Jeremy Fletcher: Yes. No, I think, Brent, I think you said it well. Seth, I think we previewed a little bit on last quarter’s call, but it’s kind of hard to get the cadence quarter-to-quarter. As we just think like in particular about the timing of the impact of some of last year’s investments and not to get too far down in the weeds here, but our depreciation headwind in first quarter was kind of high teens year-over-year growth there. And that’s the number that through the balance of the year starts to moderate as we move down through. So more broadly speaking, especially as you think about the dollars, you also had impacts in the quarter with leap days. So it does create a little bit of noise in terms of the cadence.
But against that broader backdrop, feel solid about the management SG&A. It’s in line with where we would have expected to be. And as we work through the balance of the year, feel comfortable with how we think the teams are balancing both the investments that we continue to talk through and we’ll execute on while also just being responsive to what we’re seeing in the business.
Seth Basham: That’s helpful. And as my follow-up, just thinking about the DIY segment and the softness you called out discretionary categories, recognizing that some of that might be weather-driven. Is this a change in trend that you’ve seen with more pressure in the discretionary categories in recent months?
Jeremy Fletcher: Yes. I can probably talk to that. And maybe the first caution that I would say is we’re still within a relatively tight end of what we thought from expectations. And I know Brad mentioned it within his response. The confidence that we feel is just from the broader mix of our business, the ability to see solid performance really across the core categories that we know are indicative of how the consumer is thinking about the backdrop has been good. The entry into first quarter, both the tax refund money and with the weather backdrop, it tends to be a quarter that can be more volatile just generally on discretionary categories. Often, we’re in the position like others within our industry of hoping that we’ve got both good weather and tax refund money hitting at the same time.
So that’s – there’s a reason why that can be volatility. We wouldn’t call it out as a sea change and for sure, in the broader sense of our business. It’s a smaller piece, but it is just one area that we pay attention to as we’re trying to make sure we’ve got a good read on what the consumer looks like.
Seth Basham: Understood. Thank you very much.
Jeremy Fletcher: Thank you, Seth.
Brad Beckham: Thanks, Seth.
Operator: Thank you. Your next question is coming from Michael Lasser from UBS. Your line is live.
Michael Lasser: Good morning. Thank you so much for taking my question. While the indications are still coming in about the performance of the overall aftermarket and it’s still pretty early. It does seem like O’Reilly’s outperformance versus the rest of the industry is moderating versus where it’s been. Why is that the case?
Brad Beckham: Yeah. Hey, good morning, Michael, thanks for the question. I don’t see it that way. I – number one, I’ve been in this business here at O’Reilly for 27 years this year and been through challenging years, been through great years and been through election years and years that we get off to a little bit of a choppy start, and I’ve learned every time not to necessarily overreact that we all – we take any potential slowdown or anything like that very seriously. We want to make sure we control what we can control. But it’s always hard for us to base exactly where the share gains are coming from and it’s sure hard to base it here short-term on just a competitor reporting or something like that. We don’t spend a lot of time internally trying to dissect that.
What we do internally here is, we focus on our revenue versus the $147 billion, we believe, is being sold in the United States, and that just gets even bigger obviously, now that we’re expanding to the rest of North America. So we stay focused on that total addressable market versus what we do today. And Michael, I don’t see anything that’s materially changed in the way that we’re competing. We have tough competitors out there. We have really great competitors that we have a ton of respect for both the big close-in competitors that are public companies as well as the solid WD operators, the independent operators. And we still feel really good we just – I’m so proud of what our teams have accomplished the last few years, but I believe our share gains continue.
Michael Lasser: Got you. Brad, you mentioned that you did see a bit of a slowdown in March, and that’s continued into the first part of the quarter. Can you provide some frame of reference for that? And what does the P&L look like how is the sensitivity of the P&L? If this is just one of those years where it’s a bit of a slower backdrop for the aftermarket and the ultimate comp ends up at the low end or maybe even slightly below your guidance? Thank you very much.
Brad Beckham: Thank you, Michael. I’ll start out and answer your question on just kind of the cadence of the exit and kind of how we’re feeling about the last few weeks, and then I’ll let Jeremy talk to the last part of your question there on SG&A. So Michael, really, the thing I want to be a little careful of is, even though we have a few weeks, it is just three weeks, and we have a lot of quarter left and I think the reason that we’re trying to balance the choppiness with not knowing what the future holds, all with the fact that we have had some of this weather that it’s just not ideal. It’s a different weather story than like in January, where we love harsh winters, and we love hot summers. The stuff that’s in the middle can just be a little bit not conducive to what our DIY customers want and need to get out and work on their stuff.
I’m sitting here in Springfield, Missouri this morning, looking out the window to 50-something degree weather and it’s raining out there. And our operational teams absolutely did not spend any time focusing on things that they can’t control like weather. But we just we don’t want to say too much about the choppiness because there has been some, but there’s also just been this weather factor, and we feel like that we got a lot of quarter left and we just want to see how that plays out. But we just want to balance those things, and I’ll let Jeremy take the SG&A.
