GPC - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to the Genuine Parts Company Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I now like to turn the conference over to your host, Sid Jones, Senior Vice President, Investor Relations. you. Thank

begin. may You

Sid Jones

here thank Executive Company joining call second results Officer. and XXXX. our and and our the Executive President Chief to today and Genuine earnings Officer; I'm for outlook Parts quarter Yancey, and Paul you morning, Donahue, us Chairman our for Carol for discuss with Vice Good XXXX Financial conference Chief

Investors to may during please A of include website. this is discussion Accepted we morning, be may which press advised section earnings be this Generally which begin issued in provided results referred non-GAAP certain our reconciliation our is this call today's financial of the measures under as morning, measures, Before posted that also the release of reported these Principles. Accounting in

also important regarding any made the materially described differ obligation and Today's the during results company's assumes forward-looking company several forward-looking from company's this to The press SEC call including statements update no to statements company factors actual any due may this businesses. its morning's filings, release. could The latest call. in forward-looking statements involve

I’ll call turn Paul to his Now, over remarks. for the

Paul Donahue

Yancey, will outlook update questions. that, performance our current few overall you call open Sid. be today, conference welcome quarter After up an my and then Thank businesses. cover call. our I’ll second time released provide with on we'll to we Carol across our I’ll remarks and the XXXX. to second a We results. our And highlights financial you, us make add the this on for our results your the our Earlier appreciate taking to XXXX morning. XXXX quarter

was a sales total billion, performance global and currency from Net platform, record comp $XXX a the X.X% in driven the from benefit X.X% a Auto QX a quarter by second across from strategic translation, increase, our headwind second sales quarter recap XXXX, of $X.X X.X% income from per were To earnings foreign a net share acquisitions, divestiture. Todo of $X.XX. up our were and million X.X% and X.X% impact

other adjusted $XXX Excluding and share. transaction per million, the impact related income of net to or was cost $X.XX acquisitions,

in second by automotive group in Europe, Our segment, in products the sales. our our sales decline including regions, and growth highlighted were while Canada, of the U.S., Australasia positive slight each total had quarter and results industrial a business

Our pressured was broad core by and ongoing in a automotive Europe consideration. factors political mild winter and transitory the of season performance economic

Automotive of unfavorable QX. in detailed X.X%. sales impact our acquisitions. a segments, from Turning Global of from sale our review and which represented foreign offset partially to benefit of Todo our revenues currency by a an of XX% were total business X.X% and a more X.X%, the X.X% Group, sales Auto was up increase the comp in total This includes This

much of region, X% growth, U.S. comp automotive sales sales By quarter conditions despite consecutive the X%. up comp of with fourth our of U.S. in plus in across the X.X% throughout wet marks challenge quarter. were at continuation our sales comp quarter the solid of the the sales country second This

sound of on executing provided the forward look cease both the our over and growth in to and year, fundamental. confident opportunities U.S. positive industry remain the We we aftermarket the strength of balance to climate business the initiatives the automotive by

customers. total the automotive of sales commercial with close segment, our especially positive with growth We and pleased strength our to In XX% second the quarter, retail which to of U.S. the our sales were both sales. represents commercial we had

the outperformance. While our we Centers across sales experience to commercial our NAPA AutoCare customers gains segment, sales drove

by quarter X%, a up focused XXXX. team our the direct result the AutoCare This in-line our and with from first of to was in increase the improved X.X% new Sales were management customers growth of XX,XXX with automotive share this to fastest business greater well NAPA a is and year. growing over our for strategic targeted to U.S. represent represents members these customers. customer drive AutoCare segment the wallet

expect dealers improved Sales element regional major others our customers our important segment. X% and continued a quarter partners accounts group were the [technical with up of growth difficulty] the in to overall meaningful and strategy. in and customer our among account We quarters from ahead. large important this growth these OE results represent to sales an Driving is

pressured but wet quarter. We retail that the our persisted to weather throughout back group our as were as noted sales the believe retail segment, to positive Turning somewhat normalizes. will weather this bounce before, the from business

stores, been retail overall across which have reset continued initiative further impact this significant our network. expand we have to retail stores represent to renovated performance, and our and that those Our outperform opportunity

While in at we these independent company begun initiative we’ve really implement this successfully completed to our our stores, just have stores. changes

NAPA produced the strong In accretive members digit million Program, addition, overall tuck-in At the and now Rewards retail to growth benefit acquisition. by NAPA growth sales Canada, driven remains having reached business our of of another solid our mid-single which continues sales sales added XX.X strong results. and additional positively impact has comp quarter drive

Our expect significantly heavily mild continue the associated overall operate sales Canadian In a most environment. on sales continued this operate, team business momentum. business softening weighed to Brexit, Europe, across our core results. economic challenging our disruption of the maintained build environment a each with winner of in we and on positive The pressured our operating which and to regions strong in margin to automotive and we

of to the team in step this management to address Europe cost by early taking first Our these issues the quarter began mitigate comprehensive implementing downturn. initiative in effects saving

offset these of personally balance year. up property the ramping the over expect Europe to clients and in are our ongoing We efforts

new we’re factors operating closing the opportunities June. providing is region effective for of Europe, The the of affecting by PartsPoint acquisition Europe and environment. in Belgium. impacted of see much AAG the economic political and quarter, announced business the Benelux excellent we not During fit This more excited an growth strategic the we the has stable a for Netherlands in and been

generate PartsPoint million $XXX annual to We European further forward and estimated this to growing and of business revenue operations. expect strengthening our look

agreement into acquire truck other avoided Group, France The and heavy-duty that an economic the independent And aftermarket. has leading in has at and grow Europe continues European finally, parts and Todd rates. yesterday the in to we heavy-duty market heavy-duty accessories distributor solid for pressures for to announced entered the AAG and a

With over in with the addition leader becomes locations. in aftermarket of XXX the undisputed independent France Todd, AAG the well heavy-duty total

fourth while committed expect estimated generate Europe. in our annual We disappointed XXXX as all reduce be the quarter cost for recent and we we results. million our work our Undoubtedly, transitory results quarter’s to this close with and in to steps have $XX are transaction through of in this immediately business in proactive this but these challenges, growth to nature, in structure the also which seen to term we in We taking impactful near remain revenues. plans, believe to

are growth New and effective combined sales. to impact solid Australia quarter aftermarket with sound the reflects of for digit we fundamentals. Zealand, total mid-single and In and a pleased This another comp to the cost with low well-executed increased strategy positive controls steady report both sales growth

our Sparesbox to business, growth As in we effective our investment part X. XX% July this plans increased for of

accessories financial our and to not business. Australia’s parts online While Sparesbox results, leading automotive significant is

our digital this our grow and served cutting-edge sales potentially the in across operation. to digital Australasia global marketplace partnership As specialist, capabilities of enhance understanding a our digital and

and Sparesbox with business expand We are to growing excited partnership to forward the our team together. our look

