Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen. Welcome to the Genuine Parts Company Second Quarter 2023 Earnings Conference Call.

Today's call is being recorded. [Operator Instructions]. At this time, I would like to turn the conference over to Sid Jones, Senior Vice President of Investor Relations. sir. ahead, go Please

Sidney Jones

thank Company joining Conference Second and the Call. today Genuine Parts Quarter you morning, us for for Good XXXX Earnings

our Chief Chief Relations, us. Operating With are and Director, Bert Officer; share Investor to Vice Officer; Tim Stengel, Chairman President Walsh, Executive Donahue, Senior and Will and me joined Executive Officer; and has President their our also Nappier, Chief Financial today Paul remarks our

in measures, results found earnings on addition be referred slide be In include as financial principles. this presentation press Genuine to our the generally under release, discussion morning's provided accepted advised may Please accounting of these Investors be the may supplemental a reported the of Parts A to release. press call certain website. during which of reconciliation today's non-GAAP page can is measures Company this

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

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

Paul Donahue

to you, XXXX Thank our morning. and Sid, earnings good Welcome quarter second conference call.

to with pleased record growth. sales report quarter are another solid earnings We and double-digit adjusted

of and advantages the benefit diversity value competitive Our mix GPC our in global company of believe second geographic and the marketplace. automotive businesses quarter and again differentiate the once industrial and which that highlights are our we

billion, adjusted same generating year. an basis increase cash strong adjusted the XX.X% to support X.X% share flow second points quarter sheet per while segment our growth finally, and growth. quarter XXth our XX results an consecutive A Earnings capital of Total prior from year, solid allocation of balance from margin few of of continue company maintain from increase last include: our a and of initiatives earnings $X.XX, share last the and XX.X% highlights $X.X double-digit And of sales per quarter increase of year. an Total earnings from we to priorities.

very team our And profile approach X strategic and and to performance. fragmented significant we GPC Investor cash our initiatives is on believe our March. opportunities we our to Day flow our shareholders. expand large We to margin returns markets strong grow remains global in strategic our see One strong generate Our and support contributing highlighted in focused while business, compete delivering our the financial at investments to

a investments navigate believe dynamic for business environment, macro focused long-term strong to continue fundamentals, our we execution, GPC and we As industry success. in position our

we the our well continues products, basis as trends the our demand be position, relative markets a slowed, growth first Industrial solid of end while share quarter bode to and our indicators of services continued And along believe we strong the quarter, exceptional. growth diversity certain sales second rate on with for tempered have prospects. through Motion's rate Looking a economic our X-year segment, market even to the at held bit as growth expected.

of our Will, opportunities driving hear will and margin efficiency team's In segment. focus growth as productivity And and is reshoring addition, in domestic Motion. you provide expansion future for industries opportunity from Industrial the the on significant manufacturing significant

markets. our from benefit to continues business automotive the geographic global broad Our diversity of

continues DIY to growth. DIFM of segment our customer outpace In of is we DIFM well customers growth as believe XX% positions automotive sales, our supporting long sales sales to the which addition, history global us

experienced During our U.S. the businesses strong our delivered Automotive growth, business growth. low second mid-single international quarter, double-digit while to single-digit automotive

underlying prices increasing with demand. for fleet, trends and aging rising contributing interest aftermarket complex and the miles of automotive rates, high remain to vehicle driven fundamentals favorable such continued The as vehicles, and all

raising dynamic, near-term with strong further. we for year-to-date Bert will growth once are And second share, the performance. discuss again earnings which pleased environment quarter, outlook While in are we the the remains earnings our our with XXXX very per

confident continue business remain and we to targets the strategic our forward, strengthen look repurchases. our long-term and share our while capital to we'll to in invest plans, achieve and and near- we dividend shareholders returning through As financial both

right first So our Workday. outstanding of in the implementation system in platform our of highlight North In modernization Continuing if completed IT right I the early our our of in with tools implementation demonstrate phase the HR and teams closing, the July, America. our I'd of and around teams to didn't Workday of be remiss QX work technology. we platforms HR and the the supporting

showcasing Our talent IT schedule, HR and of GPC technology our exceptional of the ahead outcome, One an well and initiatives. benefits teams delivered

So continued before teammates I want to over it thank Will, their GPC work of and dedication to we our XX,XXX hard turn each to for customers world. around our the serving

to over I'll Will. that, with So the call turn

Will Stengel

the Paul. I'd team to We supply all with GPC help that team world the moving. shareholder well thank all complemented value. day GPC like partners take together hard work commitment customers. also disciplined supplier and ongoing the chain success you, a to to M&A and sales talent global work on keep our of solutions We our culture, and their create care do priorities, everyone. every Good effectiveness, We foundational focus by our emerging customers with this customer for morning, to One Thank as including appreciate as serving as strategy. technology, our technology,

earned President the of his entire X he's the many career wish his the his congratulate as years Kevin company. retirement. We're Genuine very an would Automotive He Parts our values the Company significant leader mentor been for embodies to world. amazing the U.S. last business. and the of GPC behalf to Kevin and contributions of On Herron the like retirement to best over years, deeply grateful him inspirational and well-deserved including all roles team, we around in in his XX-year on an success GPC at after

with familiarity congratulate a industrial businesses also America across candidate Randy With and role. of the as North to both Group new performance. leadership and depth Automotive with GPC of the track expertise Kevin's while of at One retirement, his and distribution automotive role, promotion for ideal oversee relevant continue GPC responsibility President, leverage is will a July our the across on to transition North to Breaux President America, GPC. Randy and teammates the the make assuming represents record proven as team the leader power talent industries, success we Randy stakeholders effective day-to-day of Group. U.S. the our In Xst. His Motion him strategies we want This

