Core Viewpoint - Genuine Parts Co. (GPC) reported strong earnings, exceeding revenue and EPS estimates, while reaffirming its full-year guidance without factoring in potential tariff impacts [1][5][10] Financial Performance - Revenue reached $5.9 billion, surpassing estimates of $5.83 billion by approximately 1% and showing a 2% year-over-year increase [5] - Earnings per share (EPS) were $1.75, beating estimates of $1.66 by 5%, although EPS decreased by about 21% year-over-year [5] - The company announced a full-year 2025 dividend of $4.12 per share, a 3% increase from the previous year, marking 69 consecutive years of dividend increases [6] Dividend Information - The current dividend yield stands at 3.59% with a payout ratio of 63.68% [4][5] - The annualized 3-year dividend growth rate is 7.06% [4] Strategic Acquisitions - Genuine Parts acquired 44 stores from independent owners and competitors during the quarter, enhancing its market presence [7] - The company continues to benefit from previous acquisitions, contributing positively to its gross margin, which increased to 37.1% [7] Market Outlook - The current trade war is expected to make new and used cars more expensive, potentially increasing demand for auto parts as consumers maintain their existing vehicles [8][9] - However, tariff exposure on auto parts could impact future demand, with the company choosing to reassess guidance after a 90-day pause [10] Analyst Sentiment - Analysts currently hold a "Hold" rating on GPC, with a consensus price target of $131, indicating a potential upside of 14% from the stock price on April 22 [11] - The forward P/E ratio of around 14x is below the company's five-year average of 17.96x, appealing to value-conscious investors [12]

Financial Performance - For the first quarter of 2025, net sales reached $5.9 billion, reflecting a 1.4% year-over-year increase despite one less selling day in the U.S. compared to the prior year[81]. - The Automotive segment generated $3.7 billion in net sales, a 2.5% increase from the previous year, driven by a 4.1% benefit from acquisitions[87]. - The Industrial segment reported net sales of $2.2 billion, a decrease of 0.4% year-over-year, impacted by a 0.7% decrease in comparable sales and a 1.0% unfavorable foreign currency impact[88]. - First quarter net income declined by 21.9% year-over-year to $194.4 million, influenced by higher depreciation, interest expenses, and lower pension income[82]. - Total adjusted EBITDA for the first quarter was $473.1 million, down 8.4% from the previous year, with a total adjusted EBITDA margin of 8.1%[85]. - Q1 2025 net income was $194 million, a decrease of 21.9% from $249 million in the same period last year, with diluted earnings per share at $1.40, down 21.3% from $1.78[97]. - Adjusted net income for Q1 2025 was $243 million, a decrease of 21.8% compared to the prior year, with adjusted diluted earnings per share at $1.75, down 21.2% from $2.22[98]. Expenses and Costs - Gross profit increased by $99 million, or 4.8%, with gross margin improving by 120 basis points to 37.1% due to acquired businesses and pricing initiatives[90]. - SG&A expenses rose by $135 million, or 8.6%, primarily due to acquisitions and increased personnel costs, with SG&A as a percentage of sales increasing to 29.1%[91]. - Depreciation and amortization expenses increased by $25 million due to planned investments in technology and supply chain initiatives[94]. - Net non-operating expenses for Q1 2025 were $36 million, a $42 million change from $5 million in net non-operating income in the prior year, primarily due to increased borrowings and lower pension income[95]. - Restructuring and other costs totaled $54.8 million, a decrease from $83 million in the prior year, reflecting ongoing efficiency improvements[82]. - In Q1 2025, the company incurred $55 million in restructuring and other costs, a decrease of $28 million compared to the prior year period[93]. Debt and Cash Management - Total debt increased to $4.6 billion, up $305 million, or 7.1%, from December 31, 2024[115]. - Cash and cash equivalents were $420 million as of March 31, 2025, a decrease of $60 million from December 31, 2024, with net cash used in operating activities at $41 million[113]. - The company amended its Unsecured Revolving Credit Facility to expand borrowing capacity to $2.0 billion and extended the maturity date to March 20, 2030[118]. Strategic Initiatives - The company plans to pursue strategic growth opportunities through disciplined capital deployment, including investments in businesses, mergers, and acquisitions[120]. - The company announced a 3% increase in the regular quarterly cash dividend for 2025, raising it to an annual rate of $4.12 per share from $4.00 per share in the prior year[123]. - 2025 will mark the 69th consecutive year of increased dividends paid to shareholders, demonstrating a strong commitment to returning value to investors[123]. Market Conditions - The Purchasing Managers' Index (PMI) showed sequential improvement in early 2025, indicating potential market recovery, although it contracted in March[89]. - The company's exposure to market risk has not changed materially since December 31, 2024, indicating stability in its risk management practices[124].

