets are set forth in ra

Mail Stop 3561

        A p r i l  9 ,  2 0 0 8

By U.S. Mail and facsimile to 417-829-5861

Mr. Gregory L. Henslee
Chief Executive Officer and Co-President
O’Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802

Re: O’Reilly Automotive, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2007
Filed March 3, 2008
Definitive Proxy Statement on Schedule 14A
Filed March 24, 2008
 File No. 000-21318

Dear Mr. Henslee:

We have reviewed your filings and have the following comments.  Please provide
a written response to our comments.  Pleas e be as detailed as  necessary in your
explanation.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.  After reviewing this information, we may
raise additional comments.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filings.  We look forward to working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

In some comments we have asked you to provide us with additional information
so we may better understand your disclosure.  Pl ease do so within the time frame set forth
below.  You should comply with the remain ing comments in all future filings, as
applicable.  Please confirm in writing that you will do so and also explain to us in

Mr. Gregory L. Henslee
O’Reilly Automotive, Inc.
April 9, 2008 Page 2
sufficient detail how you intend to comply by pr oviding us with your proposed revisions.
Please understand that after our review of all of your responses, we may raise additional
comments.

If you disagree with any of these comments , we will consider your explanation as
to why our comment is inapplicable or a revisi on is unnecessary.  Please be as detailed as
necessary in your explanation.

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 18 (Annual Report to Shareholders)
1. Please include an overview that discusses the events, trends, and uncertainties that
management views as most critical to the company’s revenues, financial position,
liquidity, plan of operations and results of operations.  In an effort to assist you in
this regard, please refer to the Comm ission Guidance Regarding Management’s
Discussion and Analysis of Financial Condition and Results of Operations,
Release Nos. 33-8350 (December 19, 2003) at
http://www.sec.gov/rule s/interp/33-8350.htm.    This guidance is intended to elicit
more meaningful disclosure in MD&A in a number of areas, including the overall
presentation and focus of MD&A, with general emphasis on the discussion and analysis of known trends, demands, commit ments, events and uncertainties, and
specific guidance on disclosures about liq uidity, capital resources and critical
accounting.

Definitive Proxy on Schedule 14A

Compensation of Executive Officers, page 10

Compensation Discussion and Analysis, page 10

Overview of Our Compensation Programs, page 10
2. You indicate that your human resources department provides the compensation committee with industry benchmark info rmation.  Please clarify how this
information is used in making comp ensation decisions.  If you benchmark
compensation, you are required to identif y the companies that comprise the
benchmark group.  If you have benchmarked different elements of your compensation against different benc hmarking groups, please identify the
companies that comprise each group.  This disclosure should include a discussion of where actual payments fall within target ed parameters.  To the extent actual
compensation was outside a targeted per centile range, include an explanation of
the reasons for this.  See Item 402(b)(2)(xiv) of Regulation S-K.

Mr. Gregory L. Henslee
O’Reilly Automotive, Inc.
April 9, 2008 Page 3
Bonuses, page 10; Long-Term, Stock-Based Incentives, page 11
3. You refer to targets and performance goals .  You have not provided quantitative
disclosure of all of the terms of the n ecessary targets to be achieved for your
executive officers to earn their annu al bonuses and long-term stock-based
incentives.  Please disclose the specific  performance targets used to determine
incentive amounts or provide a supplemental  analysis as to why it is appropriate
to omit these targets pursuant  to Instruction 4 to Item 402(b) of Regulation S-K.
If part of the compensation is based upon qualitative performance factors, please
note that qualitative goals generally need  to be presented to conform to the
requirements of Item 402(b)(2)(v).  To th e extent that it is appropriate to omit
specific targets, please provide the disclo sure pursuant to Instruction 4 to Item
402(b) of Regulation S-K.  General statemen ts regarding the level of difficulty, or
ease, associated with achieving performance goals either corporately or individually are not sufficient.  In discussing how likely it will be for the company to achieve the target levels or other fact ors, provide as much detail as necessary
without providing information that poses a reasonable risk of competitive harm.
4. You indicate that individual contribution, responsibility and performance is an important factor in determining bonuses to senior management other than the
Chairman of the Board, Chief Executive Office, Chief Operating Officer, and
Chief Financial Officer.  Please discuss how the specific forms of compensation
are structured and implemented to re flect senior manage ment’s individual
performance and/or indivi dual contribution to the company’s performance,
describing the elements of individual pe rformance and/or co ntribution that are
taken into account.  See Item 402(b)(2)(vii) of Regulation S-K.

Signatures, page 20
5. The Form 10-K must also be signed by your controller or principal accounting
officer.  Please tell us if Mr. McFall  signed in that capacity.  See General
Instruction D to Form 10-K.

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.  Please furnish a letter that keys your responses to our
comments and provides any requested information.  Detailed letters greatly facilitate our
review.  Please understand that we may have  additional comments after reviewing your
responses to our comments.

Mr. Gregory L. Henslee
O’Reilly Automotive, Inc.
April 9, 2008 Page 4
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:

• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any act ion with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

Please contact Ronald E. Alper, Staff A ttorney, at (202) 551-3329, or me at (202)
551-3720 with any questions.

