Genuine Parts (GPC) 22 Oct 202020 Q3 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Genuine Parts Company Third Quarter 2020 Earnings Conference Call. Today’s call is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. time, Sid like of Jones, this conference turn Investor At to over Senior Instructions] I to would the Relations. [Operator Vice President ahead, go sir. Please

Good Executive With Financial me today are Paul and joining Company morning, Chief Chairman Officer. Quarter Carol today you and Yancey, our Genuine EVP Chief Third Call. the and Parts us Conference XXXX Donahue, and thank Officer; for for our

Genuine be Parts webcast and Investor As a found a presentation on that conference the reminder, website. include can Company, slide Relations call today's

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

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

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

are staying us conference and you Thank Welcome and our you call. well. you, to earnings quarter We third and appreciate today Sid, XXXX joining everyone. good hope safe morning,

focused and Industrial to and of free deliver results; down suppliers, and debt of health to safety include in we of and in a to cost liquidity; remained the value, working of and initiatives capital efficiencies our financial finally, position, we our strengthen as our pay execution reinvestments Report. Automotive our on strong cash segments I quarter, shareholders ESG which to continued each Corporate enhance customer initiatives effective of with Carol business, flow customers, management our including paying top and XXXX strategic areas then strong operate; operational our questions. financial capital debt our ensuring communities which and and progress employees, our the Sustainability of global covering the also strategic look and deployment, priorities, taking actions for drive During further the advanced appropriate; repayment release these forward today, our we and consistent dividend and to your the our in

the to teams execute managing agility challenges Our of the of with operations COVID-XX. through continued each third our quarter, aggressively through

a second connect fully service. work successful employees, associates, to to measures firsthand their readiness prepared excellence, We businesses. visits our the customer plans, engaged are while maintain We which with with our wave and also of operational Through environment, providing can proud has to of and affect to first-class talented begin a level the and with we hard execution quarter, should through tell operational our we at and our customers teams required that field every suppliers. passionate are adaptability comprehensive and work materially resumed safe commitment effective and you

the team a and profitable group Products members the global driving June, on growth business Business quarter segment. big you for our in initiatives portfolio streamlined our our Automotive to thank XX,XXX-plus third and divestiture Upon our productivity So, entered of across footprint. Industrial focused of our we

of steps one several is operations non-core key Company. the of exiting recall, transformation in may the you As

core. In addition, also in expand we and businesses our are return further investing to higher strengthen

operating our a initiatives in achieved This of excluding improvement and We growth sales up of was taken sales improvement to per year, and the that margin through X%, was the benefits our earnings for from to impact was billion, our and up a our were Total third decline in margin impact $X.X businesses. second the both across X% expansion strong and divestitures. of quarter the share performance of the quarter solid on businesses resiliency significant our strategic the margin last $XXX net a Total $X.XX, each financial third reflects the from operations. cost Moving in SG&A, XX%. was of results. XXX actions basis-point financial COVID-XX. the achieved quarter, gross XX% progress Industrial a due in million driving income Automotive adjusted and Adjusted

organization first Our has our the savings generated savings months, cost million full the in in $XXX have significant across plan, we the Through cost achieved target of nine XXXX, savings year. XXXX. for October announced already

in actions operating COVID-XX results. In our boosted to response cost addition, further

ahead, Looking on to focused finding remain and additional further improve savings cost structure long-term our we cost profitability.

distribution month. efficiencies of our Let gone facility productivity this me would important impact has for systems one XXX-plus DCs the customer the operations newest to we'll and to automotive Nashville less initiatives and and be this smaller, By or of the efficiencies close work our operational distribution enable stores. the equipped We mention on systems many and like center these the team network. of center, Tennessee last smoothly, to Nashville, our consolidation NAPA productive a high NAPA able Nashville despite XXX,XXX in operations line, with thank The We example with in square-foot project. to were great just U.S. excited consolidate improve to of of over open bringing COVID-XX. levels. equipped is service opening on service

to investments We will additional in continue years chain make to the come. supply

working our while We of enhanced quarter flows. also substantial another cash generating our liquidity, improved capital,

third decrease North represented By segments. Europe Industrial sales. total are quarter automotive through and of XX% XX% Automotive us attributable helped a total QX. margin. to solid XX.X% business deliver consistent in was North basis-point the a on sales A XX% sales XXX compared second Automotive approximately and our XX% from top-line U.S. revenues turned were sales down down billion, global year, sales operating quarter in automotive Australasia. a and America in of recovery improved with also the our to Comp from the $X the of sales XX.X% In X% up decrease XX% Group from in a significantly is in quarter. improved Turning last X.X% Comp each X.X%, from sequentially improvement geography, America, decrease in in XX% with the and growth pattern Total XX% were increase for second much X%, to the positive, improved were quarter. the month the the QX. to decrease which

