Genuine Parts (GPC) 21 Oct 212021 Q3 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Genuine Parts Company, Third Quarter 2021 earnings conference call. This call is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Sid Jones, Senior Vice President Investor Relations. Please go ahead, sir.

morning. Good for of for XXXX you Company, Genuine us Quarter Third Earnings joining thank the today Parts And Conference Call. are Stengel, Carol today Executive Officer. President me Paul Chairman Financial our With and and Officer, Chief Will our our Yancey, and President, Executive Vice Donahue, Chief

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

Now, I will turn it over to remarks. Paul for his

third earnings conference XXXX to call. quarter Sid, you, our morning. good Thank Welcome and

which global execution reflects We are markets consistent quarter, recover. pleased as to to the this financial report our again continue strategic strong of results priorities the

operating in efforts our And near us levels report and the positioned positive prevented is efforts quality our managing long-term climate we how for growth. cost are can to are the supplier up margins customer the have service. initiatives overall results. Despite our these momentum sales increases. category inventory finally, through well allowing recovery, generating with our size business have we significant inflationary success team of which shortfalls As and and the in both strategic And offset and control reflect both global management our we pressures, GPC our partners deliver we

quarter Taken XX% a were from QX our from of total look up sales at XXXX. X.X financial and billion results, last third XX% year up

produced our quarter we and capabilities And with customer our margin ongoing We our of gross XXth further also operational consecutive productivity expansion. the execution of improved initiatives. service

year-over-year adjusted and key or a are XX% our our new diluted XX decades driving segment a X income GPC's This income improved This global a confirms was and points million by our As job XXXX for to from outstanding for or up quarterly up a billion basis $X.XX segment sales profit an from for This a just GPC automotive so also earnings, stack, a with team. quarter. comps sales increase the QX XXXX. and X% set X% record were basis, strongest QX year from a from On on the XXXX, business. automotive a record strongest XXX for XX% $X.XX initiatives increase XX% our X% net share margin comp U.S. is meaningful from two-year establishes new Net result, margin and an Total X.X represents million the X.X%. at coming in increased last and XXX and share. of was improvements. a increase represents per

reflects through our a of strongest of the sales strength average a quarter volume automotive in number sales our factors. from each geographies with The sales daily in the held cadence broad coming global September. in addition, In perspective, well up

have more U.S. the chain and through have than logistics challenges. team's disruptions work difficult continue proud to closely suppliers product manage automotive been ensure available our of our with inventory for to these substantial we're to First, in chain we our right shore up global we And backdrop for operations. of our international our issues the or customers. industrial efforts and supply amidst Supply delays

effectiveness of team we in sourcing in confident are our and We global the the industry. believe are well-positioned

initiatives key programs to and and tailwinds. market on We also emphasis innovative growth effectiveness sales. sales initiatives, positively Among continue our from growth sales our are commercial benefit our force impacting

and the for we recently their excited of examples, in for in the education parts finalized XX the for battery AAA our with an have exclusive premium have available partnership and We're that approved be new with to As exclusive resources, led an on AAA agreement We're XX,XXX equipping incremental auto more executed to students the cardholders productive, X,XXX AAA repair branded recruitment This supplier process centers. to customer-facing also team training consumers development, and million over active with will battery. over also NAPA NAPA calls. focus the space earning technician which tech all be auto a credentials. sales

European brand our to is in In and growth of driving operations. strong significant the continue sales. Asia-Pac addition, our both finally, drive BXB investments omni rollout international -channel and BXC And NAPA the digital

which fleet, that cars such benefit maintenance. the So on the the aftermarket include these and The over which need market long used will keeping road the the the A more is longer. fundamentals, improving as the the market, ongoing now robust and aging improving industry to turning continue the growing car economy, And term. for following: vehicle to generate miles-driven of repairs more macro reopening tailwinds, drivers and more

last our X%. X In total have a encouraging lockdowns see of sales stack. highlights sales are up at late, been of restrictions stronger up easing in two-year sales on year it's up by from final X% these Looking X% a to to which flat were should lead Comp demand months region, total through X% comp slowed the U.S. Canada, X next year-over-year both year on major markets as were increased and XXXX. with and automotive recovery. essentially the of sales stack

