Genuine Parts Company (GPC, Financial) reported a solid financial performance for the second quarter, with revenue reaching $6.16 billion, surpassing the anticipated $6.1 billion. This outcome aligns with the company's strategic plans and cost management efforts, even amid challenging market conditions.
CEO Will Stengel emphasized the importance of the company's strategic actions in navigating the current economic landscape. As the company moves into the latter half of the year, GPC remains committed to focusing on controllable factors to effectively manage the shifting market environment.
GPC Key Business Developments
Release Date: April 22, 2025
- Total Sales: $5.9 billion, up 1.4% year-over-year.
- Gross Margin: 37.1%, an increase of 120 basis points from last year.
- Adjusted EPS: $1.75, down 21% from the prior year.
- Global Industrial Sales: $2.2 billion, approximately flat year-over-year.
- Global Automotive Sales: Increased 2.5%, with comparable sales decreasing 0.8%.
- Global Automotive EBITDA: $285 million, 7.8% of sales, a 110 basis point decrease from last year.
- US Automotive Sales: Up approximately 4%, with comparable sales down approximately 3%.
- Canada Automotive Sales: Increased approximately 5% in local currency, with comparable sales up approximately 4%.
- Asia Pacific Sales: Increased approximately 12%, with comparable sales growth of approximately 3%.
- Cash from Operations: Down $41 million; free cash flow down approximately $160 million.
- Capital Expenditures: Approximately $120 million invested back into the business.
- Dividends: Approximately $135 million returned to shareholders.
- Store Acquisitions: Acquired 44 stores from independent owners and competitors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genuine Parts Co (GPC, Financial) reported total sales of $5.9 billion for the first quarter, up 1.4% compared to the same period last year, driven by acquisitions and improvements in the industrial business.
- The company achieved a gross margin expansion of 120 basis points year-over-year, benefiting from acquisitions and strategic pricing and sourcing initiatives.
- GPC's modernized e-commerce platform, NAPA PROLink, developed with Google, has received positive feedback and is contributing to mid-single-digit growth in NAPA B2B e-sales.
- The Global Industrial segment saw sequential improvement from the fourth quarter, with positive average daily sales in all three months of the first quarter.
- GPC reaffirmed its 2025 outlook, expecting adjusted diluted earnings per share to be in the range of $7.75 to $8.25, indicating confidence in its strategic initiatives and market positioning.
Negative Points
- The company faced a negative impact on sales growth due to one less selling day in the quarter, which affected sales by 110 basis points.
- Global Automotive segment EBITDA decreased by 110 basis points year-over-year, reflecting ongoing pressure from softer organic sales in the US and Europe.
- Adjusted earnings per share for the first quarter were down 21% from the prior year, impacted by lower pension income, higher depreciation and interest expense, and foreign currency headwinds.
- GPC's SG&A expenses as a percentage of sales increased by 170 basis points year-over-year, driven by higher salaries, merit adjustments, and rent expenses.
- The company is navigating a complex external environment with uncertainties around tariffs, trade policies, and inflation, which could impact future performance.