U.S. Canada, sales by were was basis-point In XXX X.X%, for a XX were QX. XX% encouraged impressive margin third and and increased quarter increase margin up in the points. addition, basis we sales In an by for operating from up X.X% Comp strong a in improved operating automotive. decrease

third So, up a continued the our low-double-digits customers for retail to team. for solid Also quarter North Canadian outperform, our to in sales quarter. America,

retail segment drive While this moderating. although DIY July, is we sales believe persistence this in growth, demand remained peaked COVID in the continued surge through solid to customer the quarter outsized of as gradually

through merchandising rewards promotions continue store We our strengthen inventory. positioning enhanced and to refreshes, our NAPA ongoing initiatives, and program, targeted as such retail

and capabilities, expect that continued doubled NAPA direct-to-customer In retail and fourth at exceptional retail new This the led addition XXXX omni-channel the we XX,XXX including has customer. in addition, and growing recent our volume, value drive omni-channel sales SKUs strong to suppliers shipping for continue to beyond. growth our from the select of online quarter

that low-single-digits to are an last DIFM back the becoming on and Moving third down is quarter to much on consumers road. Sales accounts from commercial indicator quarter, encouraging our business. were mobile in which getting more and the improved out

continued slow sales each unaffiliated growth. posting across driven accounts strengthened recovery, trends QX, relative miles the repair way leading of our independent positive to our customer their channels sales As and with professional

pandemic. months we a been most pressured, on especially budgetary and value key these These our impacted customer optimize capacity to as plans constraints. customer the business and systems sell is fleet plans our many and the these structure, are running market to government as and share. ahead. airline on slower strategic our auto improved focus NAPA customers strengthen enhance conditions to care, sales programs designed national maximizing parts segment teams industries, the due as less significantly further care to improvements forward, accounts, This NAPA's for such commercial of our in pricing remained and our this Looking energy expect inventory of true proposition, effectiveness the headwinds, as more recovery To Among auto customers, by and/or these capabilities, which of segment new gain well executing at counter than availability. government other centers and number operations initiatives fleet accounts NAPA have digital well are and and as as in the

had drive include progress ahead. the compared these decline. significant Total Europe, quarter, improvement and focus a sweet in made car continued tremendous impressive of X% prices the results meaningful rebound improved the areas has our comp quarter's period X quarter, in sales strong spike up which XX%, on driven. number sales capitalizing low job XX%, sales, the fundamentals In growing a and While an quarter. favorable in recent were second miles trends last the mid-teen gas sales our were team expect aftermarket spot, a fundamentals favorable And and in our and aftermarket the to in XX-year to vehicles third strong we team that. new up sales in from a the in Those of in did decrease is to

marking quarter's group. comp, European country growth, operations drove and by this a surge are improvement, very margin that each ongoing forward pleased we sales in a Importantly, broad with breaking demand XXX deferred down sales the initiatives, in maintenance repairs. savings basis-point positive recovered significant step our our this overall for for driven cost performance, In combined with

brand addition, be has to effective driver. the powerful In NAPA growth an proven

UK represent We of grown introduced our roll UK one brand France, have in sales European NAPA the have this a and percentage than and strongest quarter, plan low-double-digit and NAPA out sales total Germany branded the month. it in this We past to in products year. in posted the to less

the of brands reminder, initial our the discussions back XXXX. for private time opportunity in a As in at to Europe AAG we acquire identified

larger to encouraged by with growth the Likewise, are focus existing contributed NAPA new the our account We growth the including accounts, customers for potential. of also driving its brand our on and key recovery. quick and national acceptance excited

by So, a and bottom the the lines. in top on Europe team job just fantastic both again,

sales Zealand. team a reported Turning quarter sales exceptional a our and operations automotive Australia follows plus core to This total comp strong in second This and quarter. total now X% of at results, sales increase in New sales increase XX%. X% and the with increasing XX% another up

XX% continued pricing is a well generated new operations and growth, strategic brand, a encouraged NAPA Australasia for BXB our basis-point due several ongoing a team region, DIY environment We're with Our ongoing and as customer the to initiatives XX% and NAPA store and restrictions Victoria. operating our and climate, the enhancements the sales commercial These executing as To commercial Melbourne, as growth the other team in cost in robust strong marketing. and and These COVID-related the Australasian rollout for improvement both, across in for of targeted quarter retail BXC sales of is this the our initiatives. strong select headwinds the platform, reflect the digital despite and quarter. XXX include segments current sales such mix. margin sales on by drive state actions and markets, the well-positioned openings, the across key

we and Europe and summary, performance in with North are America, across So, the in automotive Australasia. aftermarket, pleased the our recovery