driven ride for outperformed. categories control, product demand sales brakes, as which U.S. were equipment Our and by all such tools, strong exhaust,

as pleased, sales and retail over double ticket up recovery a initiatives strength in the positive from of do drive commercial new such continue enhanced the up strong, economic with consecutive quarter, however, as By We the partners ongoing as, held from for by straight driven and include shop remain counts can our sales growth, DIFM third which ongoing our in retail the as thus was would second followed the such now grow continued by account to earlier, Sales and far that with features, growth pay These The were functionality, traffic sales the of customer later. to additional business nearly commercial our third the both U.S.. payment major the BXC for and quarter membership strength addition, our and outperforming add in DIY rapid upgrades options, Xx initiatives, quarter. and both digits. pace, In strongest AutoCare NAPA includes customers with has for improving were customers, with online, and markets in with XXXX. commercial XXXX. XXX several at sales up mid-teen low sales buy segment, the We believe surged XX% search to digital and catalog we of were investments. AutoCare well quarter. reopening BXC mentioned NAPA DIY NAPA

single-digit commercial program. government So momentum premier growth fleet, really the and segments, independent our out wholesale other garage for our Rounding posted and customers, terrific for quarter. high also

as look growth our more accounts. we in confident and customer strong commercial So are we These value. trends all priorities across cars. encouraging of ahead, results our more remain to strategy and for ultimately really key sell deliver and our parts

Comp total QX well team with XX% were in perform XX% continue stack. increased sales strong last a up up sales two-year from X-year to stack. Europe year on AAD a a X.X% Our were X%, up and on

key pleased results, the of really solid A While our results out share ongoing market in which roll-out driving European conditions gains. the emphasis reflection were of and NAPA the of of UK continued continue stand with key execution we initiatives. brand on account are sales and Benelux include X the market to These and stable development, markets. with strong our each

really X-year With both sales XXXX the a with up Comp quarter. XX% month. Now of results sales the up given and double-digit, these commercial stack. markets finally slightly downs severe the during reopening XX% Asia-Pac retail NAPA demand see we growth driven looking the and from on energized stack. both were by Auckland underway, expect up coming with sales up major in Repco from brand. year our lock to total much the at and X-year We're X% the getting pleased of up surge in on markets business, and and positive We're a and and Sydney, a is were these Melbourne, last of

the increase a average from stack. XX% strongest on from the and discuss segment strong daily quarter, and So were were this sales in last line the quarter, sales and up increase a X-year Comp year, July X% segment. billion, XX% X% Global in with now were Total while Industrial sales let's results August second XXXX. up for September. month were of a our the Through in X.X

production by of state and exceeded the for reflection climate. expectations, strengthening a Both positive to healthy quarter the sales team, which the motion momentum our correlate industrial the positive quarter's great and the PMI closely is these industrial were our This of of economy. work the industrial the and and indicators industrial overall

our that cement, of our with and segment, customers largest and gas. stood wood, positive across equipment and industry's machinery, consecutive well metals, equipment and the include each we For and The rental, quarter, as had second as lumber sales aggregate growth automotive, growth sectors steel, served. iron fabricated out oil and double-digit industries

added newly our addition, In and logistics growth. experienced industry tremendous fulfillment

the broad the industrial see, serve. our can markets current we growth in quite business you as So is across

brand, industrial leader As industrial our conveyed Motion America the be manufacturers and the Australasia. customers XX, with in solutions we we is the our on partner Tier industrial our the in We industries business DMI to North provide best strive calls space demand. serve. a and prior Dive Deep market industry September team in to the event our X provider distribution have preferred in in in

offering, market constantly potential large capabilities and we maximize our very as to broadening share in drive gains sales our market. product addition, are In a as service well fragmented our and

to our in customers. drive With grounded business mind, sales in continued and with -channel these this growth new fundamentals build-out growth key segment remained focus e-commerce our accelerate on profitable An X initiatives. omni of in

