Genuine Parts (GPC) 30 Jul 202020 Q2 Earnings call transcript

Greetings. Welcome to Genuine Parts Second Quarter 2020 Earnings Conference Call. [Operator Instructions]. I will now turn the conference over to your host, Sid Jones, Senior Vice President of Investor Relations. Thank you.

begin. may You

and Executive slide Executive Today's a conference Financial thank Genuine our and Company, can that With joining today and us today Good Company be you Second webcast Yancey, the Chief the accompanied Chief Investor Chairman our Parts Paul Call. Genuine website. and and Parts are Quarter Officer. President for Vice Carol by presentation call are found morning, on Donahue, for Officer; XXXX me Conference Relations

Before please Today's website. today's statements call we may described to issued also release businesses. Investors advised company's may in A statements our The regarding today's its as be include to which forward-looking involve and principles. morning, SEC in posted of which in this the accounting materially of results call. this any discussion reconciliation company referred provided no this assumes the measures any differ company reported made these actual release. begin update earnings morning, accepted is section is that under of our press certain this non-GAAP may the be including forward-looking generally during financial important filings, factors call could latest to several from company's statements The press the also obligation results during due forward-looking measures

presented. the segment, Richards, S.P. operations Products all accounted Business please note that periods for we've Finally, as discontinued for

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

safe and second you, you staying We XXXX good call. appreciate joining health. earnings hope Thank you us today morning, good quarter for our Sid, and We everyone. are enjoying conference

well COVID-XX position maximize personal four, while full omnichannel and world excellent our quarterly aggressively of quarter focused The delivered significantly beyond. automotive to cost X enhanced by both focused this messages period in our we generating in from in Products of the on We management Business rigorous long-term GPC company's through managing about position initiatives. the today. results the our managing dynamics remain their of we backdrop think customers One, are as growth safety in prioritizing our now our as streamlined staying and initiatives. our a challenges recovery our the families, and we investments performance our targeted and quarterly we as challenging suppliers. focus, And ways, employees deploy Two, highlight economic initiatives. remain the amid we sale are strengthen of includes flow. on and ROIC and key strong cash and financial Three, by stronger continues short-term debt and pandemic high perspective. portfolio, our the well and the impact want on strategy our This to towards our and significant operations our capital with continue segment liquidity positioned the executed potential reducing segments. to we successfully lives to we COVID-XX our free to industrial as and health and to our position long-term We transformation business So

commitment extend to this to communities. providers you our the protection of our lines on of another want also We for first fight and heartfelt the responders health outbreak care front their and the thank against care to

the global the GPC of family. by proud our are tireless We work across associates

customer remained hard fulfill essential circumstances. operational which fully have difficult critical under needs, work to generally operations As our businesses, required incredibly

effectively ensure to and our as as environment. our balance prepare global stepped pandemic, our enhance has exceptional have protocols our big much to quickly possible. executed we around customer intensified us globe. thank meaningful advanced last approach sheet to And as members with achieve work new excellence. operations Working managing preempt with communications team a a our for enabled to service and developments our for Board flexibility, safety quarter, the agility a up providing you adopting XX,XXX-plus as to cost teams operational Overall, to have and So mentioned team, and partners the our we safe through our savings

During we commitment ESG part the the inclusion unrest and many equality for corporate Environmental, COVID-XX, this we took GPC. solution advance of in over paramount the the be has all. country best initiatives, important for enduring ongoing and our priority months, world. are sustainability and also governance the effect several of in quarter, been social annual pledge our we have to and plan GPC, last issued S highlight steps later we of an to ESG to to these to given long-standing an practices year. enhancements Amid diversity report element a be the At ensure our and to social

sale progress areas, sale June In the multiyear of the a of S.P. represents to business announce optimize portfolio of our operations, addition were our to strategy pleased company. our The and Richards, on in these SPR to we culmination simplify products XX. our

Todo, America. including to Over divested SPR the in, last and associated plans From EIS several productivity forward value-enhancing All sustainable GPC reshaped X have years, move and these we industrial businesses our approximately which exchanged growing, represent for its return with businesses. initiatives higher-margin annual now on in essentially Auto billion faster and here, higher operations segments. with our investments in we $X strengthen focus core and automotive have with divestitures, growth our revenues, in North we

our addition, expand In global to opportunistically will footprint. we continue

branding, as has talent. including systems, suppliers scale notable processes, and with and associated well Our advantages, business streamlined common portfolio the leverage to volume, and synergies ability global services many shared as

and we the deliver value. better As continue to and more results can long-term maximize company, strong value distribution service-oriented of simplified, a GPC