Sincerely,

H. Christopher Owings
Assistant Director

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404

       DIVISION OF
CORPORATION FINANCE

      Mail Stop 3561
February 19, 2008
  Mr. Thomas McFall Chief Financial Officer O’Reilly Automotive, Inc. 233 South Patterson Springfield, Missouri 65802
Re: O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2006
Filed March 1, 2007 File No. 0-21318

Dear Mr. McFall:
We have completed our review of your Form 10-K and related filings as of
August 10, 2007 and have no further comments.  Due to administrative oversight, this letter is being sent at this time.
        S i n c e r e l y ,             J a m e s  A l l e g r e t t o          Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

        August
        2, 2007

        Securities and Exchange Commission

        450
        Fifth Street Northwest

        Washington , D.C. 20549

                    Attn:

                    Yong Kim

                    Division of Corporate Finance

                    Re:

                    O’Reilly Automotive, Inc.

                    Form 10-K for the Fiscal Year Ended December 31,
                    2006

                    Filed March 1, 2007

                    File No. 0-21318

        Ladies and
        Gentlemen:

        We are writing in response to the comments contained in a letter from the
        staff of the Securities and Exchange Commission dated July 19, 2007 to O’Reilly
        Automotive, Inc., with respect to our Form 10-K for Fiscal Year Ended December 31, 2006.
        For the convenience of the staff, we have set forth the comments contained in the comment
        letter along with our responses. All responses in our letter are provided on a supplemental
        basis and, as confirmed in our preliminary discussion with the staff, all changes will be
        made in our future filings.

        In addition to the transmission of this letter via EDGAR, we are delivering
        via overnight mail three hard copies of this letter and three copies of the exhibits
        showing our proposed changes to the original disclosure.

        Form 10-K for the Year Ended December 31, 2006

        Schedule II – Valuation and Qualifying Accounts, page
        21

                        1.

                        Please revise this schedule to include the activity in
                        your sales allowances, amounts receivable from vendor reserve and your
                        notes receivable reserve, if any. Alternatively, you may provide such
                        disclosure in the notes to the financial statements. Refer to Rules 5-04
                        and 12-09 of Regulation S-X for guidance.

        Response:

        In future filings, we will revise this schedule to include the activity in
        our sales allowances. The supplemental disclosure for the activity in these allowances is
        reflected in the following table:

        Securities
        and Exchange Commission

        August 2,
        2007

        Page
        2

                    Col. A

                    Col. B

                    Col. C

                    Col. D

                    Col. E

                    Description

                    Balance at Beginning of Period

                    Additions – Charged to Costs and Expenses

                    Additions – Charged to Other Accounts –
                    Describe

                    Deductions – Describe

                    Balance at End of Period

                    (Amounts in thousands)

                    Year ended December 31, 2006:

                    Deducted from asset account:

                    Sales and Returns Allowances

                    $

                    1,176

                    $

                    364

                    $

                    --

                    $

                    --

                    $

                    1,540

                    Year ended December 31, 2005:

                    Deducted from asset account:

                    Sales and Returns Allowances

                    $

                    1,176

                    $

                    --

                    $

                    --

                    $

                    --

                    $

                    1,176

                    Year ended December 31, 2004:

                    Deducted from asset account:

                    Sales and Returns Allowances

                    $

                    1,566

                    $

                    --

                    $

                    --

                    $

                    390

                    (1)

                    $

                    1,176

                    (1) Reduction is the result of enhanced
                    sales return data derived from improved point-of-sale system.

        As discussed
        in greater detail in our responses to comments 8 and 10, we did not record reserves for
        amounts receivable from vendors and notes receivable during the periods reflected in
        Schedule II – Valuation and Qualifying Accounts in our 2006 Form 10-K.

        Exhibit 13.1 - Portions of the 2006 Annual Report to
        Shareholders

        Management’s Discussion and Analysis of Financial Condition and
        Results of Operations, page 29

        Critical Accounting Policies and Estimates, page 30

                        2.

                        Please revise the discussion of your critical accounting
                        policies to include the following:

                        •

                        The specific assumptions and uncertainties underlying
                        your estimates. Explain how the assumptions that you have made compare to
                        other assumptions that could have reasonably been made, under the
                        circumstances, and address the specific uncertainties that are reasonably
                        likely to give rise to material effects in the course of resolution. Please
                        provide information about the quality and potential variability of your
                        earnings and cash flow so that investors may ascertain the extent to which
                        your reported financial information is indicative of your future results.
                        We generally find that disclosures including both sensitivity analyses and
                        discussions of historical experience in making the critical estimates are
                        effective in meeting this management’s discussion and analysis
                        objective. Please refer to the guidance in FRC Section 501.14 if you
                        require further clarification; and

        Securities and Exchange Commission

        August 2, 2007

        Page 3

                        •

                        Please also revise to disclose the estimates,
                        assumptions, and uncertainties related to your accounting for inventory
                        obsolescence and shrink, or tell us why you believe such disclosure is not
                        necessary.

        Please include your proposed revisions with your response.

        Response:

        In future filings, we will revise our critical accounting policies
        discussion to disclose the additional information identified in your comment. Additionally,
        we will supplement our disclosure to include the estimates, assumptions, and uncertainties
        related to our accounting for inventory obsolescence and shrink. Our proposed revised
        disclosure is attached hereto as Exhibit
        1. Please note our response to comment 8 regarding amounts
        receivable from vendors for additional clarification regarding these balances.

        Results of Operations. page 31

        2006 Compared to 2005, page 32

                        3.