U.S., while XXXX. in summary, business In challenged, are the our European businesses automotive our well Australasia remains performing in and Canada, thus far

to also continue that we positive can are ahead. working quarters the in while this We improve trend, European results confident our

which to perform including partially Turning currency by now to continues a acquisitions, our sales X.X% well a up business benefit this offset slight $X.X X.X% headwind. with Industrial billion, growth, from of sales Parts Group, and comp was X.X%,

improved this a in drove quarter’s point operating margin. XX-basis profitability Importantly, improvement sales growth and

are So, we the progress we continued our are in with making business. pleased industrial

execute effectively stable our in to on economy. continue operate industrial we a growth and initiative Overall,

In addition, positively to well and overall continue to our contribute results. acquisitions our perform

first in product product supplies, the consistent and with results gains XX pumps our XX and handling, performance, industrial way. sales with posted our especially material of leading were to Looking sector industry the quarter. results strong category and the sales groups hose major

these driven business outlook highlighted XX growth the the primarily sectors, we allied positive several sales and of products, food aggregate steel, group, copper lower X balance by and automotive the electrical metal fabricated the cement, industries, industrial pricing. of We softer chemicals of across specialties increases, in results North were products, sales impact growth year. strong and and the for top the iron American products, confident Additionally, in for where remain sectors. by including our generated compete, Offsetting

Inenco our in July forward the to purchased of two-year addition, X. look Australasia and expanded to later our purchase opportunity previously industrial company consistently originally at balance come. held our we In announced, a We Inenco, Throughout stake stake of as partnership, into the team XX% in a this in footprint effective our exceeded the with the remaining many acquire XX% the for XXXX expectations, date. together years and to business growing we

with and additional in base. with Australasia's one strategic and and North suppliers automotive products and business with cost-related sales America we In operations leading realize extensive associated New perspective, tremendous with in distributors from total approximately expect industrial fit synergies of Singapore. services customer presents global to our and a diverse is Likewise, is our opportunities Australia, excellent already Inenco motion $XXX an Indonesia of Inenco, in annual Zealand, million. Australasia.

excited Inenco this Jowett So, the we full of we forward and to to move officially GPC. outstanding team organization are welcome ownership with Roger and

you products Now, our S.P. we Richards, our want group. to update performance at business on

down quarter, second total For slightly. the comp sales were this for business and

for delivered of supplies performed business While in although experience our our core solid well office business softening in and a supply supply has safety facilities business several products we results. QX, quarters, bit

total in our providing revenue the opportunities. of industry, XX% segment and growth with represents products growing future the additional FPS fastest us business is

we margin with on the bodes margin operating only our improvement build quarter strengthen sales position national This and we business U.S. wholesaler well and held operated In well addition, year. our in independent as the last the for during second as products we constant

XXXX. recap business quarter results consolidated of our a and that's the segment second So, for of

to With that, I'll Carol remarks. her for hand it over

Carol Yancey

you, Thank Paul.

$X.X gross XX.X%, the We our comparable increase key updated to a with in XXXX and provide and sales including X.X% our compared our margin will a XXXX. X.X of was begin factors. for financial in then XX.X% outlook quarter of improvement representing billion, with relating several growth, the information our review in quarter margin to will sales With total second we

increase businesses, initiatives, strategies, quarter, supplier more and industrial Similar to flexible primarily the of advantage and in sophisticated pricing reflects automotive product our mix. margins ongoing favorable global the higher due a presence, the taking to and first including

our in In margin. supplier the gross on impact also business increase positive incentives across a segments addition, had

in our expect an done balance to the line to our job of in XXXX has of margin run for been pricing with our improving inflationary rate team gross assumes the relatively levels consistent rate. and incentives. of Our range environment excellent we and year, inflation the continued relatively remain This thus has margin gross far current continue XXXX. X% in X% The to volume

have In on products increases tariffs, inflations with automotive, material price while industrial as impact gross seen we overall. commodities, to the our areas been business reflect freight. increases passing and such far, protect raw associated primarily our Thus in margin to pricing, and customers the of price increases supplier have in successful general

to net positive our have continue of a levels that we So, current results. been believe the inflation to

through the this XXXX. to of continue expect We balance

of implemented. tariffs, By the second for and U.S. were X.X% six relates to to second the on segment, products. X.X% as quarter X.X% well as in business impact previously XX% in the their months for our automotive, the sales industrial, for the quarter impact tariff tariffs Specific

expect as margin same before, we do gross As our XX% mentioned to and going maintained we the related to tariff XX% impact have the incurred we forward. the tariffs

sold, U.S. As cost is of of this XX% cost automotive our XX% X% of including sold. a goods goods subject business goods our of reminder, and our tariff, of U.S. products to cost sold of

$X.X rising IT cost costs SG&A, those the due including our year in Turning on expenses were were cyber sales of up sales. the which for well operating quarter, loss and last in X% to of of such payroll, a as to leverage from as the areas security, of factors, result in second freight, and business the our as These these Europe their businesses. in declines expenses billion several as products XX.X% effect represents comparable

across our have have steps to facility As move the include expenses environment discussed we offset more rising leverage we calls, consolidations, to to earnings of forward. past productivity and efficiencies we our operations. several ongoing better cost integrate to drive initiatives in our our effectively and solutions, initiatives These other acquisitions, as

need the plans recognize will that produce we’re later, cover get Paul As additional and to developing greater we cost done. savings to

discuss the segment. by let’s results now So,

from our profit of X.X% quarter X.X%, prior of margin quarter for Our operating second billion, was was $XXX and compared with $X.X down the at year, in second the an million automotive up X% revenue XXXX. X.X% to the margin operating