Core Viewpoint - Genuine Parts Company (GPC) reported mixed financial results for the first quarter of 2025, with adjusted earnings per share beating estimates but declining year-over-year, while net sales exceeded expectations and showed slight growth compared to the previous year [1][2]. Financial Performance - Adjusted earnings for Q1 2025 were $1.75 per share, surpassing the Zacks Consensus Estimate of $1.66 but down from $2.22 per share in the same quarter last year [1]. - Net sales reached $5.87 billion, exceeding the Zacks Consensus Estimate of $5.82 billion and reflecting a year-over-year increase of 1.4%, driven by a 3% contribution from acquisitions [2]. - Cash and cash equivalents decreased to $420.4 million from $490 million as of December 31, 2024, while long-term debt rose to $3.78 billion from $3.74 billion [5]. Segmental Performance - The Automotive segment generated net sales of $3.7 billion, a 2.5% increase year-over-year, surpassing estimates, although comparable sales fell by 0.8% [3]. - The Industrial Parts segment's net sales declined by 0.4% year-over-year to $2.20 billion, missing estimates, with comparable sales down by 1% [4]. - Operating profit for the Automotive segment decreased by 10.7% to $286 million, while the Industrial Parts segment's operating profit remained flat at $279 million [3][4]. Guidance - For 2025, the company anticipates revenue growth of 2-4% for both automotive and industrial segments, with overall sales growth projected in the same range compared to 1.6% growth in 2024 [6]. - Adjusted earnings per share are expected to be between $7.75 and $8.25, compared to $8.16 in 2024, with operating cash flow projected between $1.2 billion and $1.4 billion [6].