                        Please revise your discussion for the
                        following:

                        •

                        When you describe two or more business reasons that
                        contributed to a material change in a financial statement line item between
                        periods, please quantify the extent to which each change contributed to the
                        overall change in that line item. For example, you state that sales
                        increased in 2006 ‘‘primarily due to 170 net additional stores
                        opening during 2006, a full year of sales for stores opened throughout 2005
                        and a 3.3% increase in same-store sales for stores open at least one
                        year.” You further state that “increased sales achieved by
                        existing stores are a result of our offering broader selection of products,
                        increased promotional and advertising efforts, continued improvement in
                        merchandising and store layouts, compensation programs for store team
                        members and continued focus on serving professional installers.” You
                        also discuss factors that negatively impacted sales, such as constraints on
                        customer’s discretionary income. For each item identified, please
                        quantity the amount each change contributed to, or deducted from, the
                        overall change in sales. Additionally, please expand your discussion of
                        each of the significant changes in financial statement line items to
                        indicate whether these changes represent trends expected to continue in the
                        future;

                        •

                        Where you identify intermediate causes of changes in net
                        sales, please expand your discussion to describe the reasons underlying the
                        intermediate causes. For example, where you indicate that gross profit as a
                        percentage of sales increased as a result of improvements in product mix
                        and product acquisition costs, please expand your discussion to describe
                        how you achieved improvements in product mix and products acquisition
                        costs; and

        Securities and Exchange Commission

        August 2, 2007

        Page 4

                        •

                        For line items presented as “net” please
                        include a discussion of all major components within that line item that
                        contributed to material changes. For example, we note that you include not
                        only interest expense, but also interest income and other within your other
                        expense, net line item, yet you attribute the entire change to interest
                        expense only.

        Refer to Item 303(a) of Regulation S-K and SEC Release No. 33-8350.
        Please provide examples of your proposed revisions with your response.

        Response:

        In future filings, we will prepare our disclosure to include the items
        identified in comment 3. Specifically, we will take the following approach with regard to
        each bullet point of comment 3.

        First Bullet:

        In situations where we identify multiple business reasons that contributed
        to a material change in a financial statement line item between periods, we will quantify
        the impact of each identified reason to the extent possible. Additionally, we will
        supplement our disclosure to include discussion of the extent to which significant changes
        in financial statement line items represent known trends that we expect to continue in the
        future. An example of proposed revised disclosure is as follows:

        Sales increased $237.9 million, or 11.6%, from $2.05 billion in 2005 to
        $2.28 billion in 2006. The addition of 170 net new stores opened during 2006 provided $67.4
        million of the increase. A full year of sales for stores opened throughout 2005 contributed
        an additional $76.1 million of the increase. Finally, a 3.3% increase in same-store sales
        for stores open at least one year added $93.5 million of the increase. We anticipate that
        continued store unit and sales growth consistent with our historical rates will continue in
        the future.

        In some instances, we may identify material changes in certain financial
        statement line items that are caused by business reasons which would be reasonably
        impracticable to quantify. For instance, as noted in comment 3, we disclosed in our 2006
        10-K filing that our comparable store sales increased due to a variety of factors. However,
        while we believe that each of the factors listed in our disclosure had a positive impact on
        our ability to increase sales at existing stores, we do not have systems capable of
        calculating this impact nor would it be feasible to develop such calculations. Likewise, it
        would not be reasonably practicable to identify, and thereby quantify, the specific
        negative impact of the macroeconomic factors that we disclose in our discussion. In
        circumstances where quantification is not possible, we will qualitatively discuss the
        business reasons that impact our financial results.

        Securities and Exchange Commission

        August 2, 2007

        Page 5

        Second Bullet:

        When we identify and discuss intermediate causes that impacted our financial
        results, we will expand our disclosure to include additional analysis of underlying causes.
        Our proposed revision of our disclosure identified in the second bullet of comment 3 is as
        follows:

        Gross profit increased $114.2 million, or 12.8%, from $892.5 million (43.6%
        of sales) in 2005 to $1.01 billion (44.1% of sales) in 2006, due to increased sales. The
        increase in gross profit as a percent of sales is the result of improvements in product mix
        and product acquisition cost. We improved our product mix by implementing strategies to
        differentiate our merchandise selections at each store based on customer demand and vehicle
        demographics in the store’s market and through Team Member training initiatives
        focused on selling products with greater gross margin contribution. Product acquisition
        cost improved due to increased imports from lower cost providers in foreign countries as
        well as improved negotiating leverage with our vendors as a result of our growth. We
        anticipate these trends to continue at a moderate rate through 2007.

        Third bullet:

        We will include discussion of all major components that contributed to
        material changes in all line items that we present as “net.” With respect to
        our “other expenses, net” line item on our income statement, however, the only
        major component that contributed materially to the change in the line item was the
        decreased interest expense noted in our disclosure. While other components did affect the
        line item, none of these individual components contributed materially to the change. In
        future filings, we will discuss the changes in each of the individual components of
        “other expenses, net” to the extent that the applicable change is
        material.

        Financial Statements

        General

                        4.

                        You state on page 6 that that you entered into various
                        programs and arrangements with certain vendors including “pay-on-scan
                        arrangements.” Please tell us the nature and general terms of
                        pay-on-scan arrangements and tell us how you account for them. If you are
                        not obligated to pay for merchandise until sold, please confirm that you
                        account for such merchandise as consignment inventory. Otherwise, please
                        explain.