the our Comp to let's down So, down for Industrial global X.X%, sales were $X.X the savings Parts the in network of in decrease as In month XX.X% a sales QX. the XX.X% X.X%, trends improvement cadence excluding an sales XX Total in over quarter. were in to billion, and the focus for our several in for turn These well results from drive as cost were as the optimizing our this X.X% a indicators strengthening operating each and the compared basis-point North improving group sales sales meaningful second saw industrial We divestiture. net EIS an distribution results sales months, to comp decline last now, significant Group. quarter. down quarter. ongoing drove America, margin improvement total our of

also to capacity activity ahead. and all expect increasing we Specifically, industrial as have pointed customers would in we and sales capitalize add production industrial plants, their to the continue the trends last will these we ISM PMI, reported, that since We on onsite more months opportunities. utilization reopen

of among We are see to customers, also in of deferred increase crisis. many due our to CapEx beginning which an orders were many

positive growth of Motion's number a MRO the to signs further team in see for has competitive leading industry. we the executing strategy the our So, Throughout our position bolster industry been pandemic, on ahead.

We our we added optimize capabilities, enhance last of expand are Motion focused initiatives has value and management quarter. re-launched solutions for our category of which and and strategy, and website, Company on our industrial the Each initiatives to services Industries effectiveness these customers. pricing our just the

our operation, the group For quarter, was solutions strongest automation posting growth. high-single-digit our

this engineering to control, area building motion mega North robotics including solutions due group. automation customers. also operation during extrusion, the gas of our our automation trend out complete and country. on application the the of America impact the that automation region of aluminum and of oil quarter. and are pleased our plant in We were products support was growing the which of complement We the businesses at acquisitions COVID bolt-on services, In significant weakest and strategic further growing in contrast, southwest U.S. in Two to these expertise the and to and specialize MI three sector

third approximately expand hydraulics in service are our contribute to Motion offerings, to million million Our revenues. presence products $XX at acquisition $XX further operations, geographies overall in expands annual and Canada. and and strategic Combined, our these expected business

performance, So, to American we throughout trends encouraged summarize and industrial our sales the quarter. the by gradual improvement North were

very-disciplined well the industrial Our for we operated team the ahead, in was strengthens measures, months as continued progress their cost and economy control believe also well bodes further. applying which in

delivered anniversary single-digit acquisition, increase the sales Asia July team a the for this Pac and quarter. low Australasia, to MI Turning our marked X of

mining share. to on market to initiatives our we strength gain continue we other are and sales industry, new benefit While local from also of the executing and strategy branding growth drive

Asia In addition, excellent initiatives. cost team is working making cap operating reduction Pac key well progress MI and the and on

capital the in up issued initiatives. advancement disclosure year's Another On been progress XXXX, account our were for to followed that first Sustainability substantially this ESG we To in In shareholders area, issue summary disclosure, with our more to and and such we a We stakeholders. our our GPC XXXX. important has diversity in report these company-wide top update focus commitment sustainability our our among invite about and back with area for ESG across and our the spectrum, we our to key view ESG as practices, ensure aligned the inclusion, developing engaged you GPC visit pathway to expands of This others. learn report XXth, September XXXX of best to ESG. our human report with to Report. our pleased expectations website this

acquiring including And initiative strategic customers a Asia innovating momentum improved exemplified rebranding transformation expanding as our and move customers; branding strategy have and our while As build on introducing the operational actions other positioning geographic framework with initiatives Europe leverage we new Pac; global achieve focused existing the on via cost Key which finally, MI the maximizing growth brands, initiated to products includes share balance include offerings; further These and acquiring strategic framework, ongoing and global long-term plans Automotive building initiatives. capturing rollout a the by bolt-on initiatives profitability. omni-channel brand our the powerful XXXX, more sustained and value Australasia; execute of services, XXXX grounded Industrial and positive of through business of Inenco our teams MI footprint, of NAPA our and our will elements quarter. of the framework and the segments into our of our for forward to and and digital number wallet Industrial strategy the of a GPC new are growth on third we to strategic excellence in strategic into and expanding Business and businesses. NAPA to

of now, I'll our to over for Carol? turn it Carol review So, deeper financials. a

Paul. you, Thank

report GPC areas XX% billion divestitures, and quarter, quarter the As up down quarter. sales results excluding positive purchasing partially These income. The by mix, in also from accretive management X.X% XXXX broad reminder, global pricing decrease morning stable costs our September continuing our current through product improved a which margin focus due we Based to category X%, strategic the increases were inflation last and improved in has is especially very Total transaction, with focus only of comments from to will the quarter and items XXth shift $X.X improvement initiatives industrial. third basis-point exclude thus adjusted improvement much lower other on pricing performance. a restructuring or our far XXX in which as incentives in the operations, the sourcing. price the EIS We're were remained volumes. offset limited this in supplier was from sales. decline quarterly divestiture on pleased in XX% driven gross of also which XXth The to gross environment, The sales was second benefit pricing higher reflects to year. compared minor primarily margin increase inflation The the consecutive third of in to supplier XX.X% margin, year. to such XXXX environment third last by our little on in and expect in mix gross balance the price operations,