Core Insights - Genuine Parts (GPC) reported revenue of $5.87 billion for the quarter ended March 2025, marking a year-over-year increase of 1.4% and exceeding the Zacks Consensus Estimate by 0.77% [1] - The company's EPS for the same period was $1.75, down from $2.22 a year ago, but it surpassed the consensus EPS estimate of $1.66 by 5.42% [1] Revenue Performance - Automotive net sales reached $3.66 billion, exceeding the average analyst estimate of $3.62 billion, reflecting a year-over-year increase of 2.5% [4] - Industrial net sales were reported at $2.20 billion, matching the average estimate but showing a year-over-year decline of 0.4% [4] EBITDA Metrics - Segment EBITDA for Industrial was $278.71 million, surpassing the average estimate of $262.50 million [4] - Segment EBITDA for Automotive was reported at $285.51 million, aligning with the average estimate [4] Stock Performance - Genuine Parts shares have returned -7.3% over the past month, compared to a -8.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Genuine Parts (GPC) reported quarterly earnings of $1.75 per share, exceeding the Zacks Consensus Estimate of $1.66 per share, but down from $2.22 per share a year ago, indicating a 21.1% year-over-year decline [1] - The company achieved revenues of $5.87 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.77% and showing a slight increase from $5.78 billion year-over-year [2] - Genuine Parts has outperformed the S&P 500, with a year-to-date loss of about 4.2% compared to the S&P 500's decline of 12.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.10, with expected revenues of $6.07 billion, while the estimate for the current fiscal year is $7.89 on revenues of $24.08 billion [7] - The trend of estimate revisions for Genuine Parts has been unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Automotive - Retail and Wholesale - Parts industry is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total GPC sales for Q1 2025 were $5.9 billion, up 0.4% year-over-year, primarily driven by acquisitions and improving sales in the industrial business, partially offset by one less selling day impacting sales growth by 110 basis points [18] - Adjusted EPS for Q1 2025 was $1.75, down 21% from the prior year, influenced by one less selling day, lower pension income, higher depreciation and interest expense, and foreign currency headwinds [36] - Gross margin increased by 120 basis points to 37.1% in Q1 2025, driven by acquisitions and favorable vendor rebates [38] Business Segment Performance Changes - Global industrial segment sales were approximately flat at $2.2 billion, with comparable sales decreasing less than 1%, negatively impacted by one less selling day [19] - Global automotive segment sales increased by 0.5%, with comparable sales decreasing by 0.8%, also affected by one less selling day [24] - In the automotive segment, total sales in the U.S. were up approximately 4%, while comparable sales declined approximately 3% [25] Market Performance Changes - In Canada, total sales increased approximately 5% in local currency, with comparable sales up approximately 4% [28] - European total sales increased approximately 3% in local currency, with comparable sales essentially flat [29] - Asia Pacific delivered double-digit growth in local currency, with total sales up approximately 12% and comparable sales growth of approximately 3% [30] Company Strategy and Industry Competition - The company is focused on enhancing customer service and executing strategic initiatives to improve operational efficiency [12][15] - The rollout of the modernized e-commerce platform, Napa ProLink, is aimed at improving customer experience and driving sales growth [16] - The company continues to pursue acquisitions to strengthen its market position, with 44 stores acquired from independent owners and competitors [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a dynamic external environment influenced by tariffs, trade, inflation, and interest rates, which are creating a cautious demand backdrop [12][13] - The company maintains its outlook for 2025, expecting diluted EPS in the range of $6.95 to $7.45 and adjusted diluted EPS between $7.75 and $8.25 [45] - Management expressed cautious optimism about a potential recovery in the second half of 2025, despite current market softness [51] Other Important Information - The company incurred $69 million in pre-tax adjustments related to restructuring and acquisitions during Q1 2025 [35] - Cash from operations was down $41 million, and free cash flow decreased by approximately $160 million due to investments in inventory and capital expenditures [42][43] - The company returned approximately $135 million to shareholders through dividends during the quarter [44] Q&A Session Summary Question: What was the inflation impact in Q1 for both motion and automotive businesses? - Inflation was slightly less than one point across both businesses, with SG&A costs increasing around 2% [65][66] Question: How is the performance in Europe Automotive relative to the market? - The company is seeing growth in Napa branded products, with market share in line or slightly better than the market [69][70] Question: Update on North American auto and independent store acquisitions? - The company added approximately 40-45 stores and will continue to focus on running great stores while moderating acquisition pace [74][76] Question: Is there a scenario that could improve the tariff situation? - If tariffs are resolved quickly, it could lead to a more robust second half, but currently, the company is in a wait-and-see mode [80][81] Question: What is the cost impact of current tariffs on goods? - The complexity of tariffs makes it difficult to quantify the exact cost impact, as it varies by product and country of origin [107][110] Question: How are independent owners navigating the current environment? - There has not been a significant rush to stock up on inventory due to tariffs, and the company is working with owners to ensure they are appropriately stocked [125][126]

First Quarter 2025 Earnings Presentation April 22, 2025 Safe Harbor Statement FORWARD-LOOKING STATEMENTS: Some statements in this presentation, as well as in other materials we file with the Securities and Exchange Commission (SEC), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such ...

