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]

Group 1: Market Overview - The stock market has recently experienced a significant decline due to concerns regarding the impact of tariffs on the economy [1] - Falling stock prices have led to increased dividend yields, allowing investors to secure higher returns on quality dividend stocks [1] Group 2: VICI Properties - VICI Properties' stock has decreased over 10% from its recent peak, resulting in a dividend yield of 5.7%, significantly higher than the S&P 500's yield of 1.5% [3][4] - The REIT benefits from stable cash flow generated from high-quality experiential real estate, such as casinos and entertainment complexes [3] - VICI Properties has a strong financial profile, having raised its dividend for seven consecutive years at a 7% compound annual rate, outperforming its peers [5] Group 3: Verizon - Verizon's shares have fallen more than 7%, increasing its dividend yield to 6.3% [6] - The company generated $36.9 billion in cash flow from operations and $19.8 billion in free cash flow last year, comfortably covering its $11.2 billion dividend payout [7] - Verizon is acquiring Frontier Communications for $20 billion to enhance its broadband network, positioning itself for future revenue and cash flow growth [8] Group 4: Genuine Parts Company - Genuine Parts Company has seen its stock drop over 30%, raising its dividend yield to 3.7% [9] - Despite potential tariff impacts on the automotive sector, the company has a history of resilience, having increased its dividend for 69 consecutive years [10] - The company produced $1.3 billion in cash flow from operations and $684 million in free cash flow last year, exceeding its $555 million dividend payments [11]

Company Overview - Genuine Parts Company is a leading global service provider of automotive and industrial replacement parts and value-added solutions, established in 1928 [2] - The company operates its Automotive Parts Group across multiple countries including the U.S., Canada, Mexico, and several European nations, while its Industrial Parts Group serves customers primarily in North America and Australasia [2] - Genuine Parts Company has a vast network of over 10,700 locations in 17 countries, supported by more than 63,000 employees [2] Upcoming Financial Results - The company plans to release its first quarter financial results on April 22, 2025 [1] - Following the release, management will host a conference call at 8:30 a.m. ET, which will be accessible via webcast and by phone [1] - A replay of the conference call will be available on the company's website two hours after the call's completion [1]

Company Overview - Genuine Parts (GPC) shares have increased by approximately 2.1% over the past month, outperforming the S&P 500 index [1] - The most recent earnings report indicates a need to analyze the catalysts affecting the stock's performance [1] Earnings Estimates - Fresh estimates for Genuine Parts have trended downward, with the consensus estimate decreasing by 14.93% [2] - The stock currently holds a Zacks Rank of 4 (Sell), indicating expectations for below-average returns in the coming months [4] VGM Scores - Genuine Parts has a subpar Growth Score of D and a Momentum Score of F, while it received a B grade for value, placing it in the second quintile for this investment strategy [3] - The aggregate VGM Score for the stock is D, which is significant for investors not focused on a single strategy [3] Industry Performance - Genuine Parts is part of the Zacks Automotive - Retail and Wholesale - Parts industry, where O'Reilly Automotive (ORLY) has seen a 3.4% increase in stock price over the past month [5] - O'Reilly Automotive reported revenues of $4.1 billion for the last quarter, reflecting a year-over-year growth of 6.9% [5] - The expected earnings per share for O'Reilly Automotive for the current quarter is $9.84, representing a year-over-year increase of 7% [6]

Core Insights - The international operations of Genuine Parts Company (GPC) are crucial for assessing its financial resilience and growth prospects, especially in the context of its expansive global footprint [1][2] Revenue Performance - GPC's total revenue for the quarter ended December 2024 was $5.77 billion, reflecting a 3.3% increase from the same quarter last year [4] - International revenue trends reveal that Europe contributed $940.47 million (16.30%) to total revenue, surpassing analyst expectations of $937.31 million, and showing a slight decrease from $960.03 million (16.08%) in the previous quarter [5] - Australasia accounted for $589.3 million (10.21%) of total revenue, exceeding expectations of $565.77 million, and showing growth from $532.13 million (9.53%) in the same quarter last year [6] Future Projections - Analysts forecast GPC's total revenue for the current fiscal quarter to be $5.83 billion, indicating a 0.9% increase year-over-year, with expected contributions from Europe and Australasia at $973.22 million (16.7%) and $533.49 million (9.1%) respectively [7] - For the full year, GPC is projected to achieve total revenue of $24.1 billion, a 2.6% increase from the previous year, with Europe expected to contribute $3.93 billion (16.3%) and Australasia $2.3 billion (9.6%) [8] Strategic Considerations - The reliance on international markets presents both opportunities and challenges for GPC, making the analysis of international revenue trends essential for forecasting the company's future outlook [9][10]