So, impacted the as by on were margin. to for of see rising our our deleveraging of improvement while expenses gross half they also the as which we continue in Europe, line, well than in margin more decline costs, accounts

earlier, As cost in are ahead. the to enhancing we initiatives address our the mentioned quarters

industrial Our billion XXXX. quarter, the $X.X sales a from increase of X% in were solid QX

operate operating strong the another margin and well of due with X%, improved from leveraging solid Our a XXX expansions expenses. operating industrial XX-basis gross with profit to point X.X% results. increase of The up last to quarters operating consecutive and of is sales businesses million margin and XX to continue X.X% year

$XXX down XXXX. the as X.X% which is stabilize. were X% from continues this sales, was revenues year. business $XX results product are solid and prior consistent with business million, million to profit of Our operating Operating They

was XX Our compared at had but total a company profit second our million operating profit increase quarter, million X.X% in margin the We to operating the which X.X%, quarter, expense and the second year. consistent from last quarter in the on X.X% was XX X.X% was interest quarter sales with million, last down XXX year. net first second in down the

to estimate full-year, net up million. we’re $XX $XX previous This PartsPoint million be debt assumed $XX Inenco is ahead, and the the for range million million accounts new in interest to $XX for Looking of our acquisitions. for the currently to expecting from the which

to from recent for the $XXX we Our also our $XX million was $XX amortization total approximately due for are acquisitions. amortization previous and quarter, expense the second to our million million, XXXX updating full-year

$XXX line, to million for our primarily and and amortization in for of $X depreciation our we $XX the year. depreciation $XX to which in the $XXX million be primarily million a XXXX. press the Continuing depreciation in transaction we to expect the costs, second $XXX of presented expense with to which quarter, related combined the basis, other quarter million On was $XXX to million Our in range other continue the second PartsPoint million and information includes this in segment represents expense was release, million corporate expect acquisition.

improved XXXX for other slightly expense when million $XX last corporate million, in Excluding $X these recorded costs, which was our and has costs adjusted from the transaction year.

to our $XXX in range. expect expense corporate be XXXX, continue $XXX the For we to million million to

increase Our tax transaction, to statute-related rate the year. prior in in are well these as periods. for primarily the second non-deductible that due is quarter other was as XX.X%, XX.X% reported which the This costs, adjustments is from an the rate and

to year, to full rate XX%. tax be approximately we the continue For our expect XXXX

strong Now, and let’s balance which turn the remains condition. to excellent in sheet,

was PartsPoint, of and in compares acquired $X.X acquisitions, of from from receivables. it increase X.X% pleased X% receivable quality prior to year. is also accounts our remain which very our the a Our with including sales impact total We X.X% billion up This the includes our June.

June acquired X% June $X.X year. additional XX This relates Our last up from the was last acquisitions inventory inventory the XX through over X.X%. that to added months, billion, primarily which of increase was the at

the In increase key as at focused of includes inventory addition, this on forward. investment remain we the the We as in move well levels inflation, impact appropriate as tariffs. maintaining

a X%, XXX%. stands up payment global $X.X due inventory degree key of to increase At of and benefit mainly payable in billion terms is AP accounts lesser June the purchasing at volumes our with Our a improved XX, to ratio partners. our to the

March placement billion that rates to debt is the We XX Inenco. years. periods X from PartsPoint XX, total the from for maturity and entered we June these of and due this recent acquisitions favorable private and XX $X.X to up is of debt additional agreements Our assume at into primarily billion $X.X at ranging with

year. with At for and June XX June and X.X%, support and comfortable balance priorities our rate sheet stands future which at our capital ongoing our growth a on our total initiatives remain current structure XX, average X.X% have debt our from last capacity financial interest effective to debt strong outstanding improved allocation. the has at We

flows, Turning operations from now our $XXX have approximately in in million XXXX. into generated cash we far cash thus

expect $X free flow, which excludes be cash we in $XXX the in operations dividend the and For expenditures currently and cash full-year, range million to billion of approximately from to the capital $XXX million.

So, to serves believe we continue the maximize ongoing expect our which cash, shareholder use cash flows to value. our of we our support priorities for to

cash remain reinvestment in our as businesses, dividend, for strategic key well Our repurchases. priorities acquisitions, the the share as

capital global thus $XX in planned productivity a technology invested This and expenditures from in growing areas reflects million in million which have XXXX. and increase up We in in is such far a investment XXXX, our in $XXX our platform facilities. as our

the to expenditures of in For the $XXX million. we year, for capital plan continue range

XXXX increased of and in a dividend XXXX ratio. it’s proud our XXXX dividend was are our earnings, paid is annual XXrd increase and XXXX adjusted within is $X.XX annual the payout consecutive which marked Our we targeted of our our of. to X% from approximately record shareholders XX%

repurchase have share XX.X we continue authorized our shares to repurchase. and million available program, Regarding for

We the as other have been capital activity as call. purchases in opportunities and program this have in expenditures active discussed that made the with recent not any were such XXXX M&A investment under we

our softness So, full-year the we over discuss slowing conditions earnings the are and far outlook now the results expect and which include guidance. current foreseeable thus and our operations, we let’s growth for of plans our Europe the the updating our global sales we across continued XXXX year, in future economy balance for market our and In initiatives year, of see in XXXX. consideration this current

as and well dollar, took full-year. the the we addition, as strong we which estimate for acquisitions, of impact X% a currency added U.S. as into continue recently headwind to In a account PartsPoint Inenco the

outlook day our one XXXX. to accounts the for third one relative day quarter the in quarter first additional for XXXX up less to the of Finally, in make selling selling

in to our these plus and Inenco X.X% X% to PartsPoint X.X%. we from the guidance This sales X% updated approximate sales expect to plus for our X% previous contribution it a mind, acquisitions. factors increase from change outlook increase, an sales With represents full-year sales and includes a

this customary, As is benefit of the future any guidance acquisitions. excludes

to the to X% segment, X% Products plus guiding an up the is X% X% which which segment, to from guidance X% industrial PartsPoint; X% inclusive to Inenco; segment, By X% X.X%, plus approximate plus plus due this flat we automotive of and from for contribution contribution previous from for X% X.X% plus total Business essentially segment. business to plus plus to is improved are our sales from plus the of for and is previously, slightly sales for down to approximate an

incurred the expect through share the of side, transaction the in the $X.XX we earnings six of XXXX. for to months On diluted other earnings which first per costs $X.XX, and be accounts range to