        Response:

        We are party to various programs and arrangements with certain of our
        vendors, including pay-on-scan arrangements. Pursuant to these agreements, we remit payment
        to vendors on a regular basis after the sale of specific products identified in the

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404

       DIVISION OF
CORPORATION FINANCE

Mail Stop 3561
July 19, 2007

Mr. Thomas McFall
Chief Financial Officer
O’Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802

Re: O’Reilly Automotive, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2006
Filed March 1, 2007
File No. 0-21318

Dear Mr. McFall:

We have reviewed your filing and have the following comments.  We have
limited our review to only your financial statements and related disclosures and do not
intend to expand our review to other portions of your document.  Please provide a written response to our comments.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.  After reviewing this information, we may raise additional comments.

 Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Year Ended December 31, 2006

Mr. Thomas McFall
O’Reilly Automotive, Inc.
July 19, 2007 Page 2

Schedule II – Valuation and Qualifying Accounts, page 21

1. Please revise this schedule to include the activity in your sales allowances, amounts receivable from vendor reserve and your notes receivable reserve, if any.
Alternatively, you may provide such disclosure in the notes to the financial statements.  Refer to Rules 5-04 and 12-09 of Regulation S-X for guidance.

Exhibit 13.1 - Portions of the 2006 Annual Report to Shareholders

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 29

Critical Accounting Policies and Estimates, page 30

2. Please revise the discussion of your critical accounting policies to include the following:

• The specific assumptions and uncertainties underlying your estimates.  Explain how the assumptions that you have made compare to other assumptions that could have reasonably been made, under the circumstances, and address the specific uncertainties that are reasonably likely to give rise to material effects in the course of resolution.  Please provide information about the quality and potential variability of your earnings and cash flow so that investors may ascertain the extent to which your reported financial information is indicative of your future results.  We generally find that disclosures including both sensitivity analyses and discussions of historical experience in making the critical estimates are effective in meeting this management's discussion and analysis objective.  Please refer to the guidance in FRC Section 501.14 if you require further clarification; and

• Please also revise to disclose the estimates, assumptions, and uncertainties related to your accounting for inventory obsolescence and shrink, or tell us why you believe such disclosure is not necessary.

Please include your proposed revisions with your response.

Results of Operations, page 31

Mr. Thomas McFall
O’Reilly Automotive, Inc.
July 19, 2007 Page 3

2006 Compared to 2005, page 32

3. Please revise your discussion for the following:

• When you describe two or more business reasons that contributed to a material change in a financial statement line item between periods, please quantify the extent to which each change contributed to the overall change in that line item.  For example, you state that sales increased in 2006 “primarily due to 170 net additional stores opening during 2006, a full year of sales for stores opened throughout 2005 and a 3.3% increase in same-store sales for stores open at least one year.”  You further state that “increased sales achieved by existing stores are a result of our offering broader selection of products, increased promotional and advertising efforts, continued improvement in merchandising and store layouts, compensation programs for store team members and continued focus on serving professional installers.”  You also discuss factors that negatively impacted sales, such as constraints on customer’s discretionary income.  For each item identified, please quantity the amount each change contributed to, or deducted from, the overall change in sales.  Additionally, please expand your discussion of each of the significant changes in financial statement line items to indicate whether these changes represent trends expected to continue in the future;

• Where you identify intermediate causes of changes in net sales, please expand your discussion to describe the reasons underlying the intermediate causes.  For example, where you indicate that gross profit as a percentage of sales increased as a result of improvements in product mix and product acquisition costs, please expand your discussion to describe how you achieved improvements in product mix and products acquisition costs; and

• For line items presented as “net” please include a discussion of all major components within that line item that contributed to material changes.  For example, we note that you include not only interest expense, but also interest income and other within your other expense, net line item, yet you attribute the entire change to interest expense only.

Refer to Item 303(a) of Regulation S-K and SEC Release No. 33-8350.  Please provide examples of your proposed revisions with your response.

Financial Statements

Mr. Thomas McFall
O’Reilly Automotive, Inc.
July 19, 2007 Page 4

General

4. You state on page 6 that that you entered into various programs and arrangements with certain vendors including “pay-on-scan arrangements.”  Please tell us the nature and general terms of pay-on-scan arrangements and tell us how you account for them.  If you are not obligated to pay for merchandise until sold, please confirm that you account for such merchandise as consignment inventory.  Otherwise, please explain.

5. Please tell us the basis for your conclusion that you have only one reporting segment under the guidance in SFAS 131.  Tell us whether you have concluded that you have one operating segment under paragraph 10 of SFAS 131 or whether you have aggregated multiple operating segments based on criteria in paragraph 17 of SFAS 131.  Please specifically address why you do not believe your retail sales to DIY customers, commercial sales to professional installers and wholesale sales to other retailers (jobber sales) constitute separate reporting segments.  Please include in your response supporting data including, but not limited to, sales and margins for each of these categories.

Consolidated Balance Sheets, page 43

6. Please present goodwill as a separate line item on your balance sheet in accordance with paragraph 43 of SFAS 142.  To the extent you have changes to the carrying value of goodwill, please disclose those changes.  Refer to paragraph 45.c of SFAS 142.

Notes to Consolidated Financial Statements, page 48

Note 1 – Summary of Significant Accounting Policies, page 48

Revenue Recognition, page 48

7. Please tell us why wholesale sales to other retailers (jobber sales) are recorded upon shipment of merchandise, while sales to professional installers (commercial sales) are recorded upon delivery of merchandise.

