Financial Data and Key Metrics Changes - Total GPC sales for Q1 2025 were $5.9 billion, an increase of 1.4% compared to the same period last year, driven primarily by acquisitions and improving sales in the industrial business [11][27] - Gross margin expanded by 120 basis points to 37.1%, reflecting benefits from acquisitions and strategic pricing initiatives [12][28] - Adjusted EPS for Q1 was $1.75, down 21% year-over-year, impacted by one less selling day, lower pension income, and higher depreciation and interest expenses [26][30] Business Line Data and Key Metrics 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 [12][14] - Global Automotive segment sales increased by 2.5%, with comparable sales down 0.8%, also affected by one less selling day [15][16] - Sales from value-added services in the industrial segment were flat to slightly down, indicating a notable improvement compared to the previous year [13] Market Data and Key Metrics Changes - In the industrial market, growth was observed in pulp and paper, aggregate and cement, and DC and logistics, while sectors like iron and steel, automotive, and oil and gas remained pressured [13] - In the U.S. automotive market, total sales increased approximately 4%, while comparable sales declined about 3% [17] - Canadian sales increased approximately 5% in local currency, with comparable sales up about 4%, showcasing strong performance despite a softer macroeconomic environment [19][20] Company Strategy and Development Direction - The company is focused on enhancing customer service and executing strategic initiatives to improve operational efficiency and agility in a dynamic external environment [7][9] - The rollout of the modernized e-commerce platform, NAPA ProLink, aims to improve customer experience and drive sales growth in the B2B segment [10] - The company is committed to leveraging its scale and diversified global presence to navigate market challenges and capitalize on growth opportunities [22][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs, trade, and geopolitical factors on the operating landscape, while expressing confidence in the company's ability to adapt [7][9] - The outlook for 2025 remains unchanged, with expected diluted EPS in the range of $6.95 to $7.45 and adjusted diluted EPS between $7.75 and $8.25 [32][39] - Management highlighted the importance of agility and responsiveness to market conditions, particularly regarding potential tariff impacts and overall economic recovery [36][38] Other Important Information - The company incurred restructuring costs of $55 million in Q1, with an expected benefit of $100 million to $125 million from restructuring efforts when fully annualized in 2026 [30][41] - The company plans to invest approximately $120 million in capital expenditures and $75 million in strategic acquisitions during the quarter [31][43] Q&A Session Summary Question: Can you discuss inflation impacts in both motion and automotive businesses? - Inflation was slightly less than a point across both businesses, with SG&A costs increasing around 2% primarily due to salaries and rent [50][51] Question: Are you seeing share gains in Europe automotive? - The company is experiencing outsized growth in NAPA branded products in Europe, with share performance in line with or slightly better than the market [52][54] Question: What is the status of North American auto acquisitions? - The company added approximately 40-45 stores in the quarter and will continue to focus on running great stores while moderating acquisition efforts [58][59] Question: Can you size the cost impact of tariffs on cost of goods? - The complexity of tariffs makes it difficult to quantify the exact impact, but a specific SKU could see a potential cost increase of about 30% due to various tariff permutations [83][84] Question: How are independents navigating the current environment? - There has not been a significant rush to stock up on inventory among independent owners, and the company continues to support them with analytics for inventory management [94][95]

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]

Financial Performance - First quarter global sales increased by 1.4% to $5.9 billion, impacted by one less day[11] - Adjusted EBITDA decreased by 8.4% to $473 million, with an adjusted EBITDA margin of 8.1%, a decrease of 80 bps[12] - Adjusted diluted EPS decreased by 21.2% to $1.75[12] - Free cash flow was negative $161 million[13] Segment Performance - Industrial global sales decreased by 0.4% to $2.2 billion, with global comps down 0.7%, impacted by one less day[15] - Industrial segment EBITDA was $279 million, in-line with prior year, with a segment EBITDA margin of 12.7%, improved 10 bps[15] - Automotive global sales increased by 2.5% to $3.7 billion, with global comps down 0.8%, impacted by one less day[18] - Automotive segment EBITDA decreased by 10.7% to $286 million, with a segment EBITDA margin of 7.8%, decreased 110 bps[18] 2025 Outlook - Reaffirmed total sales growth of 2% to 4% for both Automotive and Industrial segments[34] - Reaffirmed adjusted diluted EPS guidance of $7.75 to $8.25, representing an adjusted EPS growth of (5%) to 1%[34] - Reaffirmed free cash flow guidance of $800 million to $1 billion[34]