$X.XX $X.XX investment in and approximate earnings are the share earnings $X.XX previously. outlook in PartsPoint additional our before change to contribution adjusted for XX% $X.XX This $X.XX We to $X.XX Inenco. represents per to an from updating to a $X.XX from

As well a costs. reminder, adjusted excludes future and diluted as earnings per other half, first transaction any share as

to our our half committed completes operating the business for XXXX. that So to grow the and and of the financial We improve enter our year outlook results. initiatives update second

capital remain an effective on cash and our support meaningful also to strong further We allocation. balance focused generating and flows strengthening sheet

you. it back to turn I’ll Paul, over

Paul Donahue

full-year it’d XX-basis automotive growth our Carol. gross to comp our the significantly U.S., margin easy outlook, Australian challenges We $X.X sales and team’s need sales improved With which modify We achieved billion, to Canadian with in be include quarterly of and Thank gain. overlook our accomplishments, this a businesses. point you, our positive following. including quarter's record the

Australia. We PartsPoint our operating stabilized to with in footprint operating acquisitions, basis The from margins which continues points. business with improved margin, strategic global industrial perform expanded our well two Products Business and was and Netherlands unchanged year; last Our further Inenco XX we in large Group

and journey portfolio important of you now. spoke also sustained key long-term remind a to want X and That June at you our the Day points Investor for efforts few We our for position would it to highlight thought said, this to to be optimize our a we growth. company multi-year

$X our and well America in us both portfolio, added And and significant acquisitions XX performed First, we and beyond and our very since XXXX, this expanded More North positively has which Australasia billion automotive to incremental footprint to value. for we’ve footprints. our group years industrial into revenues automotive recently, contributed have ago. six added provided

we've more XXXX, all While the with purchase of XXXX this we in of have taken via in represented have industrial our late strategic our key Alliance Europe entree expansion Automotive, which expanded stepped businesses these bolt-on out effective and further opportunities, with majority month, acquisitions, and Australasia new including of significant types and advantage into Inenco. the strategic acquisitions XXXX of into

industry performance European our we portfolio. for longer-term well value the challenges remain has it are this transitory, believe impacted operations in for growth will our our while and and of group, this first business confident as results, And fundamentals as XXX% create the half as part the we prospects

to we have our North to business our operations industry these NAPA In XXXX, chain. in a to more consolidated industrial initiatives, Effective we year, and larger, stronger, expansionary this American supply our a to business. in-house streamline In efficient automotive we automotive more operations. motion build network also representing taken several electrical consolidated cost-effective addition into steps supply

we earlier ago. potential Auto year, in the this established years Todo to focus just automotive of business model growth our legacy finally, a of few divested Mexico more effectively on And our Mexico NAPA

mistake; with growth and Products in to results and and overall our are overall strategy platform. the across and go the satisfied market remain group. we our we Today, strong cohesive a We additional with quarter. industrial Business Make opportunities continue in automotive confident network no not global to a we operation pursue enhanced global re-energized our

a implementing long-term confident we are are said, positive our will That on cost impact the we structure. plans have

control is on focus to immediate of execution initiatives Our and profitability. improve our the costs our

to technology some investments to for and realignments, have in industrial theme transformation success automotive the fully in we and investments. us and we through the throughout savings we increase for been While yet the realize and have pressures consistent this need had has our outpace necessary supply a rising the of cost our process, spend

are our we across cost savings more end, savings structure, business expense initiatives our corporate reduction address ongoing incremental value. and ultimately accelerating developing effectively leaders deliver this to cost The drive and plans aggressive meaningful So, to senior our and mission, been further costs, ongoing tasked work with growth. have this accountable to standardize and automate will processes support productivity ultimately as together held we on enhancing office while be to our to execute as well eliminate our plans and to

As examples, execution through we initiatives opportunities restructure personnel the entire our our of successful consolidate other operate and and require both reducing cost. lifting some of occupancy organization. early cost such a identified focus more efforts, we these and facilities, and heavy and will and lower have cost areas can Clearly, functional to the several that at efficiently

these securing play digital to and driving to business growth customers, working our of existing opportunities, in capturing performance. bolt-on new addition In drive our wallet will all incremental improved be strategy, aggressively a initiatives, will an a finally, also revenue additional we securing topline share part with acquisitions greater delivering

improved have We and highly results for delivering shareholders. and our team value capable a creating anticipate management

community We earnings call. progress our will third action plans update investment our quarter in and the on

that, turn your it I we’ll the for will back questions. you Carol listening, to Thank operator, and and with and take

Operator

Imbro Daniel question here ahead. Instructions] Stephens. Great, go Our is first [Operator Please thank from you. from

Daniel Imbro

good Hi, taking for morning, my questions. Thanks Yes. guys.

Carol Yancey

Good morning.

Daniel Imbro

quarter? prepared second in sales the you the the share you overall what comp Did just European during it guys to Paul. Wanted may that a missed remarks? but start could in remarks, prepared with were have actually share clarifier, I

Paul Donahue

Europe, amplified X% the comps in slightly quarter. Daniel, were in out you our the – down in in it really if Europe recall comps X% QX, was to we Europe QX down closer were of and that to and deceleration

Daniel Imbro

it. little cadence you. you Benelux helpful. meaningfully XQ resilient. get noted then, drive that heat, of into are That’s a was weaker Got are then, we Or that through that a And geographies Obviously, than is some just recent get there others? digging that Thank more just how any across uptick? And deeper, bit did didn't Europe? much the did that winter, we but within extremely certain

Paul Donahue

escaped biggest question, and Yes. are you for downturn bounced in Daniel, back in largely Germany have in and Germany. the Poland France, Benelux, was UK, us That’s know, UK. We’ve Germany. seen and We’ve we’re we've great followed the challenge in three and by QX. UK, of Poland. France also markets some the France, The entered QX our Benelux actually primary seen a just as

They sales but blocks seen the first a slight early, of you temps, record have on Daniel, – had recent the of performance certainly in temps I QX. warmer Europe, showed a but actually the seen to in soft what quarter, out increase also commented in And we’ve and would we of we and that July the attribute its markets. some in in seen better that month and July would heat our extreme we've high

Daniel Imbro

Great, really helpful. thanks. That’s

Paul Donahue

Welcome.