Amounts Receivable from Vendors, page 49

8. Please explain the circumstances that result in a need to establish a reserve for uncollected amounts receivable from vendors.  Also, please disclose the amount of the reserve.  Refer to Rule 5-02.4 of Regulation S-X.
Property and Equipment, page 49

Mr. Thomas McFall
O’Reilly Automotive, Inc.
July 19, 2007 Page 5

9. Please disclose the estimated useful lives of property and equipment to conform to the categories you present on your balance sheet.  Refer to Rule 5-02.13 of Regulation S-X.

Notes Receivable, page 50

10. Please explain the circumstances that give rise to your notes receivable from vendors.  Tell us how much of the total are due from vendors.  Also, tell us whether any reserves have been recorded for estimates of uncollectible amounts of your total notes receivable.

Exhibit 23.1 – Consent of Ernst & Young LLP, Independent Registered Public
Accounting Firm, page 66

11. In future filings, please have your auditors present their opinion on Schedule II – Valuation and Qualifying Accounts separately from their consent.

Exhibits 31.1 and 31.2, page 67

12. Please revise your future filings so that your certifications read exactly as set forth in Item 601(b)(31) of Regulation S-K.   Specifically, please revise paragraph three
to remove your reference to the “annual report” and refer only to the “report.”  Additionally, please ensure that you also correct your certifications in your Form 10-Q to refer to the “report” instead of “quarterly report.”

*      *      *      *      *

Please respond to these comments within 10 business days or tell us when you
will provide us with a response.  Please furnish a letter that keys your responses to our comments and provides any requested information.  Detailed letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your response to our comments.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings to be certain that the filings include all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision.  Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

Mr. Thomas McFall
O’Reilly Automotive, Inc.
July 19, 2007 Page 6

 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in our review
of your filings or in response to our comments on your filings.

If you have any questions regarding these comments, please direct them to Staff
Accountant Yong Kim at (202) 551-3323 or St aff Accountant Scott Ruggiero at (202)
551-3331.  Any other questions regarding disclosure issues may be directed to me at (202) 551-3716.

         S i n c e r e l y ,

         William Choi
         B r a n c h  C h i e f

CORRESP
1
filename1.htm

February 1, 2006

VIA EDGAR

Mr. William Choi

Accounting Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549

            Re :

            O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2004

Filed March 15, 2005

File No. 0-21318

Dear Mr. Choi,

We have noted your additional comment regarding our response to the comments set forth in your letter dated December 15, 2005 regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004.  This letter provides the response of O’Reilly Automotive, Inc. (the “Company”) to this additional comment.  For your convenience, the response follows the sequentially numbered comment copied in bold from your letter of January 19, 2006.

2004 Annual Report to Shareholders

Leases, page 55

            1.

            We have reviewed your response to comment 3 in our letter dated December 15, 2005.  As previously requested, please provide us with your qualitative and quantitative assessment of materiality for the quarterly periods of fiscal years 2002, 2003, and 2004 that supports your conclusion that the lease error adjustments are not material to your historical quarterly financial statements.  In your response, please provide a table showing the previously reported and “as adjusted” amounts.

Response:

As requested, the Company is providing a table to show the effects on net income and diluted net income per common share of the adjustment for the quarterly periods of fiscal years 2002, 2003, and 2004 as if the adjustment had been retroactively applied rather than recorded in full in the 4th quarter of 2004.  This table supports the Company’s quantitative assessment that the effect of the correction would not be material to any of the Company’s historical quarterly financial statements.

            NI per Common Share -

            Net Income (in millions)

            Assuming Dilution

            If

            Adjustment

            If

            Adjustment

            As

            Retroactively

            as a % of

            As

            Retroactively

            as a % of

            Reported (1)

            Adjusted

            Net Income

            Reported (1)

            Adjusted

            Net Income

            Quarter Ended:

            March 31, 2002

            $                  16.6

            $                  16.4

            (1.2%)

            $                  0.31

            $                  0.31

            --%

            June 30, 2002

            22.6

            22.3

            (1.3%)

            0.42

            0.42

            --%

            September 30, 2002

            24.1

            23.8

            (1.2%)

            0.45

            0.44

            (2.2%

            )

            December 31, 2002

            18.7

            18.4

            (1.6%)

            0.35

            0.34

            (2.9%

            )

            Fiscal Year 2002

            $                  82.0

            $                  80.9

            (1.3%)

            $                  1.53

            $                  1.51

            (1.3%

            )

            Quarter Ended:

            March 31, 2003

            $                  19.7

            $                  19.4

            (1.5%)

            $                  0.37

            $                  0.36

            (2.7%

            )

            June 30, 2003

            26.9

            26.5

            (1.5%)

            0.50

            0.49

            (2.0%

            )

            September 30, 2003

            29.6

            29.3

            (1.0%)

            0.54

            0.53

            (1.9%

            )

            December 31, 2003

            23.9

            23.6

            (1.3%)

            0.43

            0.43

            --%

            Fiscal Year 2003

            $                100.1

            $                  98.8

            (1.3%)

            $                  1.84

            $                  1.81

            (1.6%

            )

            Quarter Ended:

            March 31, 2004 (2)

            $                  49.2

            $                  48.7

            (1.0%)

            $                 0.88

            $                 0.88

            --%

            June 30, 2004

            33.7

            33.2

            (1.5%)

            0.61

            0.60

            (1.6%

            )

            September 30, 2004

            34.7

            34.1

            (1.7%)

            0.62

            0.61

            (1.6%

            )

            December 31, 2004 (3)

            22.0

            27.9

            26.8%

            0.39

            0.50

            28.2%

            Fiscal Year 2004

            $               139.6

            $               143.9

            3.1%

            $                 2.51

            $                 2.58

            2.8%

            (1) In the Company’s 2004 Form 10-K, quarterly results for the first three quarters of 2004 were restated to reflect the change in the

            Company’s method of applying its LIFO accounting policy for inventory costs.  The “As Reported” balances shown above reflect

            the restatement filed with the 2004 Form 10-K.