[Q1 2025 Financial and Operational Highlights](index=1&type=section&id=Genuine%20Parts%20Company%20Reports%20First%20Quarter%202025%20Results%20and%20Reaffirms%20Full-Year%20Outlook) [Overall Performance Summary](index=1&type=section&id=First%20Quarter%202025%20Results) Genuine Parts Company reported Q1 2025 sales of **$5.9 billion**, a **1.4%** increase, with net and adjusted net income declining Q1 2025 Financial Summary | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Sales** | $5.9 billion | $5.8 billion | | **Net Income** | $194 million | $249 million | | **Diluted EPS** | $1.40 | $1.78 | | **Adjusted Net Income** | $243 million | $311 million | | **Adjusted Diluted EPS** | $1.75 | $2.22 | - Sales grew by **1.4%**, primarily due to a **3.0%** benefit from acquisitions, partially offset by a **0.8%** decrease in comparable sales and **0.8%** unfavorable foreign currency impact[4](index=4&type=chunk) - One less selling day in the U.S. negatively impacted overall and comparable sales growth by approximately **1.1%**[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=First%20Quarter%202025%20Segment%20Highlights) [Automotive Parts Group](index=2&type=section&id=Automotive%20Parts%20Group) Global Automotive sales increased by **2.5%** to **$3.7 billion** driven by acquisitions, despite comparable sales decline, while EBITDA and margin decreased Automotive Parts Group Performance | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | **Sales** | $3.7 billion | +2.5% | | **Comparable Sales** | | -0.8% | | **Acquisition Benefit** | | +4.1% | | **Segment EBITDA** | $286 million | -10.7% | | **Segment EBITDA Margin** | 7.8% | -110 bps | [Industrial Parts Group](index=2&type=section&id=Industrial%20Parts%20Group) Industrial segment sales decreased by **0.4%** to **$2.2 billion**, offset by acquisitions, while EBITDA remained stable and margin improved Industrial Parts Group Performance | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | **Sales** | $2.2 billion | -0.4% | | **Comparable Sales** | | -0.7% | | **Acquisition Benefit** | | +1.3% | | **Segment EBITDA** | $279 million | In-line with prior year | | **Segment EBITDA Margin** | 12.7% | +10 bps | [Financial Condition and Cash Flow](index=2&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%20and%20Capital%20Allocation) [Balance Sheet and Cash Flow Analysis](index=2&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%20and%20Capital%20Allocation) Operating cash flow decreased by **$41 million**, leading to a **$161 million** decline in free cash flow, while liquidity remained strong with **$420 million** cash and **$2 billion** undrawn credit - Operating cash flow decreased by **$41 million** in the first three months of 2025[11](index=11&type=chunk) - Free cash flow for the first three months of 2025 was negative, decreasing by **$161 million** year-over-year[11](index=11&type=chunk) - As of March 31, 2025, the company held **$420 million** in cash and **$2 billion** in undrawn revolving credit capacity[12](index=12&type=chunk) [Full-Year 2025 Outlook](index=2&type=section&id=2025%20Outlook) [Reaffirmed Full-Year Guidance](index=2&type=section&id=2025%20Outlook) The company reaffirmed its full-year 2025 guidance, projecting **2% to 4%** sales growth and adjusted diluted EPS of **$7.75 to $8.25**, excluding tariff and pension termination impacts 2025 Full-Year Outlook | Metric | 2025 Full-Year Outlook | | :--- | :--- | | **Total Sales Growth** | 2% to 4% | | **Automotive Sales Growth** | 2% to 4% | | **Industrial Sales Growth** | 2% to 4% | | **Diluted EPS** | $6.95 to $7.45 | | **Adjusted Diluted EPS** | $7.75 to $8.25 | | **Operating Cash Flow** | $1.2 billion to $1.4 billion | | **Free Cash Flow** | $800 million to $1.0 billion | - Guidance excludes impacts from new U.S. tariffs announced in Q1 and potential reciprocal tariffs[14](index=14&type=chunk) - Outlook excludes a one-time, non-cash charge of approximately **$735 million** (**$540 million** net of tax) for a U.S. pension plan