• 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.

• Warning! GuruFocus has detected 4 Warning Signs with IVZ.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Genuine Parts Co (NYSE:GPC) 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.

Q & A Highlights

Q: Can you discuss the inflation impact on both the Motion and Automotive businesses in the first quarter? A: Herbert Nappier, Executive Vice President and Chief Financial Officer, stated that inflation was slightly less than 1% across both businesses, aligning with expectations. The impact was more pronounced on SG&A costs, particularly in salaries, wages, and rent, which increased by about 2%. However, inflation is declining, indicating that monetary policies are having the intended effect.

Q: How is Genuine Parts Co performing in the European Automotive market, and are you gaining market share? A: William Stengel, President and Chief Executive Officer, noted that the company is pleased with its performance in Europe, particularly with the growth of NAPA-branded products. The company believes it is gaining market share, supported by strategic initiatives and cost structure optimization across European geographies.

Q: What is the current status of the North American Auto strategy, particularly regarding independent acquisitions and store operations? A: William Stengel explained that the company continues to add stores, with 40 to 45 new stores acquired in the quarter. The focus is on running great stores and improving store operations, sales excellence, and inventory management. The independent owner model remains crucial, and the company is committed to supporting these owners.

Q: Given the uncertainty around tariffs, is there a scenario where the situation could improve, potentially benefiting Genuine Parts Co? A: Herbert Nappier mentioned that if the current period of dislocation resolves quickly, it could lead to a more robust second half of the year. The guidance range allows for some upside if tariffs are resolved favorably, and the company is prepared to pass through price increases if necessary.

Q: How is the Motion business performing, and what are the customer trends regarding capital projects? A: William Stengel reported that Motion's performance was in line or slightly better than planned, with increased customer activity in capital-related projects. The industrial economy is showing signs of improvement, and the company is well-positioned to benefit from a potential recovery in the industrial sector.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.