April Total last X Comparable Industrial million was Global billion, sales quarter $X.X for The an through June. with with the and The to second again the the served sales broad-based X.X% increase of our both was business product prior being the increased positive strongest gains were second turning all relatively $XXX industries quarter, growth May year. followed from posting consistent cadence at in major Motion versus year. categories growth Now month mid-single-digit in growth quarter sales segments. or by X.X%. in the and

chemicals, gas. such from saw iron we as steel, and strength products, quarter, and and mining food industries oil the During

and including inside growth-focused Motion all to make they're continues profitable tech supply helping market its and outside chain with to addition, pricing, win sales, strategies, progress In initiatives excellent e-commerce, share.

platform total nearly nearly across its daily a Motion increase As XXXX, an daily sales. of in XX% since sales twofold average e-commerce now example, seen which represent Motion has

are positive In availability Motion second delivering the delivered business strong and culture, Asia across Customer-centric excellence and performance sales Pac, double-digit results. also growth. operational quarter our inventory initiatives in profit and with talent

basis Industrial segment and profit rigor was North driven and improvement XX.X% in same of increase The America a the last initiatives. the $XXX disciplined XXX quarter million Australasia execution or the period second in point Industrial was representing in strategic sales, year. from excellent operating both of by profit

substantially KDG million year, In addition, synergies of team North $XX we X-year merger Motion branch exceed complete synergy the expect related plans. The and this ahead the ahead consolidation commitment initial to to plans. by efforts end well continues with of to well America the also of realize initial And our acquisition. the is team

to X.X%, drive increased by believe saw U.S. We single-digit growth low growth low in favorable which automotive We global from quarter solid to execution, in second team were high global to of in million the U.S. encouraged ranging moderate in global the growth in in from our profitable double-digit remain mid-single-digit posted as outside in automotive quarter, Automotive. to total basis, $X.X mid-single-digit sales sales comparable an Total period our first automotive Global billion, X.X% diversification benefited Similar will second the growth. quarter. growth Turning or to continue the first same low the businesses Europe. a we XXXX. inflation sales to $XXX versus single-digit from and the fundamentals growth sales local the double-digit quarter On increase to currency.

segment $XXX in compared Global the up margin the period million, X.X% XXXX. XXXX. was Automotive versus segment And in was same to operating X.X% profit X.X% quarter second in

As U.S. an at in of we benefit second margin actions the Automotive, quarter. half to improvement and year. impact actions in the implemented reflects an expected, these increased Automotive's the first quarter showed improvement the The of versus the cost expect see the of second

geography. early April as X% we weekend. July with overview trends up an we're X% sales of and performance That business comparable June, the the stronger second automotive Now May by grew turn In particularly the in while U.S., said, let's quarter. holiday trends thus automotive July. by far the were encouraged our for months to lagged approximately sales in headed Xth into growth the

quarter all in to Sales growth batteries outpacing Growth weather. the in West ride retail. of regions and with we in offset had and relatively customers and both control categories average. strength the commercial sluggish to second broadly, commercial year heating and and exhaust fluids, such slow the growth impact with U.S. as was retail the East categories the core our filters, which to various regions were the start with from above due consistent positive More across recovering after cooling,

sales single-digit saw and increases Our outperforming segments government growth. high customer with quarter across this commercial business with again most fleet

X%. grew local currency of second during In quarter with the Canada, approximately in sales growth sales X% comparable approximately

in Our Canadian performance paint all and digits. several were double and heating equipment, body like up cooling, which categories reflects tools strong and of and growth

Our automotive and both quarter. the heavy-duty growth well, posting performed second in mid-single-digit businesses

our attractive quarter, wildfires and long-term market destructive growth industry due executed the the we fundamentals given team to in well Canadian initiatives. the especially leading and solid see for across Our continue gain share position, to opportunities country

sales XX% our in exceptional sales comparable team quarter approximately In Europe, XX%. approximately of of and delivered growth currency with another automotive total local growth

ongoing continue We strong our market the our across markets key European growth to of due execution initiatives. and drive to gains share

quarter, For double-digit geographies. delivered the each growth our we of to mid-single-digit across second

business the region. existing accounts in with to wallet share our win expand key As continue the with and of brand drive higher teams accounts, NAPA

NAPA-branded of sales team in The in products to track XXX is deliver EUR XXXX. on million

strategically European In addition, scale, across markets to position Recent Drive industry bolt-on in our that growing aftermarket. in and plans leverage team of our offering are our we we the continue discipline next roll Europe margins. acquisitions tracking growth expand our EV ahead the with and lead out integrate synergy as to

Iberian approximately example, the of was our XX% our expectations. significantly For markets quarter, ahead growth during initial comparable in second

Asia to approximately business, strategically business of growth continues In local commercial proposition. second in automotive increased the the to sales sales retail Pac approximately the currency team X% the in in The well its outpacing value second commercial and invest X%. with quarter retail customer in Both sales performed extend with quarter. comparable

long-term distribution recent profitable Zealand drive For of centers New Auckland, example, in productivity. will opening Melbourne, and growth and the Australia

acquisitions strategic with geographies. existing growth automotive acquisitions markets shareholder share completed create small our market and several density organic bolt-on store in consisting complement We capture that local of increased primarily fragmented to value. in We groups

to leadership our remains pursue Our transactions and long-term that create acquisition remain value. positions extend pipeline disciplined we active, and will