Financial Performance - First Quarter 2025 sales were $5.9 billion, a 1.4% increase from $5.8 billion in the same period last year[4] - Net income for the first quarter was $194 million, or $1.40 per diluted share, compared to $249 million, or $1.78 per diluted share in the prior year[5] - Adjusted net income was $243 million, or $1.75 per diluted share, down from $311 million, or $2.22 per diluted share in the prior year[6] - Net sales for Q1 2025 increased to $5,866,069 thousand, up 1.4% from $5,783,631 thousand in Q1 2024[27] - Gross profit rose to $2,173,684 thousand, compared to $2,074,655 thousand in the previous year, reflecting a gross margin improvement[27] - Net income decreased to $194,392 thousand, down 22% from $248,894 thousand in Q1 2024[27] - Basic and diluted earnings per share were both $1.40, down from $1.79 and $1.78 respectively in Q1 2024[27] - Adjusted net income for Q1 2025 was $243,073 thousand, compared to $310,898 thousand in Q1 2024, reflecting a decrease in profitability[35] Segment Performance - Global Automotive sales reached $3.7 billion, a 2.5% increase, while Industrial sales were $2.2 billion, down 0.4%[9][10] - Segment EBITDA for Automotive was $286 million, a decrease of 10.7%, with an EBITDA margin of 7.8%[9] - Industrial segment EBITDA was $279 million, consistent with the prior year, and the EBITDA margin improved to 12.7%[10] - Automotive segment net sales grew to $3,664,888 thousand, a 2.5% increase, while the Industrial segment saw a slight decline of 0.4%[29] Expenses and Cash Flow - Total operating expenses increased to $1,885,739 thousand, up from $1,754,790 thousand in the prior year, driven by higher selling, administrative, and other expenses[27] - Cash flow from operations decreased by $41 million in the first quarter, primarily due to lower net income and working capital changes[11] - For Q1 2025, the company reported a net cash used in operating activities of $(40,827) thousand, a significant decrease from $318,306 thousand in Q1 2024[41] - Free Cash Flow for Q1 2025 was $(160,667) thousand, compared to $202,616 thousand in Q1 2024[41] Outlook and Guidance - The company reaffirms its 2025 outlook with total sales growth projected at 2% to 4% and adjusted diluted EPS guidance of $7.75 to $8.25[7][16] - For the year ending December 31, 2025, the company expects net cash provided by operating activities to be between $1.2 billion and $1.4 billion[41] - The company anticipates purchases of property, plant, and equipment to range from $400 million to $450 million for the year ending December 31, 2025[41] - Free Cash Flow for the year ending December 31, 2025, is projected to be between $800 million and $1.0 billion[41] Dividends and Assets - The company declared dividends of $1.03 per common share, up from $1.00 in the previous year[27] - Cash and cash equivalents at the end of Q1 2025 were $420,447 thousand, down from $479,991 thousand at the end of Q4 2024[34] - Total assets increased to $19,817,205 thousand, compared to $19,282,705 thousand at the end of the previous year[33] Challenges and Strategic Focus - The company is navigating challenges from tariffs and trade dynamics while focusing on customer service and strategic initiatives[4]

Core Viewpoint - Genuine Parts Company reported a solid start to 2025, with a focus on customer service and strategic initiatives despite challenges from tariffs and trade dynamics [2] Financial Performance - Sales for Q1 2025 were $5.9 billion, a 1.4% increase from $5.8 billion in Q1 2024, driven by a 3.0% benefit from acquisitions, offset by a 0.8% decrease in comparable sales and a 0.8% unfavorable impact from foreign currency [2] - Net income was $194 million, or $1.40 per diluted share, compared to $249 million, or $1.78 per diluted share in the prior year [3] - Adjusted net income was $243 million, or $1.75 per diluted share, down from $311 million, or $2.22 per diluted share in the prior year [4] Segment Highlights - **Automotive Parts Group**: Global automotive sales reached $3.7 billion, up 2.5% from the previous year, with a segment EBITDA of $286 million, a decrease of 10.7% [5] - **Industrial Parts Group**: Industrial sales were $2.2 billion, down 0.4% from the previous year, with segment EBITDA remaining stable at $279 million [6] Cash Flow and Capital Allocation - Cash flow from operations decreased by $41 million in Q1 2025, primarily due to lower net income and working capital changes [7] - Net cash used in investing activities was $155 million, including $120 million for capital expenditures and $74 million for acquisitions [7] - Free cash flow decreased by $161 million for the first three months of 2025 [7] Balance Sheet - As of March 31, 2025, the company had $420 million in cash and cash equivalents and $2 billion in undrawn capacity on its Revolving Credit Agreement [8] 2025 Outlook - The company reaffirmed its full-year 2025 guidance, expecting total sales growth of 2% to 4% and adjusted diluted EPS of $7.75 to $8.25 [11][12]

Group 1 - Genuine Parts Company (NYSE: GPC) has experienced a significant decline, with its stock down double-digits over the past year [1]