            (2) The “As Reported” amounts for net income in the first quarter of 2004 include the cumulative effect of accounting change of $21.9

            million, net of tax.  First quarter 2004 income as reported and before the cumulative effect of accounting change totaled $27.3 million.

            Reported diluted net income per common share before the cumulative effect of accounting change totaled $0.49 per share.  If the error

            correction adjustment had been retroactively applied to prior periods, net income before the cumulative effect of the accounting change

            for the first quarter of 2004 would have been $26.8 million or $0.48 per diluted common share.

            (3) The “As Reported” amounts for net income and diluted net income per common share in the fourth quarter of 2004 include the $6.5

            million cumulative adjustment of the error correction.  The “If Retroactively Adjusted” amounts for net income and net income per

            common share for the fourth quarter of 2004 exclude the $6.5 million cumulative adjustment, which represents 29.5% and 30.8% of

            net income as reported and net income per common share as reported, respectively.  The “If Retroactively Adjusted” amounts for the

            fourth quarter of 2004 include an adjustment of $0.6 million that would relate to that period if the error correction adjustment had

            been retroactively applied to all periods.

The Company applied the guidance outlined in paragraph 29 of Accounting Principles Board Opinion 28 (APB 28) in its analysis of the materiality of the adjustment for the error correction in the 4th quarter of 2004.  The $6.5 cumulative adjustment made in the fourth

quarter of 2004 represented 4.7% of net income reported for fiscal year 2004.  In accordance with APB 28, the Company concluded that this adjustment was not material to income of the full year of 2004 or to the Company’s trend of earnings and that the correction of the error should be recorded in the fourth quarter.

As noted in our letter of response filed on December 20, 2005, the Company conducted a qualitative assessment of the materiality of the error correction in accordance with SAB 99 to determine the likelihood that the item would impact the judgment of a reasonable user of the Company’s financial statements.  In conducting this qualitative assessment, the Company considered the impact of the error correction on a reasonable user of any given quarterly or annual financial statement.  The Company’s evaluation indicated that the lease accounting error, due to its relative insignificance during the time period in which the improper accounting was applied, did not mask a change in earnings or trends in earnings for any of the quarterly periods of fiscal years 2002, 2003, and 2004.  The Company also determined that the misstatement did not hide a failure to meet analysts’ expectations for any of the
quarterly periods of fiscal years 2002, 2003, and 2004.  The Company’s review noted that the accounting error would not have affected its compliance with regulatory requirements or loan covenants, nor would it have affected management’s compensation.

The Company also noted that its misapplication of lease accounting and subsequent correction was consistent with practices prevalent among numerous other registrants with operations similar to the Company’s.  While these circumstances certainly did not provide justification for the continued application of the improper lease accounting method, they do indicate that the misstatement did not reflect concealment by management of an unlawful transaction or an intentional effort to manipulate earnings.  In conducting its evaluation, the Company did not anticipate that the market would have a significant adverse reaction to the announcement of the error correction.  Finally, the error correction did not impact the general business trends of the Company, which have been robust, and the Company concluded that the misstatement would not have influenced the judgment of a reasonable person in prior quarterly periods.

If you have any additional questions, please do not hesitate to contact me at 417-874-7165.

Sincerely,

James R. Batten

Executive Vice President of Finance and

Chief Financial Officer

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3561

									January 19, 2006

Mr. Greg Henslee
Chief Executive Officer
O`Reilly Automotive, Inc.
233 South Patterson
Springfield, MO 65802

      Re:	O`Reilly Automotive, Inc.
      Form 10-K for the Fiscal Year Ended December 31, 2004
      Filed March 15, 2005
      File No. 0-21318

Dear Mr. Henslee:

	We have reviewed your response letter filed on December 29,
2005
to our comment letter dated December 15, 2005 and have the
following
comment.  Please provide a written response to our comment.
Please
be as detailed as necessary in your explanation.  In our comment,
we
may ask you to provide us with information so we may better
understand your disclosure.  After reviewing this information, we
may
raise additional comments.

Form 10-K for the Fiscal Year Ended December 31, 2004

2004 Annual Report to Shareholders

Leases, page 55

1. We have reviewed your response to comment 3 in our letter dated
December 15, 2005.  As previously requested, please provide us
with
your qualitative and quantitative assessment of materiality for
the
quarterly periods of fiscal years 2002, 2003, and 2004 that
supports
your conclusion that the lease error adjustments are not material
to
your historical quarterly financial statements.  In your response,
please provide a table showing the previously reported and "as
adjusted" amounts.

      Please respond to this comment within 10 business days or
tell
us when you will provide us with a response.  Please furnish a
letter
that keys your response to our comment and provides any requested
information.  Detailed letters greatly facilitate our review.
Please
understand that we may have additional comments after reviewing
your
response to our comment.