of $XXX down costs in $XXX $X.X both, quarter, of reflects as savings last expenses in nine far permanent million million COVID-related adjusted other expenses actions more to million on With in accordance permanent basis. and thus successfully expense In $XX sales implemented for of recognized last announced year quarter, previously mentioned year we're compared third annual were billion the in $XXX we report favorable operating the XXXX, the third our decrease administrative totaled over million to our representing months. XXXX, X.X% reductions target selling, in than cost Our the XX.X% our pleased savings the schedule. The Paul. from an ahead plan XX.X% and impact and well late with achieved by have that in

In on in response to a addition, COVID-XX. contributed of in our teams execute million quarter. incremental approximately savings These initiatives initiatives additional the in to continued have number savings third $XX

in we from and travel and as quarter, temporary combined, and third freight changes reduced in driven facility reductions So, entertainment, COVID. as million costs, to by generated payroll during savings savings and more cost furloughs, well response approximately $XXX strategic initiatives other the

our will in on cost million $XXX we into to the for cost carry achieve and to XXXX, over to execute permanent XXXX. million Looking we expect quarter, to which $XXX fourth ahead continue currently savings actions, will

expect also focused We to to as have here, continues our clarity on managing as further the and economic will growth and the expenses fourth savings generate we COVID-XX Despite the but quarter related recovery to sales profitability. volumes increase. savings uncertainty, enter moderate aggressively continued maximize driving these less cost

decrease Our total for and the last were operating X.X% $X.X of and non-operating adjusted billion third from of quarter, a sales. expenses reflecting year comprising XX.X% an

X% the profit X% $XXX Our total was sales a segment quarter decrease. in third million, on up

profit, increase, points. of Excluding strong was sales on XXX X% our XX% basis profit divestitures, increase segment and a segment increased margin a X.X%, total

for rate the quarter period, third to prior the due statute year basis, tax the XX.X% related Our adjustments. an down benefit was in of XX.X% from on adjusted primarily

per of was continuing a $XXX third operations $X.XX. income in net Our quarter from share with million the earning

or Our XX% $XXX income per share adjusted per $XXX XXXX which increase. million million $X.XX compares a in net to $X.XX and or share, was

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

X% quarter. prior the billion, up year sequentially XX% Our last improved Automotive sales quarter decline third and the was revenue from from $X the for

X.X%, and continued across XXX X.X% businesses, increase Our XX% by of which profit by margin XXXX. with $XXX driven was segment testament reductions improved job quarter across our on The operations. was a to in a was profit each third to up the teams margin million a basis-point of in compared of their focus our cost results great automotive meaningful operating at our

quarter, ago. Our from decrease in Industrial sales a the were $X.X billion an XX.X% year

improvement X%, is second quarter. the were divestiture, from Excluding a significant which approximately Industrial the EIS sales down

Industrial points ago expansion driven Our up margin year segment North was American cost gross up industrial improved our and reflects the XX The to basis margin margin for the X.X%. from profit savings. $XXX a gains X% in EIS, of Australasian and excluding of and million down combination was businesses, both slightly or was which profit by

recovers. expect progress ahead to the We environment quarters see the sales further as continued in

months. sales an the quarter, the reflect second results forecast cannot of these operate reasonably in and we impact and the encouraging trends significant in continue While full uncertainty of recovery coming operating the of are to environment COVID-XX from and lows the

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

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

accounts financial million to is was inventory the receivable a were X% year, of the XXX%, change of from billion in a prior confident XXth from of At receivables $X.X sell quarter, the continued ratio currency. on quality conditions. X% in down a due volumes agreement trends, purchasing earlier $X.X lower lower benefit end year which our purchasing and of about of AP-to-inventory year. volumes. XXX% from to from excluding billion We to this primarily This impact change the the current XXth. receivables light improved of the is sales at the billion, September Inventory receivables monitor $XXX collection of has Our last our the closely XX% an Accounts and $X.X continue inventory remain the foreign effective pleased was and with of at management. reflection our year, of focus flat of of although payable in to of our and up September the and business we function up last essentially or impact institution June