Daniel Imbro

for one last then, me. And

disruptive was of U.S.? rain. to auto Just what that you know, your here business given the weather maybe you Could noted quantify on headwinds side, kind the the you was U.S. in

Paul Donahue

stronger can Yes. quarter, that were the for QX most – up – in when cold. the weather-related with weather and challenging U.S. look slightly our the still you wet, just then, June on look, was June. I at our was month, the cadence think much It but – all was to in May certainly we month. were a It's say you to automotive, April. pinpoint awfully the at patterns, we have nature We back of that, business. know, And bounced most mother Daniel, of us if look we reminder in were you hard impact exactly, was more difficult one the May

an know absolutely pinpoint impact. but So, it exactly, hard to had we

Daniel Imbro

so of Great. and guys, Thanks much best luck.

Paul Donahue

Thank you.

Carol Yancey

you. Thank

Operator

Please Sachs. from from Goldman McShane next Our Kate is question go ahead.

Kate McShane

taking competitive we’re that the earlier, question. follow a [past wondering retail now good up tariffs, just your in auto now in Hi, few characterize question if currently could environment my you as seeing just can maybe competitors I with on well? morning. If comment for months was you the prices] Thanks part the I are

Paul Donahue

great a that’s question. Yes,

automotive you're referencing – I'm our We and U.S. are business. assuming

Kate McShane

Yes, U.S.

Paul Donahue

environment the same. look, and is Yes, still very

along passing increases competitors have. much our have tariff-related We like seen we

So, the U.S. we disruption any in seen here not have the aftermarket in automotive serious

you very we’re everybody the along to think at this So, but point, increases. monitor continuing passed closely, I know, has

Kate McShane

And Europe unrelated, chain quarterly on update I the with you wondered what in improvement just last year my think I that quarter? you. could about it starting on if working thank you this Okay, was putting because in place. programs the are where were hosted And supply capital and second that you then, call were question us talking you for you contributed

Carol Yancey

Yes.

continue capital we bought to put So, place. that we Europe right working include these half that, for and working in procurement with a – of We come were targets and did we capital Having have got the perform The terms. ago. [lot a said actually in way] on synergies synergy delivered. being Those these we’ve and year quite that track both synergies well. terms

could relates to While they see benefit the we it the are it well. suppliers European globally, negotiated as as in U.S.

So, we second further benefit our that’s know half the coming and in we have in contemplated guidance.

Europe for guidance. second in half America So, of as impact, and including business global that’s our well, both we North for our QX as necessarily contemplated implied in have automotive, industrial but much and you did an see honestly the improvement

Kate McShane

That’s Thank you. helpful.

Operator

Capital Your Markets. Scot next RBC question Ciccarelli ahead. from Please here is from go

Scot Ciccarelli

are guys, you? Good how morning

Paul Donahue

morning. Good

Scot Ciccarelli

at bit assume I��d interrupt mid-single get June I a know couple wet was points Paul, to May X% just what for does how should guess, and it the in April little U.S. was the better, understand don’t to would it kind to probably up the range. also if of want assume up a quarter to the X%. we cadence just So, is we given least was business this I the a on digit that, comp X% was down just I side, I of and to know, auto slightly, specifically

Paul Donahue

Absolutely Scot, spot with assumptions. your you’re on

Scot Ciccarelli

Do it. anything, you that got understand to Okay, on weather if so or have else factor? something cadence attribute happened is another that is can kind the there of may there influence just we that

Paul Donahue

QX quarter, is back solid. saw commercial the well we go prepared in you in comment business to Scot, if what DIFM, as Well, our in we my as our saw

our with we’re had key good NAPA grabbing the AutoCare momentum customers. We in business. of share greater continue in We wallet we our AutoCare believe QX

mentioned major certainly where business prepared pleased So improvement is is were positive, business we’re with my our account year. that an we as in last which over very remarks

of business. think retail side If you certainly more on that’s our weather impact month May we Scot, impact the than in of probably about more, commercial were our the the

Scot Ciccarelli

was recent And it DIY gap been commercial than wider between and in has quarter this the quarters?

Paul Donahue

Yes, it was.

Scot Ciccarelli

Got it.

guys. thanks Okay,

Paul Donahue

You’re welcome.

Carol Yancey

Thanks.

Operator

is next question Our from go Horvers from Morgan. ahead. Please Chris JP

Chris Horvers

everybody. good Thanks, morning

Paul Donahue

Chris. Good morning,

Chris Horvers

you the the the it core looks for be considering year sales helpful. at you underlying in the NAPA business, U.S., core can but the core $X.X EPS get a emotions it thinking really change time acquisitions, you down guide businesses just is How the the I are further? ex but lighter break us in you for that outlook the in did the if same like emotion acquisition? particularly talk little the the acquisitions? know So, bit that first lowering European a losses, through Europe. effectively guide change Is business, for about is the would could you little Carol,

Carol Yancey

Sure, I’m happy to.

probably down again was QX they half So, in running QX. as moderate the point for the is on our through That starting automotive mentioned, comp, X.X% comp with strong in we or first, are did X%, part Paul first based implied half. U.S. mid-single they were at digits so in Europe a QX. a

amount seen So, lowered we U.S. Australasia. we some for a bit honestly, in weakness Europe. lowered have and We small for quite

on little more looked that So, at we their business a top had line. bit there. We so

you’re as there for went So, slightly is then well. lower implied into spot comp and industrial in that automotive that guidance a on our

What are but right taken X business you X the of that to specialties industrial sooner. little into a maybe see at mix, bit looking mixed, implied as maybe that of definitely to out the comment, that had some happened half, signals lot a we we lower comp, X is Paul’s now, account, a we’re it pricing to of this operating in and X but do more is to so in industrial second in where of their in factored again called in know moderation headwinds of slowing electrical for is in felt a appropriate margins QX, was bit and seeing is copper due some was that group we customer our then we The our well. that just

walk kind of that’s So, the guidance. on through

Chris Horvers

Just a couple questions follow here. of

for comp because change did kick sort was U.S. that the of your the the outlook? back or for XQ you down implied U.S., So, solely of from half here,

Carol Yancey

Probably but of very more, I more was mean QX. a mentioned. the this business We of was so weather it still honestly bit factors, a Paul little lot a really transitory. commercial our of QX, as transitory QX and in good feel and about

now the that not half. seeing else anything give concern right would in are second us We

Paul Donahue

on little a a team just Chris, that tag bit.