      You may contact Andrew Blume (Staff Accountant) at (202)
551-
3254 or William Thompson (Staff Accountant) at (202) 551-3344 if
you
have questions regarding the comment on the financial statements
and
related matters.  Please contact me at (202) 551-3716 with any
other
questions.

								Sincerely,

									William Choi
									Accounting Branch
Chief

Mr. Greg Henslee
O'Reilly Automotive, Inc.
January 19, 2006
Page 1

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CORRESP
1
filename1.htm

December 29, 2005

VIA FACSIMILE AND EDGAR

Mr. William Choi

Accounting Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549

            Re :

            O’Reilly Automotive, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2004

Filed March 15, 2005

File No. 0-21318

Dear Mr. Choi,

The purpose of this letter is to provide the detailed response of O’Reilly Automotive, Inc. (the “Company”) to the comments set forth in your letter dated December 15, 2005 regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004.  For your convenience, each response follows the sequentially numbered comment copied in bold from your letter of December 15, 2005.

2004 Annual Report to Shareholders

Critical Accounting Policies and Estimates, page 30

            1.

            In future filings, please revise your discussion of critical accounting policies to focus on the assumptions and uncertainties that underlie your critical accounting estimates.  Please also provide an analysis of the sensitivity of reported results to changes in your assumptions, judgments and estimates, including the likelihood of obtaining materially different results if different assumptions were applied.  Please see SEC Release 33-8350.

Response:

In future filings, the Company will expand its disclosure of critical accounting policies to provide additional discussion of the assumptions and uncertainties that underlie the Company’s critical accounting estimates.  In particular, the Company will emphasize that the nature of its assumptions requires judgment regarding uncertain matters and is susceptible to change.  The Company’s disclosure will state that actual results could differ from the Company’s estimates, and that these differences could be material, if the Company were to employ different assumptions.

Financial Statements

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Inventory, page 49

            2.

            We note that your LIFO reserve increased by $13.4 million in 2004 as compared to 2003 and that you reported a negative LIFO reserve at December 31, 2003.  Please explain to us why the use of the LIFO method resulted in a negative LIFO reserve at December 31, 2003.  Please also tell us what factors caused for the increase in the LIFO reserve in 2004.

Response:

The application of the LIFO method resulted in a negative LIFO reserve at December 31, 2003 due to a trend of decreasing prices for merchandise purchases.  The Company has realized this price deflation in product costs over time due to greater purchasing power that has accompanied the Company’s growth. The negative LIFO reserve was the result of the Company’s consistent application of its method of accounting for inventory costs. The Company concluded that inventory at December 31, 2003 was stated at the lower of cost or market, despite the effect of price deflation on the LIFO reserve.  This conclusion is supported by the positive gross margins realized by the Company on all of its product lines.

The increase in the LIFO reserve in 2004 is primarily attributable to the Company’s change in accounting method for inventory costs.  As disclosed in Note 2 to the Consolidated Financial Statements on page 56, the Company, effective January 1, 2004, applied a new method under which inventoried costs include certain procurement, warehousing and distribution center costs in addition to the cost of merchandise purchases.  The Company believes this application is preferable as it better matches revenues and expenses and is the prevalent method used by other entities within the Company’s industry.  Due to the inflationary trend in these additional inventoried costs, which were predominantly comprised of labor and labor-related costs, the LIFO reserve increased substantially upon the change of application of accounting method.

Leases, page 55

            3.

            We note your disclosures on pages 38 and 55 regarding the correction of an error in lease accounting and that the cumulative effect of the error was recorded in the fourth quarter of 2004.  Please tell us when (the date) and how you detected the error.  Please also tell us your basis for recording the cumulative effect of the error in income for the fourth quarter rather than reporting the reporting the error as a prior period adjustment in accordance with paragraph 18 of APB 9.  In particular, please provide us with your

qualitative and quantitative assessment of materiality that these adjustments are not material to your historical financial statements.  In your response, please provide a table showing the previously reported and “as adjusted” amounts.  Refer to SAB Topics 5:F and 1:M.

Response:

In January 2005, the Company initiated a preliminary review of the adequacy of its lease accounting in response to announcements from other public companies that had identified errors in their application of lease accounting and guidance from the SEC issued in a letter from the Chief Accountant of the SEC to the AICPA.  In its February 23, 2005 press release announcing fourth quarter 2004 earnings, the Company indicated that it was reviewing certain lease accounting practices and that it believed that any adjustments determined to be appropriate would be immaterial to its current and prior years’ financial results and condition.  This review was completed and the conclusion as to the necessary error correction was determined on March 11, 2005.  The Company concluded that it was appropriate to record the cumulative effect of the error correction in the fourth quarter of 2004 because the effect of
adjustment would not be material to the current or prior periods.

As requested, the Company is providing a table to show the effects on net income and diluted net income per common share of the adjustment as if it had been retroactively applied to prior periods rather than recorded in full in the 4th quarter of 2004.  This table supports the Company’s quantitative assessment that the effect of the correction would not be material to any of the prior periods presented.

            Net Income (in millions)

            NI per Common Share –

Assuming Dilution

            As Reported

            Adjusted

            Adjustment as a % of Net Income

            As Reported

            Adjusted

            Adjustment as a % of Diluted EPS

            20041

            $139.6

            $143.9

            3.1%

            $2.51

            $2.58

            2.8%

            2003

            100.1

            98.8

            (1.3%)

            1.84

            1.81

            (1.6%)

            2002

            82.0

            80.9

            (1.3%)

            1.53

            1.51

            (1.3%)

            1As reported amounts for net income and diluted net income per common share in 2004 include the $6.5 million cumulative adjustment of the error correction recorded in the 4th quarter of 2004.  The adjusted amounts for net income and net income per common share exclude the $6.5 million cumulative adjustment and include an adjustment of $2.2 million that would relate to 2004 if the adjustment had been retroactively applied to all periods.