Our and total $X.X XX% last billion $X.X at from down is second down year the debt XX% from quarter. billion

with approximately $X.X $X.X billion October our at improved available billion June quarter, which liquidity third we position further our in XXst. $X.X the and from billion liquidity strengthened liquidity, liquidity and at During March has we in entered XXth

over led from cash XXXX, the $X.X operations, first XXXX. This in $X.X we from billion of strong nine cash to months which of is flows generated billion. significantly For free up

the capital April near-term early cash we strategy COVID-XX. through deployment reminder, to our of duration preserve back As our modified in a

second cash we times in priorities leverage adjusted debt to key for to to times compares shareholder evident to priorities several debt improved capital capital our remain maximize include to reinvestments areas of in share serve the total in at three the billion repurchases, X.X However, value. last four which our are deployed M&A in the quarter, our end our via growth expenditures, committed net EBITDA, key businesses These These of $X.X across of the X.X the and dividend. years. divestitures, and

reduced we in XXXX, planned expenditures capital to through have $XXX million we our and $XXX approximately December XXst. For initial suspended million share to million, purchases $XXX for plans

While our continue several we've we've we bolt-on plan for pulled Paul also to support acquisition increased earlier, that for this strategies Industrial Automotive continue additional acquisitions back with finally, to dividend we XX activity, consecutive years. has the businesses. and M&A on made as strategic the for and growth which And mentioned aligns quarter,

our work I'll that's great So, to thank in to circumstances. for our progress turn third many over several teams We quarter. tough financial areas. the want under their key made and now significant update Paul. these back for We've accomplishments it

outlined Thank the Through continued our on strong at quarter. financial this the were call, pleased priorities, of focus report you, performance for Carol. beginning top the to a we

flows. in several operating cost highlight expansion, businesses, transformative our continued trends, including savings, margin substantial cash and of sheet, sales liquidity and and expansion margin areas, balance stronger actions results key our significant a in Our gross progress strengthening each enhanced cost

that, questions. at thank interest the quarters to in your We we forward it future we'll our GPC, for reporting you for the for ahead. turn excited in the on GPC. your operator look to back progress and And are We with

Jordan you. Instructions] first Thank Please the Jefferies. of proceed from Our questions. your comes [Operator question with Bret with line

in specifically the Europe of lockdown, as of talk guess, yet maybe as but specifically to as COVID outperform, with the I the stimulus about seeming that's was think you about driving is significant could the of up came as I you then, Europe, maybe some how color improving businesses you've not well, NAPA about lift share as picked much just either demand? us within maybe spent? there. even is consumer the we out service to And When comp could money mobility talk underlying economy give softened Obviously, seen in that it or U.S. quarter, that stimulus or your also strength cadence guess sort you gain

Yes. Thanks, steady we the pretty turned Company. total the Bret. positive in maybe total We In were and turning Company, July-August, throughout much And cadence positive. with flat first, quarter, I'll let's start GPC. total in touch September, on were

As across were we look August, July, the look you Europe, know at market, our encouraged strong, really we're turnaround and is board. we're quarter. I got And They the and mid-single-digit kind did it for a quarter, that good the in in UK Bret. seeing down. through at it that all-in were post we month in there, base. automotive consistent August we of across and again, of us, we And every was but went in seeing we us which September. growth double-digit is was strong total the bit were we really throughout automotive, down, every be as the in QX, our that what's it we what most Europe, -- mean, shut QX in couldn't We're over team shut proud of more seeing I of guys customer France increase and

we independent, saw with saw also the solid account. in shops, but national major So, we unaffiliated big it our increase small

the sales taking market well. And NAPA about Perhaps. go of I into Bret, the the rolling Germany think we're out in at this watch we'll our have think we're UK. But, bolstered that the tell rollout label. really really quarter, UK private and I that guess, to in we're And excited up our share So, XX France, that we're we'll Europe? down and I'd play you, in in out. different categories also product Netherlands then do as I

You the margin might from talk about private label. lift

a label, label, that generally, Bret, do tenders you get bit little the we at private doing. generally global when terms on favorable have that margin have our private that the know, and we on as consider margin The private we're we and Yes. Europe look more a price in label. But all-in for do lower the you the

be on about our in So, global we're we're and and a neutral is, margin. will, terms more benefit, But, to putting gross if the expanding GPC is look again, you it global total you when global dollars share. at our tenders, Europe And suppliers. market we through fact extended when their volume would think more there

had prepared Bret, into team back, of comments, tell a as exactly I brand my and as and AAG saw to Europe. I a talking of acceptance our you opportunity by brand I'm to the the started few first NAPA played called the most And would. guess introduce what we European we we thought And encouraged in real out the hoped private recognition in honestly and years it's out is markets, when I'll

side, general? bit you in more I there that a regional on going talked see talk about follow-up. the and in any I in see some on U.S.? Carol pricing Do changes then, have Do you inflation anything guess, think, the were any highlights pricing? about out performance quick And And And become Walmart DIY coming market a they competitive. guess the I Could in you comments maybe more moderating. of you zone

