O'Reilly Automotive (NASDAQ:ORLY) has been a top performer in the aftermarket retail space, outperforming the likes of Advance Auto Parts (NYSE:AAP) and AutoZone (NYSE:AZO). The automotive sector has seen a revival of late, with recent trends indicating strength in the industry . The resurgence of the auto industry is good news for all related ancillary and service industries as well.

As a result, all three aftermarket retailers mentioned above have had a good run recently, as shown in the chart below. This is pretty understandable, as the average age of vehicles in the U.S. has grown to an all-time high of 11.4 years , up from 11.2 years and 10.9 years in 2012 and 2010, respectively. Moreover, the percentage of vehicles over 12 years of age has increased by 20 %, leading to higher demand for aftermarket automotive products.

ORLY Chart

ORLY data by YCharts

O'Reilly doing well
According to estimates from the Automotive Aftermarket Industry Association and the Automotive Aftermarket Suppliers Association, the U.S. auto aftermarket industry is projected to grow at a rate of 3.4% annually through 2016 to $263.8 billion, adding $32.6 billion to the economy .

In the third quarter, O'Reilly did well to catch on this trend as it reported sales of $1.73 billion , 8% more than the same period last year. The increase in revenue was on the back of 4.6% comps growth versus 1.3% in the year-ago period. Net income improved 17% to $186.5 million (10.8% of sales) from $159.3 million (9.9%) in the third quarter of 2012.

O'Reilly posted a 28% increase in earnings to $1.69 per share as compared to $1.32 per share in the year-ago quarter. The company managed to beat the consensus estimate of $1.65 per share. This marked the 19th consecutive quarter of 15% or more growth in earnings per share.

During the quarter, O'Reilly opened 50 stores and closed 2 stores, bringing its total store count to 4,135 in 42 states. Sales per weighted average-store increased to $417,000 from $409,000 a year ago. The company plans to open 190 new stores in 2013. For 2014, it has a target of 200 new stores in existing and new markets in order to be able to compete aggressively against its peers.

Plans ahead
Going forward, O'Reilly plans to relocate the distribution center in Lewiston, Maine, to a bigger facility located in Devens, Massachusetts, which will have a capacity to service 280 stores and is expected to be operational beginning in the second half of 2014. This will also act as a catalyst for the company's future expansion strategy for New England. In addition, in 2014 O'Reilly plans to open distribution centers in central Florida and Chicago.

The real-estate group of O'Reilly is busy identifying site zones throughout the Northeast, and is currently in the process of negotiations for potential new store openings in these markets beginning in early 2015. As O'Reilly continues to grow its store network, it will be able to cater to a greater number of old vehicles.

Buoyed by good results, O'Reilly raised its earnings per share guidance for the full year to $5.91 to $5.95 per share from the earlier range of $5.79 to $5.89 per share. The company also reiterated its revenue guidance of $6.6 billion to $6.7 billion for 2013, and increased the operating margin guidance to a range of 16.2% to 16.5% from the prior guidance of 16% to 16.4%.

Advance Auto and AutoZone are also making some moves
Just like O'Reilly, Advance Auto Parts has also been performing very well and the company is expanding its network through store openings and acquisitions. Advance Auto's revenue has grown as a result of the acquisition of BWP Distributors and the net addition of 170 new stores in the last 12 months.

During the previous quarter, Advance Auto opened 35 stores and closed 7 stores, including 5 Autopart International stores. The company's total store count stood at 4,018, including 222 Autopart International stores , which is marginally less than O'Reilly.

Advance Auto also announced the recent acquisition of General Parts International for $2.04 billion. The successful competition of the acquisition by late 2013 or early 2014 will make Advance Auto the largest after-market auto parts retailer in North America.

AutoZone is yet another option for investors to consider if they are looking to invest in the aftermarket retail industry. AutoZone's revenue growth has been decent, with growth rates superior to those of Advance Auto.

ORLY Revenue (TTM) Chart

ORLY Revenue (TTM) data by YCharts

AutoZone has also been following the expansion path to increase store count like its peers. During the previous quarter, it opened 69 stores in the U.S., 21 stores in Mexico and two stores in Brazil. As of Aug. 31, 2013, AutoZone's total store count stood at 4,836 in 49 states in the U.S., the District of Columbia and Puerto Rico, 362 stores in Mexico, and three stores in Brazil.

AutoZone has also been repurchasing shares to keep shareholders happy. During the previous quarter, AutoZone repurchased 1.3 million shares for $560 million and still had $468 million worth of shares remaining for repurchase at the end of the fourth quarter. Thus, combined with its store expansion initiatives and shareholder-friendly moves, AutoZone is a stock worth watching in this industry.

Aftermarket retailers should continue doing well as the average age of cars increases. O'Reilly's store growth plan, superior same-store sale growth, and increasing sales per store are some good positives. The stock has been the best of the lot when compared to peers and it could continue gaining going forward on the back of solid strategies and execution.