Gregory L. HensleeThanks, Tom. Good morning, everyone and welcome to the O'Reilly Auto Parts Third Quarter Conference Call. Participating on the call with me this morning is, of course, Tom McFall, our Chief Financial Officer; and Ted Wise, our Chief Operating Officer. David O'Reilly, our Executive Chairman, is also present. Once again, I have the pleasure of beginning our prepared remarks by congratulating Team O'Reilly on the excellent performance. Our third quarter comparable store sales increase of 4.8%, on top of the 11.1% increase we generated last year, is a significant accomplishment and we should all be very proud of our results. As always, our outstanding performance is the direct result of the effort each member of Team O'Reilly puts into our ongoing goal of providing our customers the highest levels of service in our industry. Each one of us plays an important role. Whether our position is in one of our 23 distribution centers, our headquarters or on the front lines in one of our 3,700 stores, as a team, we continue to lead the industry in comparable store sales gains. Thanks to all of you for your hard work and commitment to our company's continued success and again, congratulations on a great job. Now, on to some details about our performance in the third quarter and some observations on our industry. As we discussed on our second quarter conference call, we projected third quarter comparable store sales in the range of 2% to 4%, and are pleased to report that we exceeded our guidance with comparable store sales of 4.8% and a 2-year stack increase of 15.9%. This is an acceleration compared to our first and second quarters, which had 2-year stack comparable store sales growth of 12.5% and 12.3%, respectively. Sales throughout the quarter remained fairly steady with solid results considering the tough comparisons. The better-than-anticipated performance came primarily from the commercial side of our business as we continued to execute well in our historic markets and continued to succeed with our efforts to implement our dual market strategy in the CSK conversion stores. With the heavy lifting now behind us, our work continues in the conversion stores as we work to further penetrate the commercial business and take back some of the retail market share that those stores had lost over time as we've discussed in the past.
We continue to be pleased with the results of our efforts. With expected variations that exist in any retail chain related to store management abilities, local competition or lack thereof, we continue to see steady sales improvements in the converted stores. As one would expect, the CSK converted stores as a group continue to lead our company in comparable store sales improvements, and we anticipate this trend to continue as we incrementally earn credibility and improve our reputation as the very capable parts supplier and business partner we enjoy in our historic markets across the country. To this point in October, the relatively steady sales trend we've been on has continued. As was the case with our third quarter, we have challenging comparisons in the current quarter, having generated 9.2% comps last year. As always, the primary macro factors that affect demand in our business are miles driven, age of vehicles on the road, fuel prices and unemployment. Through the end of August, miles driven in the U.S. was down 1.3% for the year, representing 26 billion pure miles driven as compared to 2010. Through the end of September, it appears the seasonally adjusted annual rate of new car sales is about 13 million units, an improvement over 2010. Average fuel prices, while down from the weekly average high of $3.91 per gallon in May, are still 23% higher than this time last year. Currently, the average cost of a gallon of regular gas is about $3.42 compared to $2.78 last year. And lastly, the unemployment rate continues to hover around 9%, down from the reported high of 10.6% in January of 2010.Read the rest of this transcript for free on seekingalpha.com