the business automotive look a North good you half and key industrial for good our of and first both know, American both of feel about You those it’s we year. GPC, at core certainly and add

business on then calling declined of January number We you and there follow this was all has positive. week, in a it’s the a been to if out second expected the very significantly for metrics, June, manufacturing industrial has whether earlier year slow-down which the significant our but everybody that from was came PMI, which

getting industrial mixed side. you’re on the So, signals

cautious, business hanging but at when months So, I of and looking industrial, in we’re there bit you our a being across world. XX look motion is that straight you’re mean growth in

pretty two our So, and about key we’re businesses. good core feeling

Carol Yancey

is probably comp. of comp I One decline slight industrial for just some more margin than thing, stand modifications U.S. the would out say or in the operating the a final the of Europe

Chris Horvers

you Just operating to clarify that, – income is European currently? say auto it’s could loss

Carol Yancey

those plans all QX, primarily for comping with decline the was and we clear, Europe margin and a they in X%. said plan in in they’re result starting March QX, progress such it’s as in plants, them so X%, in make for pronounced X% really to lot mentioned it’s more or but difficult at QX hard on to higher, Paul down the plans what a whatever you much happened see that was improvement. this full out set place, took margins, be comping had action their you about credit, them talked of as their of to – and a just automotive we to, countries, are in down To No, when

some facilities, good in that and consolidation they of job, moderate and of coming we would basis when than restructuring XX The at have and points some place. at head they’ve that We of all said basis look with the XX plans it margins do automotive looking moderation, second attention they’re areas. expect teams half got doing of more in QX, on again to the was probably some count some the half, decline so these looking in see at we done or close see point you their have some some of that their

prior So, decline. year, issue sales with they over leverage positive just are it’s the definitely the poor

Chris Horvers

Understood tariff on earlier. and one a question last just one, the follow-up on

any how outlook there passed is maybe U.S. its being it what for difference XX% think and the back the So, is going now, inflation move then NAPA presumably to so is very – the and on will is for now the quickly XX% last seem passed on passing to year, be to more XX% like, the from peers September, of those increases do you be call it to same business? through behavior you given they the are your price in XX hesitantly by about industry

Carol Yancey

Yes, is it great a question.

had we alternative purchases sourcing up have I away, our look of them along be kind went tariff, as and move seeing and we do having we’ve we with into Vietnam, you but along, issues as believe that already it outside passed said we, picking – we right India, and done Malaysia, look pursuing those ahead, many not capacity. spoke businesses in effect those think to As XX% China, passing the any Mexico, product been know of lines, as our business are to of

of Chinese our going addition, that’s China on well. from also their In as capacity moving sources some are and

second passed So, will half for we tariffs be more look effect pronounced when we through. have full-year, that at the a will in the

we for approximately I first second to expect and half in think the were half. X% We X.X automotive be

that and get for tariff/inflation a So to full-year automotive. us probably half point will a

For probably business which their to it’s commodities, more basis. a on raw going for be be tariffs, inflation, their the full-year will something materials, inflation be a will and on like products office X% full-year it products, half but point less; freight, supplier a includes

Chris Horvers

helpful. luck. That’s Thank Best super of you.

Paul Donahue

Chris. thanks Alright,

Carol Yancey

you. Thank

Operator

ahead. question Seth go Basham next Our is Wedbush from Securities. from Please

Seth Basham

good lot, Thanks and morning. a

Paul Donahue

Seth. morning, Good

Carol Yancey

Seth. morning, Good

Seth Basham

on to is question auto first close loop the the trends. My comp U.S.

growth July, You acceleration type spoke in mean Europe or comp Europe today? July, in know material a also you in in the to further U.S. to but I nice it you see spoke consistent material mid-single do saw improvement strengthening in in a in you improvement July – digit

Paul Donahue

our the tell that would the It’s to early, hot across that yes, U.S. boost a business. now we temps hot, be Seth. seeing is I right for going But you real certainly, are

with you significant NAPA in somewhere and business weather, get sure] the are chunk of a think field. ask and We many a Midwest you business, out farmers getting do which all know, quarter. Midwest regionality in in our about and will our Central was up about the the will business If do performing agriculture, Despite lot the we [I’m business strongest the wet of the farmers trends. Central, someone just now these of

help in we automotive topline U.S. and will to QX. this hot weather So, expect boost our in see a in

Seth Basham

performance the helpful. other Any for standpoint Got from our quarter? regional it. That’s callouts

Paul Donahue

Yes.

also both country, the as Midwest, the strengthening I some U.S., performance see both. Southwest the upper be country, of South, of mentioned those in [eight] the part of – Midwest, top track list. of but the very So, in except geographical central as we have the Southeastern part we the I’m part well would to But at regions the four a pleased

Seth Basham

Fair the decline? in doing in costs U.S., you control to guess, by decline What enough. the to are margins implied there, U.S. that And that for what's your you auto the saw comments, turning alleviate a to I pressure? business driving

Carol Yancey

in margin and is basic other would the a tell mention in would decline about of automotive point I little Australasia’s I in slowing Canada bit talked And and we automotive Australasia. margins part Yes. that it’s the

second expect want to almost and going that, we’re certainly those of we’re that for comping at definitely good SG&A timing so minor, margins, six very is say and down. we It in it was satisfied our half for the of U.S. of was improve margins flat getting Some the performance. see some running both remember, sit really But and X.X% flattish that. not leverage, are U.S. pretty we’re to months businesses. we automotive improvement out and having we’re to and operating said slightly

a looking there's group that is number things that of So, at.

we’re six last Paul facilities with You look from number it and modules, they at for of facilities North automotive we that [vertical and using. and U.S. facilities mentioned several the standpoint. [goods conveyor consolidation orders person] American and the specifically, In with its things months, like we’ve automation. as that looking rationalization less] a mechanism, Canada both know are mechanized in got a facilities, to

Paul mentioned Additionally, our transformation digital functional at about IT areas, think looking IT infrastructure. so of a really we’re technology,

so functions, have, things we’re like technologies centers data the So, office leveraging networking, organizations, that we group. of best and cloud, a back sales leadership, optimize the on things robotics, number number new we working as a can of

Paul Donahue

structure work tag on comments, at I teams reduce I ask us Carol’s GPC. as to have well, just you at team our Seth, been this of our you overall would know, really and Day cost hard you our question And Invest that would would tell at

position Carol to reviewing presentation, unveil of in you much a those begin be our and some as We’re you. of QX we’ll is detailed plans call I aspect every for to we’re – mentioned, What tell would more our during business. better

Seth Basham

Thanks forward look it. to lot. a I Wonderful.

