In the highly competitive segment of auto parts retailers, O'Reilly Automotive (NASDAQ:ORLY) continues to run smoothly but appears to be slowing down. O'Reilly faces a plethora of tremendous competition, including industry leader AutoZone (NYSE:AZO) as well as Advance Auto Parts (NYSE:AAP) and Pep Boys (NYSE:PBY). Yet, it has proven it's more than capable of holding its own by expanding successfully while also growing earnings and comparable-store sales. Unfortunately, the entire market is showing signs of a slowdown.

In the second quarter, O'Reilly's earnings increased 5.2% to $51.9 million, or $0.45 per share. Sales advanced 8.8% to $643 million, boosted by a 2% gain in comps. Although inventories were up in the quarter, O'Reilly's balance sheet looks solid overall, with its cash increasing, and long-term debt falling by 25%.

In an effort to attract a larger share of the business, O'Reilly continues its aggressive track record of opening new locations. It added 44 new stores in the quarter, including in Ohio for the first time. It also relocated its Minnesota distribution center to a new and improved facility to ensure all its stores are adequately supplied.

However, despite the company's growth and solid financials, the Street was not pleased. The stock price was nearly 6% lower as of this writing, as investors pointed to slowing sales and earnings that came in under analysts' estimates.

Although I understand investors' concerns regarding O'Reilly's slowing sales and the overall economic difficulties, the sell-off seems pretty aggressive. The expansion efforts have been running smoothly, and it has proven it has the customer base to maintain its growth, despite the recently slowing sales. Even if the market remains difficult, I expect O'Reilly to continue moving forward, though at a somewhat slower pace. Investors may want to proceed cautiously, but I think the sale presents a good opportunity for patient investors.

If you prefer reading about auto parts retailers rather than shopping at them, check out:

Think you could pitch your favorite stock -- or ditch your least favorite -- in 27 seconds or less? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article.