with reps new repair, drive and which in to continue solutions automation. of growth X us as products, network lastly, the XX And progress our As equipment new optimization consolidator. dynamic value-add that pleased operating markets to XX generate far, are examples, our areas sales just as improve and expansion strategy and months provides services excited a Motion.com initiatives, Strategic has a automation customers. and the these motion to in such environment to for The and competitive Enhanced pricing from further center, incremental significant and we from marketplace. ahead. thus industrial our from in the and in industry productivity. now, create conveyance, services an new and efficiencies advantage grown sales inside We're to M&A opportunities

quarter our of third XXXX the update. highlight, Another is sustainability publication report

report initiatives our of their accentuated on our We our activities increasing toward teammates and Our to and diversity, have tested in to lead over and XXXX initiatives taken really goal invite resilience We're year us by you you the the around website. We've full energy all the learn for progress world further of the of these goals. people of GPC while across GPC to also supporting operations steps to and promoting the and our our and communities. importance our reduce can emissions environmental recycling contributions find sustainability continued more opportunities past our globe. inclusion. the reducing of footprint and which about equity, proud

quarter. and several third We So not very the be in our important areas in the more of during in result industrial great and the businesses, the summary, proud pleased continued operations. And our sales we automotive strong GPC team. and with made in progress improvement could we're

Now, Will. turn I to will call Will? the over

Good you, morning, Thank Paul. everyone.

customer have teams done service, It's reiterate our a me and hard to have comments strong It's the teams acknowledge and deliver showcase an moment adjust proud quarter. this and exceptional and performance challenging environment to results. winning work, First, to always a performance. let global opportunity team Paul's job relentless the continued

digital at visibility. effectiveness, executing operating progress cadence. have We global remain a our emerging part around strategic sales of We chain, Teams well and technology. continue are the The key central focused consider of our talent, and initiatives s established of unique initiatives to on ahead our including pillars, initiatives and plan and measure teams are measurement beginning rigor XXXX the year. supply

and execute our for we execution. learn strategic As we priority year, from initiative on GPC process reflect refine the planning our upcoming

year, to one help improve GPC we team. as learn the through share best continuously common strategies In practices addition for globe around and the us

feedback, team designed similar a on upcoming XX global and met of In end recently Europe, and flow. normal leaders Executive initiatives, years. since starting We profitable year. together had time person free recently performance activities in more environment, We diverse, XXXX, AAG geographies. growth, Executive recently possible Atlanta. to to U.S. While strategic to activities first Management listened we're country, to in be challenging talent, market are performance for enjoyed in nearly review to our our meet detail our from leadership Field first person trends, see cash with Similarly, new and customer priorities. to to geographies around the pleased field the shared in GPC growth strategic of in the executive the and business camaraderie, leverage, early collaborated introduced all approximately excess priorities had the team of initiatives most deliver Automotive we the in team markets time our team and X operating opportunity share for chance motion for Despite and the field person in meet and

strong that We're support Atlanta-based our Chase also for cautiously from be NAPA teams event Our Elliott. an including our teammates, hosted appreciation in also visions, deepen digital teammates, explore able we Paul soon not visit and racing growth optimistic employee teams lockdown and core person our technology propositions excellence, NAPA these U.S. exit value relationships as a important and feedback, supply team At in ways are affirm vendors field celebrity will well-received to return customer listen emerging GPC strategic Australasia the our to and XXX excitement GPC to events, included close intact. and strategic opportunity These our in products discussions only local sales to expertise, this had long-standing and spend partnership. also and normal momentum always reinforce with also have and also to quarter. the alignment, reassuring our key attitudes, about I to tech; chain technical time critically GPC share priorities, each conversations more differentiated effectiveness, GPC our up see visible to and positive These themes. in-person November are vision. see tech, It's unique energizing our it's a of routine. and solutions, Growth, supply b but and talent, culture businesses. and always the chain across GPC customers

is we example, an exponential with visited As recently an industrial growth. who enjoying customer

recent years. this triple from technology over Our plant to discussions Motion potential. of teammates its or at customer facility embedded with on this operating is co-locate building the ordering associates customer will discussions ensure provide customer Part of real-time explored faster. next to of expertise floor motion facility easier use solutions face constant our the common resources, team our investments believe We global relative proactive strategic position We're theme supplier and supply we scale of actions, data as inventory partners, others. whom supply customer. our all and global in analytics, and daily is many chain GPC explained, in-country to to navigate challenges of approach, Company. chain, that represents discussion which a highest with headwinds important large to plans to that and We're the the the size the customer make relationship for the our the in few customer the In levels

quarter, proactively day executive teams past we've leadership partners to with top-to-top and to environment, our jointly numerous problems solved. global and progress challenging held navigate but a acting meetings the partners Over and each vendor It's are it. review our global