Paul Donahue

welcome. You’re

Operator

Your next from from Please go Jefferies. Jordan ahead. Bret question if

Bret Jordan

Hi, good morning.

Carol Yancey

Good morning.

Bret Jordan

but them of Most couple have I guess. a been cleanups, asked, of

could tell West Northeast, did? East, Northwest regions, you four The how and us other the

Paul Donahue

you and the those of line. side bad to seeing of of between, know, challenges as our in fine of to know, you parts already – on most strength the I Yes. But, weather know, up we – right Happy and you looked Southern are in mentioned just X.X% were in well. of, are the Where X you our performed did at we where our Bret. as most Mid-Atlantic. to, despite so. we’re guys parts the side the X West, low see of the Central bit the comps, or really The know, The regions more high on – a Midwest – Southern most and the Northeast the – country

tell the narrowed you a know, that we disparity really quarter. I this would regions, kind see amongst not sometimes – what range you So, huge huge that – but of

of business and look, the thing mean some is divisions – our our I our The did bread-and-butter consistent would that’s and I across of – that see are which all of of our other we’re in DIFM see encouraged regions, we our that Bret, strengthening was initiatives. all really amongst all DIFM mention, to we

teams begin take Our been have hold. working so really to on hard

Bret Jordan

of as weather guess of I we’re looking guess you you’ve versus at sort call are then the we weight softness the and And and skewed impact sort could great. regionally Europe, more economies winter, less and as but there? Okay, out impactful? I economy, weather the the – we obviously have the we And from some have of further is performance impactful, get economy where weather

Paul Donahue

You we so, impact. know weather about had the earlier about U.S. – the and question call Bret, on last the we talked bit a little that

significant it’s really You it’s know, pinpoint to a do know We exactly. hard factor. Bret,

of back you this a If their ago, on by the coldest followed of they one UK, year on record. to record had in winters one the warmest year winters certainly

last I back of which number, tell significant uptick us heat in and seeing So, prospects the an we It’s the the a we but with that it about compete. an had number very key in impact. that to over pinpoint we've better half seen in exact are the records weeks, got feeling would you our difficult business that’s markets

Bret Jordan

Okay, you. great. Thank

Paul Donahue

Bret. welcome, You’re

Operator

ahead. America. of Bank from Suzuki Elizabeth from is question next Your Please go

Elizabeth Suzuki

you. thank Hi,

seen and on you’ve there's a longer-term even there, weakness. you just Just you made Europe perhaps acquisition though another some temporary question know – because

what your Just overall more think you for make for a of dynamics you vehicle And, results is quarters? to impact it much to be going are that to attractive of couple than an weakness in curious market continue fleet know, how the long-term? that you

Paul Donahue

Yes. Liz. question, Great

about seen over the you’ve weeks. We’re the acquisitions number still of very the European aftermarket that bullish additional hence and on read and last

all we that along The announced the Todd. is a yesterday, will seen we us heavy-duty Todd seeing that that strong, the slowdown have business at truck in heavy-duty in know, hold well player. despite, position market. if And have Todd X of in locations. vehicle our know combination of we’re They we’ve the France You heavy-duty footprint individually, we existing across part you with XX supplier our as up very the plus Number one those light look France. the just Europe

So, at based we of is And we of they've U.S., is that the you been which acquisition it], in in think across are long We similar other not the the good have demographics Todd. as of not we the marketplace look some and the term with part It is excitement and of size you lost similar. the know, and slowdown, age PartsPoint, feel vehicle about aftermarket incredibly market good the impacted Belgium our is, Netherlands for Europe to about fragmented half just know, as will less year. we that faced we and, The the are them acquisition the as we with European past we vehicle our are believe right in and the second stronghold. markets about [part the feel – get again, as largely we’ll transitory fine. be we of issues and the go the now, their through

Carol Yancey

margin. other And global a tremendous The very procurement Europe team from a Liz impactful is synergy. about and the has one thing job done

for and this the improvement So, is gross have the they we SG&A it’s again at opportunities look decline. overall when impactful us, where work through synergies really core Europe, they margin some results volume in as to you with margin our are tracking with our and that sales

see way out. its that we longer-term So, working

Elizabeth Suzuki

typically quick little a that’s U.S. addressable sweet market the Okay, in your just one or very What vehicles spot bit And to enter it similar different? is one. Is age the helpful. Europe? more do

Paul Donahue

the warranty No, of in out as the vehicles in Europe it’s they similar very those going and similar Liz. are U.S. When are warranties are

would European I business. about, retail other almost is to there little mention the no is The thing market very

European. DIFM aftermarket rules the really So, in

similar would the one boost now in will launch market, the in half going that to of of the plans key European team and half a very categories, the the our we’re year. the our real launch that’s the in on to initiatives product second second Europe in and give UK mention, private year we’ve So, the in brand NAPA in to place got launched be to that U.S., three I we of it is think

Elizabeth Suzuki

Great. Thanks very much.

Paul Donahue

You’re welcome.

Operator

Your question ISI. ahead. Michael next go is Montani from Please from Evercore

Michael Montani

taking the for thanks question. guys, Hi

I clarity commercial add comps were missed provide to this, had could extra with comp and the sorry but trajectory, I wanted if did U.S. quarter? the you if Just then the overall I’m DIY some around in

Paul Donahue

the that not both for tell positive business and significantly I did outperformed you that were that quarter. quarter. We tell provide also Mike DIFM our I would DIFM DIY would you the and DIY in

Michael Montani

auto, was if but then that? then and U.S. correctly, closures think growth more have there Okay, was heard I store comp there, other or said that X.X% rationalization there like you a caused a could total I there in X%

Paul Donahue

We see Yes we we I company catch, QX, part XXXX, you’re plus mix the outpacing in X% was of have independent believe consecutive that but would to going likely comp. that move year. to case our U.S. quarter first half we QX in though that X% good that a second the and see pleased unusual with was quarter was a you we’re up we’re the trend our underperforming it’s comp XX necessary what and of where that, plus have we or even talked slowing that’s in they of little fourth but much the not right, that store our and stores that’s and that’s were a and total up I really against, Mike in the factor tell part about business, an were in guess see that we the owned, it did are I and about our ongoing QX business. and whether had owned that comps total, in were closures