But don't much had say specific end Pricing automotive, we've automotive, it's pricing changes supplier been the the rational, price through way the we environment. do-it-for-me to cannot third really whether much price again, the in pretty in Yes. has minimal expect rational no and year. at quarter, increases a of and DIY, of really we or X.X% we've and seen very increases

mid-single-digits those guys quarter, assuming as bit continue we decrease of gone if XX% both -- are the the to stress mountains. down talking Bret Where QX, to seeing QX. we change your our But Midwest in QX. again, Bret to markets as regionality, quarter. down QX. We've really the was job roughly in for down surprising, our saw in I'm positive And the about mid-single-digit and down QX down us, out, the and we're and question not continuing good far Much Northeast a you to the the And X U.S. heading story, business, back two Northeastern are previous do in in Atlantic, from in I go similar were be you're point high-double-digit a Mid that like strongest numbers XX in to around delivering QX.

encouraged bit markets. in a we're really just by But, stressed is improvement quarter-over-quarter. strong still what those sequential So,

be number UK might strongest France market two. sounded with Okay. like And it Europe, the

correct. is That Absolutely.

Please comes next your of Ciccarelli the Our Markets. Capital from line RBC question. with Scot question proceed with

Good Hi. morning. Scot. is for This Reed Beth on

comp. us Just about the help if recovery first, running that -- could the understand better you were the wondered X% wondering in sales if auto. July I cadence believe guys you I trends clarify or is just could of

if then any can was cadence it time, clarify. think And comps And month? trends lastly, did color be sequentially throughout could around trending. side, you at were metrics And where U.S. see in those that great. improve on each sales, I U.S. but you maybe the

Yes.

double the we’ll this think, first Beth. team questions. your I’m So, But, and one, recount response, you trying asked, I to

comp. That one around, that first the back was or was the that was not think, QX, X% total,, was I total. was comp mentioned in

that did So, answer Okay? question? that

Yes.

it quarter. was quarter, our consistent again, Okay. And the automotive it quarter consistent I similar was -- automotive business business in pretty at a the look mid-single-digit, consistent the mentioned, then, throughout we U.S. throughout was the as throughout automotive followed and our total and as pattern, --

Okay.

So, auto one? were mid to low the U.S. low-single-digit -- each down comps

Correct.

Okay, side… got then, And the on just it. Industrial one

That the Hey Beth, in month add of just would improved I September. to that.

helpful. you. it. That's Thank Got

-- much total was was that's was. September our and say, flattish. July -- was in -- did total, July number. August, and what But again, you as weren't quite it July There as

it. Got

Okay.

Industrial side, How quarters? some think should just and next about look improve. few trends continuing, the mentioned, industries negative the the you over that to we starting in trends On we segment are as as of with the guys

Yes.

history in little of seen a we've bit because industrial on Motion, before generally We the the times cyclical the industrial just indicators. So, business. lag

So the saw again, that's these in by, recent we we're improvement with throughout again seeing quarters. Beth, is sequential are What encouraged consistent we what quarter.

we'll gap close strongest QX. industrial as and showing. numbers that between the our September So, the are the was believe indicators economy of what to month improve, that we then And continues do

we strong. our is takeaway of that really anticipate lumber is segments to strong improved and of tied -- the in the which our lot coming We're good. of are our business, paper A industry, the wood building be, directly So, months. pulp results should demand seeing and out

ahead. will Motion doubt no recover have in we quarters be So, will and in the good shape

Alright. Thank so much. you

welcome. You're

proceed of from Chris comes Our the JP your next Horvers with Please line question. question with Morgan.

everybody. Thanks. Good morning,

Hey, Chris.

questions to follow wanted just I couple a of up there. on

Motion the side. on First

to you September about talked size You being energy weaker are And for positive close the exposure also the obviously strongest you to and getting the there? comps down guess, like X% up maybe industries, month, travel? then, quarter. I to could how

headwind energy Well, definitely Yes. Chris, that's a us. the comment, for

oil our our was and at in by market of look largely weakest is you certainly gas. country, that Southwest driven United the the If part States and

looking So, of there's lot the doubt. it's for that's terms going challenging. look, forward. in in a markets. definite us mean, of a no out, There's uncertainty And Chris, I headwind

Our continue Motion that is But, to our business going sequential our positive improvement. you, 'XX. in tell is turn show expectation would will also we're to I expectation

be think we improvement as from in an 'XX. QX again, did Just and certainly to we then QX will QX, QX, positive over

like was down, Motion high would decline to single-digit that mid mean single-digit in So, that high versus September more September? in like

is correct. That

that sense. Makes it DIY was got terms Is particular. months. do-it-for-me Because -- just right? better. it. Did three to also got But, that the that the on of, roughly mentioned And slowed? cadence U.S. neutral Got sort And like then, in you clarify better. of over seems in September

together? -- I that all all to did of kind reconcile was put trying So, just that

Yes.

a flattish month better just a we mentioned on and July, saw we in month. from points reference were August. did in month So dipped September We again, basis to than talking we're bit August. August. was to in saw in my, improve. a what my was September, And few in But relation to Chris, we month September. Carol softness September

missed massive sorry. a question, I not I'm second -- shift. of your And part So, I the Chris. forgot

really it in seems the like mixed DIY there the like was So, down. as slowing bag part like, second

on off into talked drop competitors, about September and DIY. your of One in a August

flat U.S., do-it-for-me what to any is comment trend this I the drove keeping questions. of how in relative close September Did then, commercial? both that So, the we sort are did is -- in positive maybe, guess, over -- the and quarter? on And

Yes.