An adjustment to shareholders’ equity at January 1, 2002 of $1.9 million would have been made in addition to the adjustments shown in the table above if the Company had retroactively applied the adjustment to prior periods.  This adjustment reflects the cumulative error correction for several periods preceding 2002 and is not material to shareholders’ equity at January 1, 2002.  Furthermore, the portion of the $1.9 million

adjustment attributable to any given period prior to January 1, 2002 is not material to net income or diluted net income per common share for that respective period.

The Company also conducted a qualitative assessment of the materiality of the error correction in accordance with SAB 99 to determine the likelihood that the item would impact the judgment of a reasonable user of the Company’s financial statements.  The Company’s evaluation indicated that the lease accounting error, due to its relative insignificance during the time period in which the improper accounting was applied, did not mask a change in earnings or trends in earnings.  The Company also determined that the misstatement did not hide a failure to meet analysts’ expectations as analysts generally would not have given strong consideration to a “non-cash” adjustment of this magnitude.  The Company’s review noted that the accounting error would not have affected its compliance with regulatory requirements or loan covenants, nor would it have affected management’s compensation.

The Company also noted that its misapplication of lease accounting and subsequent correction was consistent with practices prevalent among numerous other registrants with operations similar to the Company’s.  While these circumstances certainly did not provide justification for the continued application of the improper lease accounting method, they do indicate that the misstatement did not reflect concealment by management of an unlawful transaction or an intentional effort to manipulate earnings.  In conducting its evaluation, the Company did not anticipate that the market would have a significant adverse reaction to the announcement of the error correction.  While the Company acknowledges that the market reaction to the disclosure of a misstatement, when considered in isolation of other factors, is not sufficient evidence to conclude immateriality, the Company believes that the market performance of it
shares subsequent to the announcement of the error correction supports the assessment of immateriality.  Finally, the error correction did not impact the general business trends of the Company, which have been robust, and the Company concluded that the misstatement would not have influenced the judgment of a reasonable person in prior periods.

The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosure in the filing, that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing, and that the Company may not assert staff comments as a defense in any proceedings initiated by the Commission or any person under the federal securities laws of the United States.

If you have any additional questions, please do not hesitate to contact me at 417-874-7165.

Sincerely,

            /s/  James R. Batten

James R. Batten

Executive Vice President of Finance and

Chief Financial Officer

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3561

									December 15, 2005

Mr. Greg Henslee
Chief Executive Officer
O`Reilly Automotive, Inc.
233 South Patterson
Springfield, MO 65802

      Re:	O`Reilly Automotive, Inc.
      Form 10-K for the Fiscal Year Ended December 31, 2004
      Filed March 15, 2005
      File No. 0-21318

Dear Mr. Henslee:

      We have reviewed your filing and have the following
comments.
We have limited our review of your filing to those issues we have
addressed in our comments.  Please provide a written response to
our
comments.  Please be as detailed as necessary in your explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2004

2004 Annual Report to Shareholders

Critical Accounting Policies and Estimates, page 30

1. In future filings, please revise your discussion of critical
accounting policies to focus on the assumptions and uncertainties
that underlie your critical accounting estimates.  Please also
provide an analysis of the sensitivity of reported results to
changes
in your assumptions, judgments and estimates, including the
likelihood of obtaining materially different results if different
assumptions were applied.  Please see SEC Release 33-8350.

Financial Statements

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies

Inventory, page 49

2. We note that your LIFO reserve increased by $13.4 million in
2004
as compared to 2003 and that you reported a negative LIFO reserve
at
December 31, 2003.  Please explain to us why the use of the LIFO
method resulted in a negative LIFO reserve at December 31, 2003.
Please also tell us what factors caused the increase in the LIFO
reserve in 2004.

Leases, page 55

3. We note your disclosures on pages 38 and 55 regarding the
correction of an error in lease accounting and that the cumulative
effect of the error was recorded in the fourth quarter of 2004.
Please tell us when (the date) and how you detected the error.
Please also tell us your basis for recording the cumulative effect
of
the error in income for the fourth quarter rather than reporting
the
error as a prior period adjustment in accordance with paragraph 18
of
APB 9.  In particular, please provide us with your qualitative and
quantitative assessment of materiality for the quarterly and
annual
periods presented which supports your conclusion that these
adjustments are not material to your historical financial
statements.
In your response, please provide a table showing the previously
reported and "as adjusted" amounts.  Refer to SAB Topics 5:F and
1:M.

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments and provides any
requested information.  Detailed letters greatly facilitate our
review.  Please understand that we may have additional comments
after
reviewing your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Andrew Blume (Staff Accountant) at (202)
551-
3254 or William Thompson (Staff Accountant) at (202) 551-3344 if
you
have questions regarding the comments on the financial statements
and
related matters.  Please contact me at (202) 551-3716 with any
other
questions.

								Sincerely,

						William Choi
									Accounting Branch
Chief

Mr. Greg Henslee
O'Reilly Automotive, Inc.
December 15, 2005
Page 1

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