Zealand economic quarter New significantly prevent and to on in shelter-in-place pressured as lockdowns entered mandates COVID. in moving spread We and Now mobility of update. business financial slowed performance Broad overall restrictions by our and sales such a government environment to and the the operating markets full France second activity.

in June, the down April XX% in automotive led And call, Australasia. by Total sales down was May June, XX.X%, pressured excluding the second XX% industrial. in were impact group divestitures, in in XX% in had the operating XX margin down quarter throughout and X share. automotive and segment to per the quarter announced million, strong As only for adjusted and a recovery, income while X.X%, the down industrial with $XXX sales and remained pre-COVID our at $X.XX sales X% were or of basis returns billion, Europe points, $X.X volumes of up net earnings

will improvements working We capital strong cover in delivered cash later. which Carol flows, also and

actions profit. approach disciplined GPC. XXXX. basis to reflection demonstrated margin and in execution given This This we of adjust of throughout in report and our business And well significant expansion structure. a cost to our original target ahead and pleased improvement XX continued a significant point strong conditions leadership, are are gross accomplishment cost quick for We a the resulted savings challenging was segment our operating decision-making

convert we to these and forward, expense expect As permanent our sustainable teams reductions discipline savings. move many we cost of to this temporary and maintain

representing company So review down the revenues. now global a second our of of automotive total billion XXXX to from sales turning of quarter, group and XX% $X.X business XX.X% The had in segments.

sales pleased in improvement with comp were June. XXX net were approximately basis we XX% down line, top Canada, total margin. operating and in XX%, comp deliver In down to a points. up sales point net operating basis impressive XX with Despite margin May earlier, mentioned decline automotive both sales April, our the down down challenging followed and strong sales American In sales XX.X%. sharp recovery a XX%, North U.S. As in we in by a operations, experienced were an

from improving declines For with perspective, both in to in regions to declines recovery trends similar showed sales April XX% the throughout XX% June. quarter mid-single-digit

impact For positive The growth create the of the in-store an strength benefit outperform funds in and retail trends, Canada. as to online continue U.S. sales well the strategy the other the customers pandemic, as quarter, of our stimulus customer and excellent retail to with macro omnichannel in and our reflects experience. to sales positive through

store, pickup, in As our capabilities, and digital enhancing online program, online, associates our ship home driving refresh buy loyalty from our the pickup build in record while U.S. our store Canada. grow deliver as DIY store such examples, business. train websites to we continue are both curbside our increased to on traffic and NAPA and sales and digital also Enhanced stores, to tools our to

driven and accounts were in the as such decline Overall, in to governments customer commercial We state in our as which through to trend related as hard municipalities, the particular, future under COVID-XX. remained competition, base our sales commonly slowdown exhaust. the demand a believe miles we Commercial benefit ride offering. in digital from such professional declines the control this pressure led from positive part our to continued expect brakes, from hit. chassis, distinguish fleets, categories customers expansion to and lower reflects of especially sales shop In hard sales

for growth that travel. we miles will work consumers back drivers improve the other However, as optimistic road and get both are personal and driven on

Our Canada. North included on have These a have streamline both structure, reorganization and sales American by U.S. transformative These already also in on teams continued margin and generated been evidenced digital cost busy productivity, DC and steps in actions a automotive initiatives changes further operating several and savings rationalization, improved focus new our organizations. their to management strategies the delivery tools. incremental operational executing as

these today continue term. and efforts value expect to the long add over to We

them we NAPA received with stores sales the were we the from stability and from reflecting the care and In and So financial support our vast lockdowns current our Europe, available small trends, benefit their last of key of to pressure have our assistance. these as business auto financial to call, U.K. we businesses, COVID-XX X% lasting PPP remain In the down customers for mentioned partners. in applied help parts France in automotive second and quarter, majority in the light closely independently-owned aid approximately confident and worked of in

this fairly operations approximate and had France in from the peak produced the total France and the repairs. sales We lows for up recovery maintenance the our in U.K. sharp an April. well of May drove pandemic, region held demand and While with surge through associated the which group Germany the with U.K. XX% June, in April decrease of in deferred and the of in reopening a a Benelux

fragmented building a operating drive We comp periods an our to June. The sales our expanding on As the large believe in improving and execute in look were footprint for single-digit sales on with in line forward us. important result, promising. we both the are current both in margin momentum is our and advantage Europe bottom conditions to positive growth top total We initiatives positive and Europe marketplace high months, in operations in the competitive business sales European across ahead. as

with in we the new the rollout NAPA brand. expanding powerful opportunities the rollout growth see year, filtration, X associated we and XXXX addition, on introduced Europe product brakes, This categories oil including of been the several steering ongoing categories of In and in product with have suspension.