I peer as don't the increases we're think hit our kind continue. that expects a mean DIY I DIY XX% to I bit from of we've a and were DIY hit -- the we stimulus benefited markets. huge in July group you all seeing mean, moderated our the July had Chris. anybody up close money it, in business, So, the through But, did across to and the QX. Certainly, industry to and we it of

Our did again, those as the DIFM And steady regionality, was quarter declines I we back in pretty June. that some May in the business as numbers that point were out I from with in Motion, with throughout those low-single-digit, low-single-digit the I would are improved just range. did Chris, high-single-digit down of seeing

Got -- it, but not right, okay.

do-it-for-me but was that in So, range? down consistent -- so pretty U.S. low-single-digit

Yes.

Okay.

Sorry of in to the then, maybe two-part belabor on margin that. a the side, really terms And -- question. on

actually So, gross too. first then, the you. that much how also on you hurt the on But was? margin, allowances talk helped about EIS Can vendor

about much, how expanded high level, continue are potential then, to a drive you And gross SG&A? thinking have how the the at I going on So, follow-up forward? margins to

Sure.

for improvement, quarter, margin related to say at quarter, was look the about would divestitures. gross third when quarterly the our I you On a that this of the

our product especially So, then results related on XXX mix shift global our some in really pricing bps higher like two-thirds gross improvement, sales is margin strong just shift, of of mixed sourcing our gross to initiatives. to automotive, and international margin and Industrial, operations, specifically

have ahead, quite look that with do not with sales But, lot we are We've lower we of mentioned, the continued when lower be incentives that, gross the gross been with margin margin initiatives expect have our able generally seen. we've volume lower may very as having a we by to encouraged we volumes our you to pace improvement have. initiatives with all our offset initiatives. the we So, at that done volumes. And

So, we’ve anniversaried the EIS divestiture.

just it forward, will the margin core going be So, gross improvement.

you back Got you how of COVID cost thinking are XXXX the SG&A about you dollar’s on side, take add of out guess, the expense from that potential it. lot Carol, business, how to a -- I perspective? the are a Then in

Yes.

the is cost encouraged what $XXX permanent nine that really So we're million through side, on by million -- months. the $XXX roughly SG&A savings or

that have to is, a to folks hours, permanent. million our expect improvement we which million The COVID mentioned, $XX we a things. million volumes, said in million Paul's the about savings some $XXX We mentioned lot part why to be $XXX those in, extending about directly was the improved, moderated $XX QX. But, to savings higher full million we of in $XXX as of were And government shifted million subsidies. before, for relates as things QX, $XXX were to year. of temporary we permanent in bringing of back and those That

probably is cost business -- still savings tell have than still QX. actions. have our can of COVID additional in QX. some it So, we be units are what we will in It'll less you, I all But,

and again, ahead, opportunities it office some we further productivity look we facilities and we'll have, areas. especially there some to improvements, As think further are relates back as consolidations in

about still ahead. as is we team the the look work transformation excited So, we're doing

much. very Very helpful. Thanks

Thank you, Chris.

of proceed question next Greg with comes Evercore ISI. Melich with Please Our from question. line the your

U.S. for around auto follow given the love Thanks color accounts NAPA I has questions. group, of have performance automotive. couple Hi. that on us of just the set the disparate One, a all independents, level you Thanks. and year? just now been mix up. how the care major to business fleet, I'd Could this between

that. enough, we you business, at our think modest have I big and is our have okay, we difference, have contracts government, and most our we and segment the you've been equipment. segment. that with And has know that, a Greg, and with Fleet contracts, if fleet and just outset, -- described, large around most out look gas, should look, as school So, that segment government -- oil at I ground the for been Greg, challenging I long contracts you we municipalities, airlines, our point and us, business, the should challenged energy mix in bus out and point

and come come as So, has we a that come Greg, all It'll will fleet you and government. in that will back, segment think challenging imagine, continued. it back it and that back is of strong. has can and been And

would and business, by are independent in quarter as good with saw those we Our we and can care business up And slightly think well. other business QX business growth And as that the was -- our held That by what is really well. and is that on build all our numbers. that in we Where going are classify and encouraged encouraged major account our our we we auto we to down garages. wholesale forward. unaffiliated continue

at we be like may -- half even they of the fleet if business, fair that or business, and independents look they and And XX% governments a to down be Would XX%? now just are are the estimate? business the and garages, --