The an work our this recognize talent end-to-end This globe, GPC of teams. deliberate work of disciplined we're talent, of to and and the also strategies. current to in global we our employer the on ensures Around future our have competitive employee be aligned ensures well-being to recently focus capabilities continue and choice ensure right and completed initiatives. proposition, our constantly to review to take the environment. talent striving dynamic actions lead, we strategic value business an we Turning

holiday a associates, improve we vacation work the reimbursement introduce most enhance care of our code and in talent's and And move attract relaxed name incentives, to talent, processes healthcare schedules, important costs improved flexibility, burden in new example, eligibility invest faster to take recently wellness on For streamlined to reduce recruiting dress to few. programs, tuition always advantage, our policies our we'll to and people. invested

We also well against and to execute our digital continued broader technology initiatives.

of quarter, Krishna. problems at focused our Digital new Information to and the the During Naveen scale. under solve Officer, leadership exciting have made engineered progress teams building on high We're customers teams that performing technology Chief

critical resources focus optimize In most the impactful financial on addition, to we'll and activities. and human

initiatives, including will are to teams this continue teams disciplined also advance. M&A well effort. partnering and The technology resources emerging team with executing discipline. strategy. and coordinated strategy dedicate the and We're with momentum Our to a technologies Last, to related are continue execute vehicles pleased electric global our to exciting the

For added and market North distributor increase leading the of local Ireland. parts GPC This a network Europe and geography an the to Distributors, to acquisition operates. example, we which XXth in American groups country density in Automotive several automotive new we store our automotive announced represents J&S

financial a to automotive disciplined believe In adds addition, pleased to sign U.S. new a we strategic criterion. GPC prioritize The digital is This automotive acquisition acquire and active our accessories. and agreement product of based all definitive capabilities we and to category platform strategic were leading digital AutoAccessoriesGarage, we acquisition in specializing transactions U.S. team. meet for the a pipeline accelerates recently remain strategic

teams the continue and together welcome GPC teammate day the the we uncontrollable performance. customers global with service deliver pleased really to newest to to -setting thrilled to record solid we hard strong financial our family. headwind, each move to I are are over XXXX. With momentum Overall, Despite our details. We performance. review team that, will as the the now forward working call build Carol and to close We turn the into forward on to to year rally look

to and joining Will, for thanks you. everyone Thank us today.

quarter Recapping sharing are sales increase of from XX.X%, XX.X%, We with you. third our few performance GPC pleased to XX%. details were with financial basis forward and up third an last improved X.X in XX year. a to additional we Gross total margin very revenues, the quarter, look billion points

management driven to in initiatives. impact improvement pricing in resulting as anticipated, quarter, primarily cost third incentives the was positive the with margin category of gross supplier activity additional due increase and product In in suppliers strategic our Our had we improved volumes continued by the inflation.

X.X% to and positioned global inflation and was strategies and we we these team will margin increases neutral impact margin. price in in global of price Our effective on to Based inflation improve pricing gross X% address a trends, estimate protect as inflationary a we gross current with strategies industrial. fourth the sourcing total our automotive, see Company to consisting in and inflation QX sales, to appropriate. X% On on quarter, utilize additional X% to expect our basis,

expenses Our XX% including factors, at due XX% total savings The the adjusted up to from XXXX and operating prior-year the quarter, in and is of to of related year the from several X.XX were temporary billion million pandemic. third XX approximately last increase sales. and non-operating benefit

increase million costs third insurance. as Additionally, Incentive in quarter pressures year-over-year and in health expenses such sales, in on as as wages, areas compensation the reflect well our cost additional flight, rent, XXX the variable

ongoing our on operations. and to improve control execute our expenses to continue We initiatives

quarters thus our ahead. further see progress, in improvement room we far, While pleased the with for