and our the We are will development in capabilities digital our of American operations. already the also in platforms extend North which Australasian offered omnichannel initiating Europe,

to an X.X%, driven New performance exceptional the Turning we Australia extremely were second and sales quarter. up sales X% are proud this Total increase. in team of Zealand, the from by core approximate

savings, With in and continued these team improvement cost net this point XXX sales profit a basis margin. produced

Australian Our demand the parts. of New mobility team by achieved related restricted the for these and spread prevent government which steps Zealand COVID-XX, to results aggressive generally despite auto and

our sales sales Australia growth at commercial grow in June. investment In Sparesbox we trade NAPA initiatives of sourcing optimized levels. the key XXX% and Zealand, as brand recovered online our from pre-COVID The have in other double-digit through fact, openings future. growth the continue New such the driven these of and than our prepared Zealand, retail in business. offering, global volumes, drivers sales for And and important and the for growth operations and growth online capabilities, retail are greater sales new strong store In NAPA in digital New execution pre-COVID by been across May additional to rollout to Australia both commercial solid and have

said with to on performance further positive Australasia and So our as expect in build before, this we pleased very are I momentum.

billion, $X.X down Industrial XX.X%, EIS to the Despite slightly is XXXX quarter. in sales America in Group. were as were addition our the a offset other divestiture. climate, XXXX. as the group global now the this in relative up months well Australasia operating North challenging margin Total produced contributed XX.X% acquisitions, in excluding by to Turning industrial of down which Inenco Parts X% sales sales Comp first for and to X flat the

further beginning Industries, the the mid-March Motion slowdown in declines in Looking with continued quarter, throughout at in each mid-teen sales month.

and equipment we operated in had with we and steel, almost second such in difficult saw positive in While paper out trends recovery iron accordingly industry declines lagged every pulp product as category and industries a sector. every we Still, automotive. the in and in and played anticipated environment, quarter. machinery, a That

are for First, more work, which hydraulics power customers including plants our our and expect to transmission, their others. industrial of among core and conveyance, we returning reopening categories improved demand

on Second, our customers that orders CapEx the hold are months. beginning for were past to several release

indicators, June, in industrial such Managers improved which our we benefit the the production, months pointed to activity in ahead. industrial and leading Third, business industrial Purchasing Index as to expect

businesses, customers. on more productive meaningful our June, performing been drive with a has Additionally, by optimize the omnichannel capabilities sales remote Inenco in been existing their for sales operations. Australasia, quarter positive of and restructuring Motion is in and new in team provide initiatives, structure effective there to other In Motion's total Industries incremental their sales which organization and Motion both enhanced and selling. aligning team on is has the also team website, including to cost our strategic the This sector. executing with And drive as several driven focus our the in growth mining customer significant expected sales rollout to savings transformative with coverage well, new the of strong

digital In cost branding our utilize with team and volume. reduce incremental to The Pac. continues the initiatives American on integrate their will and technology Motion's North assume enhance addition, focus proprietary Asia team operations will drive website Effective new and to Inenco ongoing August, platform in this MI and to name further capabilities their structure.

sells Group representing industry customers, sectors. diverse of Parts Our a thousands of to cross-section Industrial

before several to expand services have in end and XXXX. of continue including acquisitions and the automation our We solutions bolster to areas, products offering through robotics key our small and plans a bolt-on

So about in we operations capitalizing the additional confident ahead. move on quarters our growth these for industrial forward opportunities

planning we'd now the comments strategic our So make And a business update. to future. on few for that's like our

business the these industry our with growth and positions large on of X% automotive are recent to and steady consolidation in We our segments. portfolio long-term markets, reshape excited strong to market-leading businesses industry end opportunities. have about X% and brands industrial actions solely focus and Both fragmented and fundamentals

near process optimize recovery our initiatives, to for As momentum, planning also we on we execute on and our our readiness have rate. post-COVID strategic build next accelerated our improve term year our

branding and our NAPA share with excellence and expand Our MI strategy on strategic growth new further framework leverage digital enhance global our more the is brands, and out our operations, intended introduce customers, capture acquire services, to global productivity. and new wallet expand and strategic products customers operational acquire our innovate build footprint, offering, and geographic existing businesses and that continuously complement existing

use and driving higher framework ROIC of to delivering time. growth to teams over on expect flow our levels We and focus profitable free cash this

look to So give for with it to that, hand Carol deeper financials I'll a quarter. you at the Carol? over our