GPC dynamic closing, a we year second growth through plans environment. the quarter the for team the our In balance confident global delivered and results, strong of in continued remain despite

Our company diversification. mix strategic and our from global business benefiting geographic is

leadership and and solutions, Our technology teams to chain customer emerging and enhance remain that create investments customer technology, to capabilities continue in We're initiatives people, strategic will our that focused value. to positions. our deliver execute supply our solutions committed

entire performance. team hard With call I'll that, GPC you turn Bert. to to again for Thank excellent over work the and the the

Bert Nappier

and Thank to you, everyone today. thanks joining for us Will,

through quarter our perform walk teams And Our and pleased I'm highlights performance. through dynamic the to operate continue level of environment. to at high second a you this

of on of started details we second XXXX. to nonrecurring items our I months the and like that note get quarter I no in had would X results, Before the

XXXX. This share. including million acquisitions. Our however, per to of single-digit GPC delivered our and Real in revenues in certain of benefit offset comparisons primarily to X.X% advantage currency. to excludes was $XX by partially value The sale reflects balanced quarter the year, $XXX $X.XX another diluted or KDG a which contribution again the portfolio represented low items impact second in billion XXXX, highlighted levels a or diversification sales to the record. improvement a related Estate the S.P. mid-single-digit foreign prior net million integration comparable items in global of quarterly increased were and and of Richards $X.X sales, a nonrecurring from inflation These X.X% X.X% unfavorable we of as X.X% and

Our increase XX around gross XX And basis our full XX strategic basis year-over-year. of an year, the points last we margin results. year, was our the sourcing estimate believe points to the initiatives. XX.X%, XXXX, margin prior continue initiatives for a of by XX of to improvement to our of and key from improve margin expect quarter pricing now from point from the XXX impact drive gross to We ongoing will execution rate basis improvement driven favorable strong gross second

total SG&A approximately and which key planned, last expenses year few Our quarter investments in sales second deleverage the XX.X% compares total teams XX points X in sales. or expenses from in X% technology. spending a year-over-year. factors, basis in in quarter to wages of of and This adjusted our of of attributable operating primarily second is were deleverage were and nonoperating of quarter The and to XX.X% for billion, benefits increased in the at the second XXXX adjusted in expenses $X.X up our

IT the showcased XX SG&A second we the quarter. by points Investor initiatives and in at in digital impacted investments Day, Our basis

a addition, in points, wages. pressure benefits for of basis In team feat our on planned and investments impacted as inflationary by of SG&A wages XX members this much

basis repeat Finally, in stock U.S. charges of actions our automotive improvement both true-up during would the business not retirement-eligible we we for quarter, XX the of related expense employees and future. recorded to which points, a at to compensation cost totaling expect

continue of team we IT. year, our driven full XX the to SG&A points, basis For XX and in deleverage to by investments expect members

and point expansion. sixth our growth a last margin consecutive quarter and XX.X%. drove $XXX profit XX up second profit million, was increase improvement gross margin quarter Our from XX.X%, of margin year total segment Segment basis of

Automotive While expansion, Automotive in we QX margin to business. were due segment Global our lower overall delivered strong in margins our in U.S. pressure

business we profitability the and the discussed to in quarter, the in first slow would the the following challenged remain we As it did. second start that quarter, year, anticipated of this

the are in the margin our the great segment as However, teams progress the making in by from sequential quarter evidenced expansion acceleration gross and quarter to the rate improvement first second margins. of

Will of continue costs mentioned address to profitability. this cost improvement business to improve elevated and we are the actions operating earlier, As in levels executing to

operational initiatives remainder these execution broad in combined and efficiencies of costs and ongoing improvement actions, for of We with expect business, on the our across productivity of the discipline our strategic drive base GPC. further to

This compares This an per true $XXX million $X.XX per quarter a of diluted diluted earnings XXth XXXX, of represents and share. or adjusted work was quarter to share consecutive profitability. $X.XX double-digit increase income of million $XXX our and to to focus hard second testament drive in growth XX.X%. is continued our adjusted net or team's Our our income net

under XXXX included agreement. of our flow that for first a million months in generated to our of operations AR receivables the X in $XXX Recall our cash in Turning $XXX cash flows. cash million sales We XXXX. from sale

in $XXX closed the and billion free second available flow with the of For we cash X months first XXXX, quarter was liquidity. $X million,

to is EBITDA X adjusted range which targeted our to to compares debt X.Xx, X.Xx. Our of

and well growth opportunities to flexibility across financial of remain strength advantage take We GPC. future the with positioned

unchanged. capital share business capital in for through our through priorities allocation of expenditures our the M&A investment remain and and Our And and capital includes repurchases. to return key shareholders dividends

growth we targets a remain modernization including $XXX we for XXXX, to million year-to-date Acquisitions forward. have $XXX generate our believe robust moving second expenditures, continue element our a acquisition and $XXX in we strategy, continue invested During pipeline growth support businesses. the and of initiatives capital business to of the for million investments acquisitions, will our key of invested quarter. million These and drive the in we

we far share $XXX in and paid to to of used shareholders in XXXX, also form repurchases. and cash shareholders in have dividends returned repurchase dividends cash million million This includes to Thus the $XXX $XXX in our XXX,XXX shares. million