termination[14](index=14&type=chunk)[16](index=16&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=GENUINE%20PARTS%20COMPANY%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28UNAUDITED%29) [Condensed Consolidated Statements of Income](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q1 2025 net sales increased to **$5.87 billion**, but higher operating expenses and interest led to a decline in net income to **$194.4 million** and diluted EPS to **$1.40** Condensed Consolidated Statements of Income ($ in thousands) | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net sales** | $5,866,069 | $5,783,631 | | **Gross profit** | $2,173,684 | $2,074,655 | | **Income before income taxes** | $251,637 | $325,181 | | **Net income** | $194,392 | $248,894 | | **Diluted earnings per share** | $1.40 | $1.78 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets increased to **$19.82 billion** and total liabilities to **$15.35 billion**, with total equity rising to **$4.46 billion** Condensed Consolidated Balance Sheets ($ in thousands) | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $10,214,388 | $9,852,584 | | **Total assets** | $19,817,205 | $19,282,705 | | **Total current liabilities** | $8,885,200 | $8,525,380 | | **Total liabilities** | $15,352,642 | $14,930,854 | | **Total equity** | $4,464,563 | $4,351,851 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 saw a net cash outflow from operations of **$40.8 million**, with investing activities using **$154.8 million**, resulting in a **$59.5 million** net cash decrease Condensed Consolidated Statements of Cash Flows ($ in thousands) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(40,827) | $318,306 | | **Net cash used in investing activities** | $(154,818) | $(178,444) | | **Net cash provided by (used in) financing activities** | $128,742 | $(175,223) | | **Net decrease in cash and cash equivalents** | $(59,544) | $(52,419) | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20INCOME%20TO%20ADJUSTED%20NET%20INCOME%20AND%20GAAP%20DILUTED%20NET%20INCOME%20PER%20COMMON%20SHARE%20TO%20ADJUSTED%20DILUTED%20NET%20INCOME%20PER%20COMMON%20SHARE%20%28UNAUDITED%29) [Reconciliation of Net Income and EPS](index=10&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Adjusted%20Net%20Income) Q1 2025 GAAP Net Income of **$194.4 million** was adjusted to **$243.1 million** for non-recurring costs, resulting in an Adjusted Diluted EPS of **$1.75** Reconciliation of GAAP Net Income to Adjusted Net Income and EPS ($ in thousands, except per share data) | (in thousands, except per share data) | Q1 2025 | | :--- | :--- | | **GAAP net income** | $194,392 | | Restructuring and other costs | $54,770 | | Acquisition and integration related costs | $14,035 | | Tax impact of adjustments | $(20,124) | | **Adjusted net income** | **$243,073** | | **GAAP diluted EPS** | **$1.40** | | **Adjusted diluted EPS** | **$1.75** | [Reconciliation of Free Cash Flow](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20CASH%20PROVIDED%20BY%20OPERATING%20ACTIVITIES%20TO%20FREE%20CASH%20FLOW%20%28UNAUDITED%29) Q1 2025 operating cash outflow of **$40.8 million** and capital expenditures led to a negative Free Cash Flow of **$160.7 million** Reconciliation of Free Cash Flow ($ in thousands) | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(40,827) | $318,306 | | **Purchases of property, plant and equipment** | $(119,840) | $(115,690) | | **Free Cash Flow** | **$(160,667)** | **$202,616** |

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]

My top financial goal is to eventually generate enough passive income to cover my basic living expenses. I march toward that objective each month by investing more money into income-generating investments, like dividend-paying stocks. I focus on buying stocks that pay high-yielding dividends that steadily increase. Vici Properties (VICI 0.34%), PepsiCo (PEP -0.26%), and Genuine Parts (GPC -1.72%) all fit those criteria. That's why I can't wait to buy more shares of each one this April to boost my passive in ...