Paul. you, Thank

other impact adjusted charge XXXX restructuring results to and shifts, excluding which were pricing as sourcing quarter as items, and costs many We're to GPC were this decline $X.X the report environment favorable gross divestitures and an goodwill decrease our increase previously, XX.X% associated to These billion transaction, global focus business. automotive on the category XX.X% of operations, in mix of divestitures. which excludes on primarily a gross pricing or mentioned a impairment As primarily a quarter, volumes. acquisitions from margin of margin, our quarterly strategic or XX.X% including reported Total higher to businesses. which our due the will XX second points. actions favorable The initiatives supplier second XX.X% well improvement of the sales from purchasing partially and high basis reflects in as year, in in compared in morning, adjusted of consecutive XX.X% comments, last continuing income. pleased inflation tariffs product XXth from management relatively well were stable remained up improved basis, XXXX, levels in with lower offset by in incentives The as down

X/XX approximately thus of was price pricing both for sales far XXXX, the year. automotive, supplier our of the the So X% through balance only with for on the quarter X% of trends, inflation and increases Based X.X% on expect total we for segments. of industrial current second minor price impact in inflation

administrative This on to second selling, or the Our other operating year. cost XX.X% in actions of adjusted The $XXX sales, primarily from implemented represents year. the last our million impact XX.X% down is quarter were positive due which basis in expenses far expenses and last thus an were XX.X% in of from slightly XXXX. up decrease

schedule $XX well savings the pleased for initiatives announced we're achieved teams total cost in reductions million our on was We're As execute that of our in in million quarter to months. our mentioned report on call, in million plan another with to the through last X this plan, that ahead $XX expense related $XXX continue second to savings having of cost a XXXX.

In addition, to business a incremental the second for been initiatives our our on number changes These have of $XXX the additional initiatives related than adjust structure million in COVID-XX. cost more contributed conditions quarter. teams savings in in to executing

$XX total, as furloughs travel international we and approximately and by merit headcount reductions, rationalization generated $XXX million deferral pay subsidies million pay savings operations. received increases, well quarter the our reduced related of pandemic. driven management in savings the reduced in These So in to cost second the facility as government include during approximately by

target year. our third expect savings the we're towards to $XXX Looking this show ahead plan, on fourth to and to track full for exceed million we quarters, and further progress the

said, That expenses our of XXXX and cost while the environment look COVID-XX cost structure. while uncertain, continuing sales related optimize back are government through to to be improve, focus our second grow business manage aggressively conditions business savings to will accelerated However, the increase for our volumes the to reduced. remains as half we pull subsidies also and sales

quarter, and and facility with million the cost total, gain an $XX reported were charge costs to of from several insurance our a These impairment transaction we in in for a and European $XXX in account goodwill industry for remain goodwill restructuring, strategy million fire. the ongoing During resulted Europe adjustments $XXX sold to a accounted We pandemic. long-term noncash COVID-XX-related the business, related caused million for proceeds adjustments in from in and by uncertainty the Europe. impairment accounted nonoperating million charge volatility particular, In $XXX growth and our expenses. COVID-XX of in as fundamentals market the confident operating and the goods

in for and expenses quarter comprising nonoperating year, decrease adjusted sales. second total operating last XX.X% adjustments these an mind, a of were With reflecting $X.XX XX.X% billion the of from

Our total segment profit in on the sales was second decrease. XX% a $XXX down quarter million, XX%

segment total a segment sales margin increase our profit X.X% for X% of divestitures, to XX% Excluding X.X% year declined and an on was basis compared our decrease, XX points. profit last

for prior quarter slightly the rate adjusted and tax from was XX.X% the the period. XX.X% Our second an on in down basis

net $XXX of in $X.XX from with second XXXX million, operations quarter per compares Our and or per or million share $XXX a $XXX was continuing earnings income the $X.XX $X.XX. of loss net reflected share Adjusted to share, per million income in a which XX% loss decline. a

now discuss our quarter second So results by segment. let's

margin results year. to profit operating was X.X%, from X.X% the revenue in our in was quarter The automotive solid the quarter improvement second second compared prior U.S., XX% profit primarily $X.X $XXX of with for Canadian businesses. Segment million and the X.X% at Australasian XXXX. reflects in of Our margin margin down billion, down

cost by benefit was this driven As the reductions international Paul of businesses. and our subsidies discussed in government significant earlier,