As we positioned half enter all our well to cycles. capital second the of we XXXX, effectively are deploy through business

Turning outlook XXXX. to for our

April guidance release full year We earnings are on in our our updating provided XXth. previously

This our XXXX. approximately earnings XX.X% increase of $X.XX, previous We for $X.XX. a $X.XX raising $X.XX are guidance to $X.XX per of a to to increase from from represents to XX% our of diluted share an and guidance range

guidance are XXXX By in sales to the is sales growth unchanged, sales we sales continue range be expect the the the of and to to Automotive total segment, range. following: total in X%. Our to X% we guiding X% for growth to X% also with business segment to X% for X% comparable growth

are For to of to of expect the to we of relative year. the X% we total to also XXXX sales growth continue Industrial sales first in X% the X%, and moderate to with segment, sales X% expecting increase, second the half growth comparable half

interest. Turning to a other items few of

cash includes range cash free of to flow billion million in operations a billion $X.X of guidance a from to and range $X.X $XXX in $X Our billion.

$XXX includes and incremental of $XXX year, CapEx investments million for the others. full for among chain, plan technology to in continue supply We to million which

to around staying teams half serving this have are our our customers we their on Overall, dynamic demonstrated Through our first ability world. while be results. the focused very pleased environment, with agile

believe execute to mix, and global with size outlook execution teams XXXX talent, is initiatives the drive their confidence our and our reflects solid ongoing we per the scale, unique earnings footprint, value proposition. updated have share of differentiated business a for We and results. truly ability and GPC Our our our in

forward it for will look to in few call we turn reporting Paul quarter October. thoughts progress I in to before back Thank address on a questions. We And third Paul? our your our now you. closing

Paul Donahue

Thank you, Bert.

thank get a after his XXXX our the has Relations announced been like today earnings acknowledge many decision moment Before in over to that contributions who and team team closely leading We been Q&A, take best and Sid to Genuine and us. GPC years now family over we Sid XXrd for and exceptional Head retirement. has on the company. service quarterly in has retire to do his we'd the Company Sid XX of Jones, since Tim working his his at into role. Investor look from and marks to call job Sid of very he his forward years Walsh wish Relations will role and new in to having be Investor Xst. We him with year his named a for Tim the will an August Parts

that, with are we your ready So questions. for now

Operator

[Operator Instructions].

Bank of Suzuki Liz from America. comes of question first Our

Elizabeth Suzuki

to you're Sid, going missed. be greatly

we'll miss So a you lot.

Just is U.S. a comp plus the automotive question on X%.

noted it in U.S. DIY. mentioned missed it, the versus that terms that sure for both it globally, of I'm Was have DIFM me DIY You I were case as gave DIY the the and if you outpacing detail positive may DIFM. You well? for do U.S. and with that just not in

Will Stengel

the in group quarter. the We Liz, U.S. outperformed DIFM for did retail Automotive

Elizabeth Suzuki

is after operating And changed a healthy question a we should that decent XQ about KDG there seasonality Okay. then another or that keep very we in there. have mean I And rate Great. think No, going margin should is have really one forward? Industrial on any the that's the run The acquisition? way business. may mind margins just been helpful.

Bert Nappier

for you full for the think don't I proxy (ph) as [unparsed] have QX Bert. it's the industrial year. Liz,

in on for business business of we a proxy, long commented, still still to still we're we we in rate for use is year Day, the will that to As the at go Having here second said see -- that we've thrilled QX see we expansion rate performed have you can do margin industrial of use growth the the half. Industrial look that But with as that the and shared that, margin a get not work segment. full expansion for -- as moderating year. full proxy where to but lot we as Investor a to but grow continue would term XX.X%

Operator

Horvers Chris from JPMorgan. comes question of next The

Christopher Horvers

and the miss implied following JPMorgan. was down. about My the will on I comp, from U.S. Horvers that your the all you're you on in maybe Sid up and June you much, endeavors. NAPA Chris first we congratulations best you in think running -- retirement just and U.S. April future imply X question your that very is a

was mid. in half? back what July low down in thinking encouraged and you to about by U.S. sort you're talk So seeing that And you're how June comps about the NAPA you're of can

Will Stengel

through, prepared Yes, we May, Chris, so automotive, through growth. in remarks. stronger happy and noted kind of you you walk the But quarter, comments of single-digit and I'll walk just as months maybe April that the to low were in for the U.S. some the had

The first together of to comp towards month, the that the U.S. a puts which X half Automotive. tapering end and of X June, saw in June we the fact, was quarter, to for the flattish, and be the then left the a solid start month

seen to extreme month an momentum that we're it's quarter. that the probably build the on going start -- July. plan to and had by early a month, is call positive in whole heat through some to have have positive improvement we've impact encouraged We Obviously, the the while to

we for outperformance asked, versus prepared in strength in which be batteries just we fleet quarter. do-it-for-me categories in positive grew and continue in the our As are directions. mentioned Liz filters, both to remarks, which in us. important government segment, retail, the And that and we growing nicely about saw fluids, bullish Good

doing merchandising So in those things we're of a some excited about the we're standpoint from categories.

in in the we overly the just expected given our to, second some quarter It that showed patterns leadership categories cooling the than He's about we've and here of in heating We're us weeks. to got them of perform excited for we're way second what in business. U.S. Obviously, quarter working potential about didn't excited surprise an working the place we market. first wasn't the the now total teams. a weather wasn't it think been couple I we And in Randy's warm given. we're more in think aggregate the the field out with on the But quarter. the for

there's momentum positive and a think there. lot I of energy

Gross side house. pricing cost. be and a about, margin, Also the team sourcing to proud execution, talked quick Bert of as all very of great the piece to continues on of and their adjustments things both the

So they're intensity lot a operating importantly, with the of investing business And in focus. for term. and long the we're

actions making sure long-term balancing that So we're with near-term potential.