Yes.

question? this the at our Greg. it got think So, and give round then, -- When XX% fleet XX%. way, you of Can -- numbers, segments, you that I'll we at look unaffiliated maybe you And to you've is those about asked -- the XX% independent owners garage is to Greg, of ask our again, XX% probably as well. that total. segment I'm And sorry, independent that

Yes. I to independents want are speaking, just generally know, doing. how just the

they doing So, owned they how to of Are back loans? doing? in what of were quarter? they I And the many to now running company PPP got versus mix fully as to and stores? you of the them they that mean, how second sort the way up what opposed are are percentage want

of with some majority, probably talking And got close terms They're are the did I Yes. and of we've money, that just week. to represent well. independents, And I'm ask roughly pleased XX% have of really And you that. to money. Independent XX%, been our would It's tell I'm in say, glad big business. -- PPP guys meeting great you been question, out, vast faring our Greg. I'm a this out they PPP owners our

our independents cash a So, fine. are doing just position, from

I Great. so And one can, more if there. then, question

help the I mentioned from that I gain heard some actions back. what or frame Could also You capital XX,XXX That vendor. effective just thought I an interesting sales some brought But was… us of you up sort share re-merchandising in And to mean and help you be to addition expanding business could direct more of way? pricing would a SKUs.

taking concept the So, total their let's of extent aisle talk that referenced, of their of -- I offering. the great as Greg Think SKUs. the about that XX,XXX whole advantage and the of endless around SKUs suppliers that and our kind catalogue

going and think has -- that well, to great We the it. we make those just really So a number a available it, example. partner Dorman -- Dorman a do certainly ours many that's all They not we course, online. know to I Greg today, now And have going years. Greg. available. supplier, But, you -- catalog catalog. too We of don't for we expansive launched we're But, that very think to it's of of put many, don't would to early an be SKUs

Another example would line. be the WeatherTech

You know that line, of course, great brand. consumer

we're So, opportunity the to whole expand endless forward. going do aisle continue And can NAPA we're of believe to that with for what kind excited business. that we going

-- were pricing actions segments. but heard some particular thought some maybe hear there also I in heard was certain And I I rational, I

Yes.

we are talking our there actions and pricing, rational Automotive in side The increases no our type business sell pricing Industrial were supplier taking sourcing and really side, So, price both about global really automotive. buy in changes much margin and drastic in strategic gotten to gross pricing the again, initiatives. our are margin Really We've just relates in gross pricing environment. retail commercial both, internal efforts. type no more it as

customer prices lowering up or how mixing you're more I based So, so that strategic, on these are, just it? understand, meaning margin to end you're merch more getting the

inflation had investments XX I with with these and initiatives quarters margin we and got and getting lower are Again, sales We've very made. no competitive. we've consecutive of we've pricing, analytics. improved And tariffs. gross remaining again, got mean, in we've data an improvement Greg, volumes gross margin environment No.

opportunities is to and pleased grow the I'm the and that And So, the in to area. really idea business. we've gotten our the grow again, results gross sales margin see the

you. lot of a luck. Thanks great. That's Good both

you. Thank

Thank you.

comes person your last proceed James. questions McClintock Our line with Matt Please the of from Raymond questions. with for

my in filling for Matt. Hey, everyone. Mitch Ingles, Thanks is for This questions. taking

on It had line like at in relatively Europe for recent been my purchasing for quick today be major Are accounts accounts lower accounts Any of questions mostly I color a So, expect already accounts Do helpful. the a these most here group back have answered. just your sounds volumes? has Automotive. these for months? solid. and Thank of follow-up the you. U.S. been trend similar recovery you these would coming trends on the types in on in

back. backed whole still morning, of driven about last that traffic back which numbers, that -- back Yes. to happy I'm bounces We to this the really behind driven a bounce One more been thing there's do in hasn't though Matt, XX%. seen I've than and wheel, roads the close expect Miles bounce it's as talked people months and we're see. sorry. business will down we to couple it even are that preliminary the lot miles

that begins to come as and and of back the commercial it will all So, business business recover. account back, the come major will

in you we in and saw QX our XXXX. European no continue to mentioned, expect account So, our with UK into doubt, and business that -- that we we in yes, well European honestly, business. quite some the strength of the And are major very we pleased our certainly business expect

the luck. of And for Great. Thanks color. best

Thank Yes. you.

to no queue. for in questions management back turn remarks. closing call are There the like further I'd to the

of Parts much forward day. results Thank like year-end very reporting of thank February. to your support in Have We'd Genuine in we Company. to great for a and your all participation look call, you our today's you for

your this Ladies Thank conclude you today's gentlemen, does participation. and teleconference. for

time. day. disconnect a And have lines You wonderful may this your at