QX were decrease XXXX. the from $X.X a of industrial in sales quarter, XX% Our billion

profit down down divestiture, at or of approximately and down was EIS million sales XX% X.X%. XX%. a the were Excluding excluding Segment $XXX was margin industrial XX%, EIS, flat the from ago year profit

the throughout sales our and To quarter, challenging of conditions July positive complete to the with improving teams relative their environment automotive review done an we're despite that job business aligning the businesses our momentum continue of outstanding reflect industrial the have operate industrial environment pleased our well. cost to they the and demand results structure So the quarter. second across segments, and sales

representing total sales for an of and month industrial expect the the approximate a sales flat in decrease we XX% the automotive to July, with the X% our be prior For segment. increase sales year, segment

So an we continue while are the months. coming significant operate in of cannot full of and in these environment sales uncertainty impact reasonably the to COVID-XX forecast encouraging, trends

it guidance this As at a prudent time. we our to financial is result, believe reestablish not formal

the So sheet. let's comments to balance our now turn

Our billion year, $X.X the prior XX.X% the down decrease part accounts was receivable the due sales of to from for in quarter.

remain the to quarter, agreement and to in company from last decline In resulting year receivables to million an further addition, in of during in accounts the We confident receivables strengthen our serving which closely the financial to receivable into our are in a sell a second cash $XXX monitor institution entered business trends, pleased with our continue position. we quality the of current collection and conditions. light

and quarter. last inventory purchasing due $X.X XXX%, Our is volume, of offset has last June X.X% June from $X.X for billion down payable effective from was volumes our slightly XX. Accounts acquisitions. was June At XX purchasing and of of the due to inventory at from improved down XXX% billion, year the reduced impact which management at ratio inventory the in March year AP-to-inventory to change XX, lower by

$X.X down with our a cash credit debt total sale defined well our EBITDA and from at At with debt XX. proceeds billion used the compliance Our billion as covenants is sale $X.X in of in billion last were X.Xx XX-month from XX% from has strengthen debt June compared down accounts improved position. receivable in at to remain The S.P. XX% to $X.X X.Xx and as total cash XXXX trailing our quarter. the from of March pay debt we XX, to agreement as Richards the of

quarter, credit at billion which into were the total increasing us billion to new we made $X.X capacity to from XX. during our addition, March agreements, international credit $X.X available second In entered available

XXXX, operations, March cash approximately from liquidity of from $X.X which XX. result a $XXX we is have up in in actions, in our we significantly July XXXX. improved significantly far, $X.X As with which from available entered at is million position generated these Thus billion billion liquidity,

strong. is flow cash free Our also

deployed While the we COVID-XX we we several capital modified key for maximize to our cash early priorities value. preserve businesses expenditures, cash, billion crisis, key These evident our the growth priorities deployment strategy $X.X reinvestment during of shareholder capital in capital in share to the committed over through X near-term repurchases believe in across and in dividend. M&A X April are serves They to the last net remain which years. divestitures, areas include the

expenditures million suspended million For than XXXX, initial small we our for $XXX $XXX bolt-ons. plans reduced to in to approximately planned other $XXX further capital and million, have acquisitions and we repurchases share

We have conditions as and continue sustained to are these prepared we dividend, plans we years. for support as to we in will adjust business consecutive the improve confidence Likewise, XX gain increased recovery. which a

So for of financial presented well it second turn update work, half and that, especially balance enter second on and teams for that's the for sheet I'll our back many positioned while did the challenges, And we XXXX to our cost We quarter future. over structure the thank the the quarter. amazing them Paul, side. you.

you, progress We important significant Thank quarter. the in several areas made during Carol.

initiatives with speed safety excellence are call, challenges and the the prioritize our today. growth results the of confidence and key operated people, and of to beginning well associates messages recap increased portfolio our continue customers and and GPC and operational driving well-being positioning of outlined at teams Our at agility. on To we our while the our executing COVID-XX, GPC through initiatives

continued trends and actions. quarter automotive, margin financial improving from transformative cost in performance expansion second Our gross benefited sales

free and us these streamlined with operating to a strategic simplify taken organization, growth deliver industrial and in optimize maximize position our to strong as sheet, All on move to finally, flow. to framework a with strong well-defined focused and efforts, coupled of forward with our growth and intended balance we cash and all puts our stakeholders. margin portfolio, steps for expansion operations the continue creation automotive excellent And more value

into to GPC. that, term. look impact So scenarios for on COVID-XX executing and the it uncertainty, updating the evolve We with your your turn of strategic positioned back you our you and Thank well various plans pace questions. our XXXX over that forward may is and despite future near the in to recovery, of for progress. GPC the interest for economic And operator we'll prepared

[Operator Instructions].

is Our Jefferies. first question Jordan Bret with from

it automotive This It missed lows, remains pressured. the it July Jordan for trends for but looks U.S.? I provide looks you it the remarks, Mark like may did sales Bret. in U.S. has but the prepared business And from is like on the improved the maybe have