So in the aggregate, push the year, a working of lot to be continue proud proud about what the second grind the on. half but team. the of We're going and to we're through

Paul Donahue

right And just as I miles still that, would Chris, prices to industry the are solid going the the tag moderate bit. of a gas -- on driven, in that fundamentals direction

New we're soft historic across seeing sales to international And being business numbers. as same still well. compared car a the our bit

team America, So in had rock had And Asia across fundamentals reported the solid. a North team Pac, also there, as Zealand our another strong same Europe we really Australia, our quarter. the phenomenal Many double-digit of here New in quarter, growth. strong

move of So through back are solid. we automotive fundamentals still forward as And the rock see improvement certainly half we the of year.

Christopher Horvers

a then quite question I impressive. gross And is XX.X% margin. on great. Sounds follow-up mean the

was second lower. a If gross in margin. back the for even a lot on the that could around that you is anything of proxy XQ perhaps, an Or But is area performance is from? margin know look it perhaps quarter unsustainable was level the you gross the XX% is the you year quarter? historically, reasonable there in grow over sort a second And is think this destination? I time, do

Bert Nappier

had We it's quarters, you Look, clean the no this the around. had Chris, I In we couple it's some past, a quarter we've or from in gross mix. number the I've things had given offsets inflation great about of offsets time of for whether We the Bert. think margin. talked here. past a

So that this doing work economic the environment with team we've pressures there. is the important and just when thrilled different in we're the got out all so

the right right on the at great inventory the time. and getting place got we've right So in a sourcing focus

have also the pricing on across business. happening all We great work of

the XX.X%, work. so I is really, point to And quarter for basis that of XXX reflection improvement a think really hard up

prisms, where stay number focused just through yet continue can pricing going ultimately call X and going not that to to We're those ball end to through margin expansion sourcing. the on gross I'm up. on

As remarks, we're for more of that on where this to We XX basis XX I said points to for got it planning improvement, been in XX and bullish XX year. had my basis be we've prepared to can originally points.

Within that, from the the a freight, We benefit us for we do our have benefit which again, of see of ocean initiatives. a strategic here for second bit positive turning execution in in modeled little half.

the So or point those are call either foreseen from inflation FX at this no X impact things I'd out really with or mix.

Operator

comes Ciccarelli question Scot from next of Truist. The

Scot Ciccarelli

on follow-up Christopher's have a I question.

of your or really the slowdown seen we've from any few the headwind do competitors in experienced So strong you've would you to in XQ? as auto, U.S. you given some of a weather just think the there's share point shifts results occurring

Will Stengel

Yes, as data always every team category are. act We feel that information. about month. we share we We every third-party on independent about look we week are. We Scot, We feel by review a where it good don't where and any use We study shifts. there's the think good it analytics. at and and

that share no, So happening we think don't there's loss here.

We against. strategies category have executing specific by we're that

and And category level, be can so the science of that's category art but things, part different all quite at of the management. story a

in marketplace. make teams really data to winning honest working we're are that proud we the keep of said, what use independent on. to ourselves And So I sure as the

Scot Ciccarelli

Okay.

be of some delta due could differences maybe to the potentially? geographic So

Will Stengel

When you say geography U.S. mean you geographic, differences?

Scot Ciccarelli

like positive both stronger Well, West, very what DIY South, and strongly, on side, differentiation you have if comp, no. we commercial. I mean, attribute like within the commercial a had results X% had the your U.S., in from And results, significant the like you? was -- So we weaker up like obviously, potentially right? in see specifically the your you -- or business, could in did like potentially on neither geographic

Will Stengel

and customers and which prepared don't quarter, that rates in start we really X the weather, and got recovery second slow region. not dynamics. difference I for across regions. my materially the based There's West, specific on But our saw are regions. by The planned And a expected by to said see bear. a Northeast by difference we saw in come as their though, we different. We remarks, not region there's material growth We've a material driven themselves, always

Scot Ciccarelli

spike a or that item drivers should main in then And line item. housekeeping we the actions you the comp expect of to it. half? million the true-up. Got that highlighted Were and for back quick $XX just guys And the cost in stock The corporate so they moderate expense?

Bert Nappier

it's take expense on items corporate increase X the other true-up we have the on result and the as I'll the of in comp actions. the Look, cost one Scot, noted, did a Bert. one. you that stock an

The a other little XX-Q, today. this if you in to one XX-Q, you obscured quarter a on from is take later will the corporate, the but chance good read color get either the first contributing the filed be some and thing to that through that or

and we being a our got environment functions spent pocket, that of items one globally. management a this to the makes run transfer which look bit those little of a more We did functions corporate right felt pocket, that a in our of the left being on ahead a terms When some finance were create better little liability into cybersecurity it number benefit being them bit at year did actually product the of this cyber bigger. transferred year year. security of of We our last litigation. suited so were But far corporate and we beginning we around cases where that, did and be work related some of to basis, the consolidated also

for guiding million centralization for Longer of look still seeing they than this But seeing move a rates expense year the like in up to year. the $XXX million those target the at revenue. that about functions of we're of to term, cost of operate transfers of them We're I the range. $XXX in for streamlining past. already full the by said, we year corporate and had the those It's lower benefit be we'll X% because and up