Michael Montani

I up X.X% this drive then to basically traffic heard the year? X.X% was tariffs, and Thanks. same if so could through And ticket, on from I ticket the that the was traffic over

Paul Donahue

saw our unfortunately and as we to what over close ticket I just to which in up inclement we is of a attribute this April as impact average Mike honestly have average to what into to that X rain when we an bit, traffic up the quarter, foot the – saw in that know and bit that year-over-year, quarters weather we that, you basket the would you going we or down some a X%, Well much impact X tell was May last our traffic see QX. stores is we June, was early we our you year-over-year; and reversals going and unfortunately, of significantly saw saw saw, even so foot it’s in was late that’s again

Michael Montani

because U.S. The trying I EBIT think last gross to the us heard was XX just bips margin is I was with and automotive that plus so out? thing the I was ones, just total X.X for that automotive maybe I one with down understand can the company if comp, on had slightly reconcile you parse correctly if up help of the was even stronger and and

Carol Yancey

Yes.

improvement margin automotive percentage inflationary the protect about, to really the margin this So, to in you’re again, in on this are right, and and environment team and terrific quarter tariff our pass margin. also be gross and those has maintain through, have done gross able we’ve pleased talked and job U.S. a we gross

and actually, out those year mean, in cyber weighing about elevated The investment, things ago, things digits. I on year-to-date of digital low about this I we’ve doing and talked with are was SG&A I year is pricing in facilities double and payroll CapEx, year freight, a automation you X% technology, our at where pay investment, we increased and spend, were we up with we call when freight our and look level freight remember SG&A. see up things We that call talked a and is, investments roll think ago IT ago security, some we’re it all payroll of their I was these

freight. to sitting X% like and in X% payroll to are They X% X% more for

cost those have helped, that we that’s have moderated of some in of our SG&A. and things investments So, these the is still but

maybe and if see half a X%, be we should So, hopefully they should better again second bit similar second half. be that around continue comps the in

Michael Montani

so much. Great. Thanks

Paul Donahue

Thanks Michael.

Operator

Our next go from is Bottiglieri here Please Chris question Wolfe Research. from ahead.

Chris Bottiglieri

on, I part you in assuming left wanted just slip off was Thanks tongue Hi. good Wasn't questions. the the that back X% you are something? the a sure half? for or taking

Carol Yancey

U.S. comps?

Chris Bottiglieri

Yes.

Carol Yancey

yes. That’s fair,

Chris Bottiglieri

is wanted from and structure would the If France basis point to Europe, XX% recall I of business on your I then in a and And little European that’s margins decline, different a in helpful. That’s little it’s only business Okay. margins XXX bit Europe. bit. accounting bips. rest the were In roughly of XX dig down that imply

than So, decline on like QX. macro it basis quarter is given sounds XXX a lot points environment weakening last that better the

try Let’s disproportionate impact would that a if if decline, understand helpful? margin you was can France way contextualize to that any be of

Carol Yancey

We those to impact do think, that’s this, in things factors going does of some hope was that place, place that things team first toughest the disproportionate but QX, the Again, of in moderate market Yes. we’ve the in on should one get that, margins they’re markets quarter that specifics from I saw second looking of modelled France a a on that Paul say, mean, not the we France what because was of and number of half into effect. for and in but the heard year, a for number. are in was half we're some exact was a you number to difficult in to the of the a and take it them. at of see that and and things has difficult we comp putting

Chris Bottiglieri

a or cut And just EPS know cut comments, helpful. on backing price I was million. into think cash I at the free like prepared it [with you the cash less. flow, kind free you $XXX EBITDA] seems The this guide That's looks but flow touched then lot of

plan, capital, sense to working relative any the So, all is CapEx free there would trying more non-GAAP as going that, items flow like cash cash the to way are get driving you cut of helpful? contextualize up a it can just be

Carol Yancey

Yes.

capital. mean The I it’s these around maybe right. think, I more modified would come. XXX I So, say timing it terms you’re around when working of We slightly, million.

terms then or days XXX, we and to negotiate that it to are be don't we with have XXX six months. that we our we say days let's negotiate another So, XXX supplier for see

So, the of capital timing is of working that. some the into what went

at categories, million, some whole what in it's time. was some been that were and of really – which the the changes slight mostly but So we other there looked CapEx, is working capital. $XXX

Chris Bottiglieri

you. Got

same helpful? one business a defensive that downturn? how you're tell cyclicality in final transitory compared then initially, your and does perform goes maybe a Just get be positive And to there's kind basis, Okay. stays last industry for we're are a contextualize, is like of because cyclical. way branch and is. lot or Or that sense better there But performed a that the in like it's question. this dealing this if get on way your today soon? is away of dissensitive, is where business seeing other European economic even the to to at like this did would it growth to weakness This U.S. with. trying data Any how historically factors that you very European I Europe and any internally look understand like

Paul Donahue

earlier in business at question shot aftermarket. the Chris, years better. to management believe in met, And of running as confluence very was U.S. been what Europe that it's I we saw, to unprecedented do I'll marketplace, similar European they to running a going have get team, a been it. similar we and our The we in Chris, mentioned who the take It which talk Look, The is aftermarket nature in for they've very QX, that time nature. all Yes. saw QX, to bit was in think is business. senior as seen in you've an they I not XX what a they've events.

economy. the in slowdown the Certainly,

the us around those that with – We year Some incredibly factors Vests that to an and in team. don't with certainly, that and disruptions geopolitical led Yellow coupled unfortunately of into a mild certainly issues we'll at improve well we're quarter of as the winter all and really soft for expecting second hit the the to once a and see XXXX. half situation, of long-term and

Carol Yancey

think We as improvements as think offset initiatives of well their and help we look their ahead, too, cost which we thing. I integration see final from will the one will And acquisitions, as this.

Chris Bottiglieri

you. Got for you the thank time. Makes Alright, sense.

Paul Donahue

Chris. Thanks,

Operator

concludes to closing This like management I'd floor question-and-answer to session. the over back comments. turn any today's for

Carol Yancey

forward great your for at you thank look to you, a appreciate support and in to QX day. We call. have Genuine our Company, and Parts we in interest you to talking like and Thank today's call. your participation We'd

Operator

concludes This today's teleconference.

participation. time. lines You your you at disconnect Thank may this your for again

Genuine Parts (GPC) 18 Jul 192019 Q2 Earnings call transcript