Mark, this that, go Paul. touch and is again. We but about it did on talk ahead I'll

Our the month finalized and automotive sales U.S. right now in of positive now we haven't right July, but sales in are July. our --

you maybe it can of when more DIFM? And we see to I can you pressured. about Okay. know the sector between segment? some mentioned talk gap the DIY and seems And like in expect maybe improvements public DIFM some are the customers

Yes.

in XX% to down I low was in both to months, May April, at trend we're and DIY was in above July. April. turned a June. in single in down, in further month that both of And digit June. we're digits May Actually, business was high-double up look our and digits and and then down think, DIFM to we double strengthen seeing as Mark, mid- the So quarter, even close low positive the

back We are seeing a we little bit. but down it's a bit of as go still trending bounce July, a into

is will, and Mark, bounce that they back place we market-leading And to position as be, is back the our commercial look the to as NAPA best it. segment positions believe firmly long-term and We going to so it with still sustained miles driven growth. for in begin DIFM at bounce it,

U.S. then the What weakest? during and And regions Great. can in Okay. strongest you quarter? just trends talk some maybe regional were what were about the

sure. Yes,

past regions out in couple the the we've region. as in seen in So quarters, were the strongest quarter mountain of the

X the were look business, that that as the really the hardest despite you, then that I the growth down country again, think, good So Mark, Eastern and we by both to that compared the The good point across full -- our was for growth of part a despite -- in quarter. fact of probably that lockdown a saw in areas lockdown a then that the the the surprise were strong the U.K. Northeastern weeks. rest strong, a our rest Zealand area seaboard. relatively the Australia, of Colorado, the hit, better portion would of of for And in the time, And impacted again, was don't the New was, resurgence and Montana, Europe, I least at full fact we France will COVID. really we in be Wyoming, real results. out Midwest saw to part

is Our with next from Montani Evercore. Michael question

for wanted of then could, of course can the municipal the Paul, the Just color evolving AutoCare kind there. us if mix just core of X the of and if state just some had then side. And a parts commercial to I of, between, the across now incremental how the ask garages, I NAPA then the business you versus commercial on for saw And there the quarter about breakdown into follow-up. business remind and those sense July. the segment a you

Yes.

account you commercial AutoCare a approximately the members get component NAPA program, then XX,XXX fleet XX,XXX business to key the we -- now program, of government Mike, is AutoCare our like. our and which the major So into segment. as And have in our

total and AutoCare, them. our we business That to than what say, was very as business. municipality closely take. XX%, fleet imagine, with to We mentioned pleased remarks, can jobbers secure automotive fleet as better did independent our funding. worked government you pressured. And business. give our many Mike, with U.S. are of most worked with As we the I with was would I in centers close we prepared the was our AutoCare business, is PPP think that NAPA of or challenged is and AutoCare I my

And businesses driven So as those are to will we doubt financially again, begins that bounce sound. miles back, no back as business well. bounce have

Great. follow-up around just -- had performance the during jobber was was That quarter. the I the

ago? so have how the that if to jobbers kind trends all of some then, versus update wondering compared can U.S. year already? on of how I'm you you called many their now helpfully just trends you us out So And have a

just Mike, the -- base trends as our jobber look performance, -- we're NAPA the and with What those that country. better is more we that in more NAPA stores, the seeing are and Yes, they're X,XXX X,XXX who around acquiring jobbers. we performing very with larger, certainly, our getting consistent in And terms independent our -- certainly, entrepreneurs, there's strong of In and they're outliers approximately NAPA fine. that, and stores. funded, independent have our owners total, they're jobbers bigger own

in good they again, And the closely And emerge fine. as did get as we from going back PPP majority on be owners, we again, cars secured in with all the financial I the pandemic, to So shape. road, to work are and just our are bigger leader ensure funding. mentioned, jobbers the

offer? environment just the good have private was you're from there market. then I rational in one just last rolling pricing label understand is already the commentary where some around Carol. The space, both But and Okay. U.S. in in out to there how And Europe, the the is wanted also the

give a has We to on North Historically, I'll weigh in you Carol been wants the big well. atmosphere in certainly Well, in you a Yes. same. -- -- as And U.S., here sale the generally put pricing month. the very America, see given brakes don't you Mike, viewpoint. because my spike maybe

we've here who North And few in we a big different normalized a no There's this one Europe. have the very through years, as So pricing reported seen, really morning. America. in competitors, also atmosphere it's

as the again, atmosphere well. is anything, so add? Carol, And pricing you Did you'd have there solid