Scot Ciccarelli

we've clear. at transfer, to seen level that the of some be is just But of segment Okay. expansion because margin that the cost

Bert Nappier

year-to-date, we're it's small I there, million aggregate. mean $XX pretty costs Yes, talking in about the Scot. totaling

pretty the at But it's of little and size corporate expense negligible the because scale segment stands bigger out a small level. it's very corporate a So move. the at It line. bit of

Operator

comes next of Bret The from Jordan Jefferies. question

Bret Jordan

to say, and you auto guess, Sid Randy. industrial or years? I the the do next, opportunity you that Randy X, both, in X U.S. now in see Congrats run the biggest them where

Will Stengel

loves both a businesses not good Bret, now. is answer. out He's for on and opportunities tough ton field of call the us, but him is and news of us. that's the the a these front He with in has excited the been in Randy question to energy about

So...

Bret Jordan

figure what like too. but you ask I better, to you going was I out you

Will Stengel

He both. He them like wouldn't question? have answered that

Paul Donahue

kids, know, favorite is Which one your Bret? you

Bret Jordan

maybe I think you've price I How How That's about guess, year-over-year, comp easy. the price Question passing some on guess. see half but some from rate The QX. in of about you bar mid-single-digit we price, sort do the low talking inflation We second inflation along got higher, benefit the your do organic of half? suppliers. gets were incremental from cadence? second

Bert Nappier

Yes. it's inflation, Bret. On one, at take I'll start level. kind Bert. a high of that I'll

again saw started inflation I with year, original moderate really in world, U.S. we think thinking QX, its policy effect. the as we think in falling As the and line and having it's around in our desired the I we expected, monetary

see that the CPI can You in U.S. data.

that mid-single low quarter auto, consistently single pretty the industrial. with for That GPC, single stayed has -- mid-single single to second range for single ticked down the high down number digits digits. digit digits industrial ticked mid-single digit on And then GPC from reiterate, whole, for Auto from low and quarter low to inflation has up digit. for to Just low in all the in digits year. single-digit

some falling now. in and probably really started pressure out impact the we and And in all wage actions the a expenses, It's range comment businesses in most and inflationary right and think facing wages. with particularly managing it. pressure in We're was prepared wages, taking on So right what in pronounced we we're with right sitting GPC-specific thought doing offset year. are seeing things operating a that. to comment, That's inflation that my We're to the try all but the remarks. some I when that's mid-single-digit line that business, it's the not

aggregate to single We'll from And in we to digits low going digits single-digit. effect. throughout policy from along Auto to that a close moderate XXXX. to single year desired mid-single think a tick single we will out see have high continue think digits digit close continue low down inflation out for GPC industrial year. to I the the As full is And year. will its ahead, the to the look bounce start will to low

gives a on guidance little not our to year. the it's the of but for you that's update about that for guidance our one-size-fits-all rest factored And our the year. business the how segments, hopefully, So and all into we're a thinking color

Bret Jordan

about change what Okay. in guess, comment pricing I rough pretty peers any one from you And and then auto follow-up question. could your price another pricing one you pure of market. of cadence on 'XX? I in QX competition the guess talked I about in reported year-to-date guess pricing, see,

Paul Donahue

in to thinking are in peers got is right store got for profitably. competitors take It's as maybe respect the We've What our -- competitive we've -- availability. spend dynamics this a of of store on cover We across Ensuring we've really that, big to those right say time our what I'll right small. continue what got all markets, you our do got And tag to still lot foremost, our the Bret. I not We strategies rational. of thought. and I'd going shot you, their a they're tell for business. would huge more of markets, speak we're the then doing to play specific Look, competitors. specific can they've landscape, Yes. Will first and perhaps people Bret, grow and about we to about, markets, to and the ensuring not footprint lots Will. won't our us different the footprint got strategic What by allowing all inventory new markets outlined news. and both at

break-fix can they're helping that customers changing our only America, prop. think the solve It's them. ensuring care we're here not value don't That productive a problems they price? the be we in in taking and We're those model pretty challenges right And part but of changed, Bret. North for part right do. in partner are the quickly really about anytime solve hasn't But now, price. our their shops. That at see soon. of more Sure, our customers we all focused world I with really And market Do the their we a honestly, around good think in right to on their customers. right

to would I don't know if Will, else on? anything from that want So environment there's a comment pricing you

Will Stengel

in just learning would been hence, importantly, the it. couple the are Well, working helpful more say, incredibly years, of and I has it operationally, the And this are as focus is for teams other. on what each teams on investment the globally from last environment

think calls, And great in one we've the all work sharing that so that's about in of our I happening over Europe. automotive. U.S. previous talked We're work in

and the company. margin team very as of total working And performance all similar and benefits so these the the together learnings an in the a environment world gross sharing that's are some of around from

to point data having that we're success. some good a is suggest think, I

this distribution for to of in and going part part we're customers. continue important can we an the it's make it business to and better it especially important navigating it's our of that so invest and at environment, So get decisions right

Operator

Melich of Evercore question The from comes Greg next ISI.

