Financial Data and Key Metrics Changes - Total GPC sales for Q2 2025 were $6.2 billion, an increase of 3.4% compared to the same period last year [6][33] - Gross margin expanded by 110 basis points year-over-year to 37.7%, driven by strategic pricing and sourcing initiatives [6][34] - Adjusted EPS for Q2 2025 was $2.10, down 14% from the prior year, reflecting lower pension income and higher depreciation and interest expenses [31][32] Business Line Data and Key Metrics Changes - Global Industrial segment sales were $2.3 billion, a 1% increase year-over-year, with comparable sales essentially flat [13] - Global Automotive segment sales increased by 5%, with EBITDA of $338 million, representing an 8.6% margin, down 110 basis points from the previous year [17] - E-commerce sales in the Motion segment accounted for 40% of sales, up over 10% from the start of 2024 [16] Market Data and Key Metrics Changes - The U.S. Automotive segment saw total sales up 4%, with comparable sales flat [20] - Canadian sales increased approximately 5% in local currency, with comparable sales up about 4% [25] - European sales were flat in local currency, with comparable sales down approximately 1% [26] Company Strategy and Development Direction - The company is focused on managing through tariff impacts and maintaining customer support through strategic initiatives [8][10] - Continued investment in digital capabilities and e-commerce to enhance customer experience and drive growth [16][29] - The company aims to control costs and improve operational efficiency while navigating a complex external environment [50][51] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for market improvement in the second half of 2025, despite ongoing challenges [12][28] - The impact of tariffs is expected to be more pronounced in the latter half of the year, influencing revenue and cost structures [9][41] - Management highlighted the importance of agility and discipline in operations to adapt to changing market conditions [50][51] Other Important Information - The company incurred $46 million in restructuring costs during the quarter, with a focus on long-term cost savings [31][36] - Total adjusted EBITDA margin for the quarter was 8.9%, down 60 basis points year-over-year [37] - The company returned $277 million to shareholders through dividends in the first half of 2025 [39] Q&A Session Summary Question: Can you talk about fill rates in the independent NAPA stores? - Management noted significant improvement in independent owner inventory positions, with sales out aligning well with company-owned stores [55] Question: Are you able to pass through cost increases due to tariffs? - Management confirmed that pricing dynamics are balanced with supplier cost increases, though not necessarily benefiting gross margin [56][57] Question: What are your expectations for same SKU inflation in the U.S. business? - Management indicated that inflation assumptions are consistent across segments, with a focus on the NAPA business [66] Question: Should we assume the rebasing of global auto margins is the new baseline? - Management emphasized ongoing efforts to improve profitability despite current inflationary pressures, aiming for better margins in the second half [69] Question: Can you discuss the cadence of growth in the motion business? - Management expressed confidence in positive trends for the motion business, with expectations for growth to accelerate in the latter half of the year [79][81]

Core Viewpoint - FedEx Corporation is set to report its fourth-quarter financial results, which are anticipated to reflect the overall performance of the logistics and transportation sector, with analysts expecting a revenue decline compared to the previous year [1]. Earnings Estimates - Analysts predict FedEx will report fourth-quarter revenue of $21.84 billion, a decrease from $22.1 billion in the same quarter last year [1]. - Expected earnings per share (EPS) for the fourth quarter is $5.87, an increase from $5.41 in the previous year [2]. Recent Performance - FedEx has beaten revenue estimates in the last two quarters but has missed EPS estimates in three consecutive quarters [2]. - The company has missed overall EPS estimates in seven of the last ten quarters [2]. Market Sentiment - Investors are closely monitoring FedEx due to its previous earnings shortfalls and weak guidance, which led to a significant drop in share prices [3]. - Concerns regarding the loss of a USPS contract and tariffs affecting global shipping volumes have contributed to a negative outlook [4]. Strategic Initiatives - FedEx is implementing cost-cutting measures and segment spinoffs to improve its financial performance [4]. - Analysts are cautious about the impact of business-to-business (B2B) volumes and tariffs on the company's recovery [5]. Key Items to Watch - A double beat in revenue and EPS could boost investor confidence, as the company has struggled to meet estimates recently [6]. - Forward guidance will be crucial, with previous expectations indicating flat or slightly declining revenue for 2025 [8]. Competitive Landscape - FedEx's performance may influence United Parcel Service (UPS), which has had mixed results in recent quarters [7]. - UPS is set to report its second-quarter results, with FedEx's report potentially serving as a catalyst for UPS shareholders [7]. Stock Performance - FedEx shares are currently trading at $226.20, down 17.5% year-to-date and 11.8% over the last year [10]. - UPS shares have also declined, down 19.9% year-to-date and 28.4% over the last year [10].