anniversaried related -- point we the inflation of pricing Having consecutive had there's way gross go of that through in XX second we really that's our this initiatives, And we don't And year, sourcing how the lot second and the price and tenders as have. back we a don't again, and foresee global increases, really so a the ago, margin of a driving that increases category tariffs. Yes, or we our reminder, XXth we're we're improvement really foresee really margin on uncertainty half, half, at you guys that said we've lot to gross into inflation. strategic in Mike, tariff or saw of hanging just have management. that's to whether global a quarter those as much the months that,

with question Horvers Our from Christopher next JPMorgan. is

the be your a mix of competitors? you share front, given was geography Or DIFM Northeast the given have it is versus I Would issue? you the rest trying differentiator know what mentioned just yesterday, you it market commentary the for of municipalities your as delta competitors. -- on to on Christian big a particularly more positive It's in the O'Reilly's municipalities, sales more stores I'm Chris. would say with think some in was more hit to hard?

strong which we upfront, it's issue. the comment look, just that the market make look over opportunities for don't that share that it well, in, believe We What the is the we in further all aftermarket to -- Christian. it's had and they the that congrats results, green. Well, well bodes of time. got growth -- at pandemic right I'll way us guys operating we've we're a despite in indication for just --

still believe, lot in we lot there. place think earlier, DIY, We quarter, the this in be -- for on what's and there's stimulus long the As lot mentioned folks will time occurred a of in There's a we hold in to aftermarket have out hand. the well their that who as in see certainly, a the of us of up run. is surge this in the commercial segment, automotive I dollars

maybe the the at represent look industry, remind competition, the X of to we XX%. As And certainly and I'll it's Christian, XX% about our just in big you, X. big XX%

model on DIFM different. and side. XX% XX% just the DIY We're Our is

driven we that back. miles our see DIFM firmly come than So recover point And I competitors out in begin business. come to business DIFM we're a the believe and our are And seeing of improvement what back, month to are. continue different we'll in that that we our July, do as model would

incremental helpful. for then the in from management but rest initiatives, And of in you've low $XXX reductions That's you call, the headcounts, very pay the sense. don't it Makes reduced know out size could if savings could -- million also you mentioned the in I that group?

Yes.

about So $XX permanent cost we XX% we on facility plan and those QX last those Many impact at the we subsidies we of related and introduced that mitigating in we're the areas payroll-related. be put achieved some is QX see to in ahead there, And The $XXX looking million that in that. and were place, pleased well. savings other cost million BRP savings, payroll-related, actually other million we those for the of results in of mentioned are probably some are on cost really to consolidations QX, giving COVID-XX. to related and that, We'll XX% were that of in as the incremental government We we XX% to our year-to-date. quarter. XX% $XX talked temporary, about track to We freight. year, had savings us

and to those said we working We're But make travel are entertainment, many we hard course, permanent. as what can Of rent. temporary. see of before,

increases, of changes. things that. at merit voluntary delaying some and structural further So furloughs, like looking knowing the we're But also involuntary

ahead we cost the hope of no, those expect permanent. million But half. savings is second the of to So plan pull have those be on to But we're back permanent. do some in $XXX we that to going

question from is next Inc. with Our Imbro Daniel Stephens

guys, for from kind miles like miles but DIFM to be lot what given -- that, would for for think mounting dead a your we you commuting, anything or the outlook kind industry assuming like recovery of outlook and what a you XXXX? the do beat into you uncertainty one, driver. just are of driven? "normal" going There's as horse. But we back from like experience, think XXX% guys' looks back there mentioned impact work be you home, some less is you being like Or to here, that curious, biggest not the driven Paul, your of your of lingering about get

Daniel. Yes, Yes.

we their anybody's point. aftermarket, looks at this the gasoline is with to fundamentals look, moving the either What at will be I believe what as of look jump utilizing up look vehicles. think, new more down very going XX.X normal folks automotive back with like on across have prices or that we -- as I reluctant on as more we and that the But year-over-year. we've business are -- are now to we the -- vacation, travel age airplanes years, that we XX% see average folks guess and So the vehicle and be, to

increases that of business, So do But eventually, will miles-driven we're look, seen the that like But a the pleased we're likely we believe have are. meantime, take enjoying we'll time. bump a we're U.S. outside And our back bit recent in years. enjoyed those the most it nice -- in and competitors nice to get numbers of seeing very retail we our a very with in

mentioned Australia bounce as a I in back we've New seen quarter. reopen spectacular Europe real well So And and a Zealand business they our in nice markets. their had as just

aftermarket. And So all bullish be in incredibly to we fundamentals all, the automotive solid. about continue are the