Gregory Melich

business to into number, dealers industrial say to you how then -- business, and Would I NAPA fair on one could did? want And government AutoCare give that a on units. better it comp inflation still on negative be understand us little mid-single X would seeing question U.S. and with think did little to a guidance. wanted the we're non-fleet independent I color follow-up I a auto bit translate and X then more the how just the digits.

Will Stengel

Greg. Yes,

I -- as retail. do not me we don't as it's minus for X% So in got to simple because it

So you've there. got a distinction on transactions

So yourself price, transactions for it tick positive do it expected, up. me, and as it transaction do down

So noisy in that's the X%. bit minus more the than just little aggregate, a

continues it's challenging a the well. perform the parts On to segment the is prop time. other AutoCare with and our of important incredibly Obviously, business value that business,

they're to them with and partnering make that being sure the So navigating productive environment.

the that business to So performed was a that expectations. part of our

Major is customer-specific very a of accounts business. book

in strength think there profitable So way. the partners pockets that a as some of as philosophy and really some of areas important term in about book business we reinforce would our I business it's here opportunity. growing of that well are our through that medium

major rigor bring not and trade-offs about profitable we're thinking so share discipline account between And think our I business. going of in to to lot a the and

a but positive So a in total. aggregate, story, mixed the bit of in

Gregory Melich

company different do materially jobbers? the stores Did than the

Will Stengel

material It see a to close didn't was the performance. in We each And... other. difference pretty

Gregory Melich

okay. Yes,

actually be XX.X% Just got want to but guess do mix year? up Was interpret maybe that industrial. down is to DIY, right. do-it-for-me on that to that obviously Bert? just margins the follow-up that the margin, -- that -- no industrial sure I little I'm difference it. come want -- wrong, they'll was The with not through margin, half assume be bit, But will still the make continue in I we or -- a the I numbers I in for the that back the mean, big make cut. sure just I

Bert Nappier

But maybe work it and wrong. did I'll way let up give back to it little margins. on and pull it Yes. a down interpret general, guidance color Actually, you up my and back me segment in

an raise expect, to As allowed for half $X.XX. $X.XX the first on again we're you year with can the $X.XX pleased this the our to to basis, outlook time us performance overall by

we double-digit gross that's segment in our expect upside versus And environment, delivers which for to global position up business, EPS which international a guidance growth, think, revenue of margin taken And then some of the consecutive us see obviously, earnings some putting in is our of automotive impressive. profitability performance in pretty automotive, and see we previous in our doing That growth with expectations. a year midpoint upside. this we expectations, industrial XX.X%, the third we've is, about XX% that,

rates, difficult a a to at overall interpret and On that really, that digits top foreign political it's growth the monetary policy, growth on we're currency. basis, exceptional still And these we mid-single had environment of there, inflation, look as we are an and some things to out strong macro choppy eye globally keeping pretty landscape 'XX. see interest whether 'XX moderated for and year. this We line, growth but

more keeping about industry a Paul allow business. XX remember, we of XX to do original all bit while talked in points. we're a strong our taking We've great just gross some A point And our it's close cautious, together, again, our to versus balance against to lot got cash that of that GPC. on expectation that basis invest up in XX fundamentals. details margin, So to eye flows increase business. basis that. all little to have in own few We ticked XX confidence a us confidence we've

be margins, we're On points. those will for basis up do to think year, be for That's XX looking the again. year. the expansion up industrial XX segment to for full We

believe we segment just second in XX.X% be will will to for clarify, year, Will not be using outlined. So Industrial as recover the a position margin up of will Industrial to outpace for the half, the proxy. here automotive, but QX but the in automotive

just I headwind is on The a call would SG&A. out only point

expected XX we to is points, our year expectations. original for XX basis the which with We consistent will see deleverage as

So together margin take expectations. our industrial us allowed to and on year up for conversion the better all guidance gross slightly international that auto, profit better

Gregory Melich

realize must And together. say and I said, that have college. quarters everything, piecing for Thanks XX in it. didn't thanks I guess started for I Got will you

So...

Sidney Jones

up right, easy. lead I them too All

Operator

of Imbro Bank. The next Daniel from question comes Stephen

Daniel Imbro

Sid, I'll add Well my congratulations deserved together. to group. working the --

start a that? the with auto responsibility, Randy color Can Motion mentioned some about talk view bringing early Well, just a kind is what of what's businesses more positive singular about the personnel running you separately. from more together? decision? taking leadership can any I to response. talk closer to reflection promotion running of Is how auto that been. the rather of the than and you And U.S. a under you you share want on the internal Can maybe that that's the strategy you just Is maybe back quarter, there, side, new to on strategically, step obviously, me

Will Stengel

of business. prepared Look, Thanks remarks, the well is Randy by I said a our relevant my a the think, expertise is I Yes. understood He and in question. for to brings organization leader. lot NAPA as proven

The often, are we've are -- of all while As obviously have value product different end And talked about catalog. the creation same. they businesses. distribution the these and initiatives the day, customer at a

and so progress terms building there at is And great has deep, in incredibly that team it's for and all think, itself a spoken the relevant Randy's and momentum Motion I of performance.

the And build how that. on business. great a to quickly we more do think it's so the I do And of momentum think about is Randy I opportunity brings

that don't it's I think the we're X meaning operationally, putting So business.

have, the the organization. talking together I bit is team, advantage it's One that more fact, not be at drive of to just been the an we've an In given around to a we're together, but as a that impact GPC perhaps kind efficient if as to we a go to us of I putting and all I were we pace know it's at company. not than philosophy going together businesses faster think similarities think allow not. which a world the little We're work and pace And doing as that initiatives about