Got it. dovetails next going question to was be That's helpful. That nicely, on Europe.

into mentioned a I than result is a snap back you nice and June. think lot the there, feared better

Is it driving you growth. think market you DIFM share markets? market. There's Because heavy just Can higher in what's organic of said incremental think that those level parse out catch-up of spend? a that's growth? what high France driving level are growth? that Or a I you how single-digit pretty is was? still you shut gaining Kind down of

back. of So bounce level I by that surprised was

our of as I improved markets. is Yes. which It's that June we all basically, terms launching Certainly, carried expanded strategy market we good is mentioned, month great when in footprint We're on. is incredibly our you're heavy XX%, the was into We've the Germany of suppliers. Daniel, the encouraged It's entered Netherlands, I as at We've throes what X-plus over side, global And surge ago, into NAPA, demand. in on team. the with our saw that our of we're captured spot big look has the a a strengthened are Europe we strategy But we've bit in our July. footprint our as We've our the pent-up years back for DIFM DIFM. management across of label. payment us. launching We've relationships expanded our private as well. leveraged -- bounce

well, very we well go exciting X us track of cost strategy Daniel, will we're forward. that to bode ago. Europe. for what's We to deliver the we for And that on online/omnichannel think as early is years again, And finally, the that in days we are right our as committed savings developing on

in our So position optimistic fragmented we continue really very that market. to about be

That's Got then the industrial helpful. for moving And me, it. last one side. to

better. leading your mentioned you you we're still indicators said Paul, I remarks, June think, I Carol, got July. But think XX% in trends, during down

on So you things? are term, still help me those more pretty you're the like can pressured. outlook, It X optimistic but reconcile near maybe feels things

those there to for indicators kind expect So through? of what's see come segment? outlook when you do that the And yes,

segment of mining New and And industrial, -- U.S., in we're over And question is again numbers on now Zealand MI Motion in world. at I I have important It's seeing we sector that you the a Southeast really appreciate the quite a surpassing the shutdown as in great to the well It's as real business us. the go Australia Daniel. and that for our appreciate mention our and strength Yes. well, I here part in Pac. Zealand, would before despite business performing U.S., I New Asia, in the Asia

July now, QX, improve. seeing what we're in reopen. reopening. saw is across factories we right happen, what we are Plants begin seeing And trend are going what we that see an U.S., still improved the we versus that to believe are to seeing in we're we're but down, Here Daniel, trend

that to are production We're beginning Some industrial CapEx the been of leading on hold. seeing showing indicators, PMI customers numbers. release have big and our orders improved

industrial reopen. expected, believe throughout as the we'll past. lagged has industrial we look, recovery, QX we which our do to So numbers seen that the in as in in factories see as continue continued the improvement well QX we've fully automotive that segment But

coming question final Raymond McClintock with Matt will from James. our And be

Ingles, for filling is in Yes. Mitch This Matt.

investments. your digital my question on was So first

aftermarket. acquisition more Sparesbox attributes other you your to Have force you a forward? been leading driving implement for able see seems for given the more last these investments going today, automotive Your timely regional speaking, to even CRM and capabilities the year Or broadly auto Australian do businesses? interface as digital your what digital

up the XXX% as mentioned, a for we pick with market teaming that be team We've the online, and America. for would Mitch. I doing, the of launched. And around up our pandemic. digital is Mitch, to sets apps of talked you And well. skill that you bring I I our very in a buy as with other ship in what partnering appreciate world, digital European capabilities know we've new timely Australian I And we've that We've Yes. business, with about delivered curb expertise up much our that our recommendations. seen Well, our to Sparesbox, the we've here transpired of a great given is search home, been improved out us Most Sparesbox. lift. -- we've of that initiatives. also thanks acquired the all was are bringing side we'll product couple point They're And real businesses things us our up, the Europe things businesses. we've store. for doing pick are improved. also across key think factors I the of one a utilizing in acquisition at And we've question, and ultimately, in for what's teams -- North to acquisition

at factors our initiative well. leading And improved also, solid prepared we've I growth. online to So a are really that number of Motion we've as and remarks, as my enhanced solid, in mentioned

segment very bullish we're So on team we're very and ahead. digital move pleased. we the We've got as a that great side, on

back session. like call remarks. for We management I the to our closing would question-and-answer turn have to the now over end reached of

forward thank you Company, We'd and Genuine quarter interest for on support updating your like participation We results. call. your today's our third to you. of and we Thank look Parts for in you conference to thank you

Thank today's conference. conclude does you. This

at may disconnect your for and time You lines thank you your this participation.