Paul Donahue

business, it's Will's just great we've job as than a to done at Motion we has would every at you've leadership add And person. team bigger as Randy a comments, and in I expect continue got you that one seen Daniel, because to numbers, phenomenal the Motion. know, much

work the I it that job And U.S. the Kevin that with the you because a talent team, is doubt bringing U.S. to to recognize continue opportunity I the really at drive of going did years group I automotive, have Automotive. last no lot new same have me continue will would to leading in team. over And That say Daniel. confidence, improvements the by asked by great into on leadership question of a I'm few gives that U.S. Randy glad the did automotive. XXX% in team. it good Kevin

the that by is to the forward have excited businesses. impact across look Randy to and going So both we're moves

Daniel Imbro

the guidance, reconcile to side. the follow on then to the on revenue X% guide but X% not trying it, X% automotive to guide automotive X% up And and total the get comp too into to

FX better I a as least than what few just initially points rates today are guided. think sit at you we

So reconcile that of more out more lighter back same to be be some a benefit? Are within trying it growth just the interpretation, Or guidance you is benefit FX tailwind. hedging range. half? maybe in right how will that wouldn't organic translational the that of And

of FX guide, kind rates can gets away Just trying the maintained. to how square change

Bert Nappier

Look, guide. our on top to line, outlook what throughout consistent with with Yes, said we sure. we've line done the would And top much been just on initial year both I basically the pretty we've the the X%. on do we X% think

would our rest the and through to the on get at say color that look a to more continue the to on We'll little will the we international be of the year comp outpace it be global We'll trying I de-comping U.S. automotive on expect range. U.S. lower As end end. automotive of to the bit higher the expect

continues how the over highlighted, think recovers conservative we about the we're the So your potential is are second of a from has and on of there's of to improve the things. bit end, the look, FX improvement bit you a U.S. there. little how thinking those a half. on But business international And bit how little in rest the and Will about higher business, automotive point, more that's year kind get as to being we probably that but

first side. single second the half, we bit But had digits I'd single X% I for about if half. didn't X% digits gives to the remiss a as But half single-digit. the even you moderates in industrial. in with first expect industrial, the second low On versus low half, the They've a be talk fantastic in high industrial which that to

for I've times, the some segment. will the margin nice we of As see Industrial full a year in said couple expansion

reconciles circle that and the hopefully, squares So that for you.

Daniel Imbro

follow-up on the comp guide. one Just

back Inflation on an outlook. the in called You But acceleration. the is just moderating. U.S., mentioned you're half you for conservative the calling

the back that business So to half guess, accelerating will get what U.S. you the that the from you end are guys the the clearly, total to to that you're traffic looking year gives through implying what up. at Or of going be accelerate are confidence comp the low further the to ultimately acceleration of the the the traffic in in guide here comp towards is specific I X% X% buckets? get

Bert Nappier

have kind not of sure that we're I'm what interpreted reiterate would Yes. I'll I thinking. way. just

at year had consistent to half for X% throughout look on X% growth to we the As the We've the automotive. back X% for the X% range.

just We expect X%. full higher on year to quarters, at think end X% it lower X that range, U.S. automotive leave the that for International next on the and I end there. the we'll automotive of and

Operator

We question, of Basham come have one question Seth and Wedbush. time will from that last for

Seth Basham

as balance mistaken, Congrats the dead deceleration material were we beat a horse not through we'll buddy. U.S. last had the quarter. you April cadence said to to the the call, pretty X% well, flattish accelerated April Sid on you is level and to the implies comps through a of the auto conference quarter, thought But in the we quarter. said that first in from back Perhaps the and question, Will. date on June. of miss in were zero-ish, Where May? I My That business quarterly he

Will Stengel

to In we were then true. I April first I articulated, March the think flattish. in each call said, it deceleration, think was and from as the in we made close the the this and other as quarter we that accelerate was we comment May April, June and called you and performance. And did

low flattish digit, single digit, it So the single call quarter. for low

Seth Basham

following on most enough. Seems segment. that's being right. where regarding comments competition, And up like All Fair more you're the the segment your just price then secondly, the with accounts disciplined major there's there. in profitable more give Are as from some away at customers that any this walking enough some you being you business approach you don't see how time? point us you Can color?

Will Stengel

is part business I'm not they're that this far. scale because I price, and first say, I'd obviously, the go big always would sure foremost, discussing accounts. of

than were I today So discussions those before. say that of are intense types wouldn't they more

doing bring being is "major of capabilities bringing accounts" I that we also to prop fresh drive all we appreciated. lot And that to a sure can we're just the with that really think regional value smaller them. a with given perspective value work making our we're

customers. So a I care taking level our think discipline it's strategic stepped-up and of of just about focus

Operator

This like conference over closing management turn question-and-answer for any session. back the concludes would our I to to remarks.

Paul Donahue

for to in like reiterate, continue of super also and around I interest all proud Genuine And you way your Yes. in a Company. operate for you. combined want our joining team, and I'd just to we today, challenging world. continued they and to Thank us Parts environment thanks thank the are the of

third We'll and quarter look our forward the hosting on to another in results. report call

So enjoy XXth. another on you. have meantime, and your call Thank In cool October we'll the the of summer. stay rest

Operator

Thank concluded. now has conference disconnect. you for attending The you now and presentation, today's may

Genuine Parts (GPC) 20 Jul 232023 Q2 Earnings call transcript