the quarter profit was up million third segment total XX%. in XXX Our

a a Our and compared up point last year-over-year basis improvement, segment points XXXX. year, basis to X.X% profit was X.X% from margin XXX XX

team. by pleased the excellent really work and we're with continued improvement the So our

from year XXXX. in XX basis Looking full more to strongest from XX we currently margin our XX year points years. would ahead, and XX XX points or we margin segment our for XXXX the be basis This to expect raised improve to full than profit expectations margin

in on tax up Our the last mix third primarily income tax related rate an was to shift year, from for basis, rate increase the jurisdictions. XX.X% quarter to higher XX.X% with adjusted

continuing income net $X.XX. operations diluted XXX from share a Our was with per third of earnings million, quarter

million or diluted in year, a net income share which or XXX $X.XX share, a was million XX% diluted adjusted a compares adjusted per to per $X.XX prior the increase. XXX Our

So up quarter revenue total third X.X turning was our from to by year. X% automotive billion results last segment, our

margin increased million profit X% segment Our to with X.X%. solid XXX as profit

XXXX the savings, temporary point from While down over progress to and benefit of XX basis the in reflects an basis our this due improvement margin points XXXX prior-year underlying operations. represents XX

from in months up expansion by is XXXX, X the profit U.S. points XXXX XX and from and For X.X% margin primarily points basis European XX up operations. our driven basis margin

industrial million points to This billion from XX% XXXX. XXX profit margin up a XXXX up Our the strong year basis points XXXX. the XXX is up a XXXX. a Segment margin from XX% industrial this is a Year-to-date XXXX improved X.X% segment points basis for was Quarter XXX and profit from XXX and from double-digit a up XXXX were for ago and XX.X%. a of sales a and X.X margin from of first basis profit up from since points Fourth basis XXX

very executing results group recovery. well is operating and through the industrial posting this excellent So

our our payable now, increase time. So XX% XXXX. sales accounts sheet. October with in XXX million right the in place, of and XX% balance turn payment comments certain X.X%, total our at suppliers. with is due accounts Accounts the XXth, to the a year having receivable to was line the due terms commitment of the inventory to increase last reflection in down Inventory and from right increased timing in in right the receivables September parts, up of favorable sold the to primarily At let's

inventory AP year. XXX% improved last from to Our ratio XXX% to

XXXX. of times times million to to improved X.X is adjusted year. of quarter and closed debt X.X down total from from liquidity XX% December with or of XXX Our last available XXX billion and X.X billion from third September the our last We down X.X million EBITDA year, XX total debt

our do capital capital to teams structure. continue of our working So outstanding and an job our optimizing

operations months. million the third billion quarter for cash continue in in We strong cash the from and also with X flow to another X XXX generate

For year. the full

and working cash X.X growth billion. of drive earnings capital And our operations. in million to X.XX X.X to billion XXX from billion free cash expect flow to We

expenditures, for priorities businesses in M&A, key dividend. our repurchases the capital share and Our cash through remain reinvestment the

For organic months of for our in plans growth improve invested XXX expenditures, to have the and we through a operations year. additional have investments efficiencies balance the capital productivity the million and X we in drive and

In addition, cash have includes used into accelerate million strategic we our XXX groups markets, earlier. entry in approximately discussed a for investments automotive included several These growth. in the Ireland across store to acquisitions

a The dividend pipeline purchase industrial We of close in dating shares, both Auto Consistent to of Garage continue to and million generate have robust currently and we we million additional is have repurchase remain used program we active to ahead. XXX and million shares, to in every quarters Accessories and quarter. been And we a expect repurchase In strategic expect for cash years. the XX XXX program, and automotive our active would back $XXX has XX.X dividend mentioned fourth additional million share our up policy, more authorized the since XXX,XXX in part as public a share this year-to-date the we dividend bolt-on X.X through to a shares. million The which to Company used quarter, in also XXXX. buybacks purchase to consecutive This with XXXX increased third the X longstanding has year dividend of have paid as also include before, months. with paid shareholders to acquisitions than segments. going our the Company total to in we

raising So our previously of turning our our outlook we on release earnings to provided current XXXX, full-year XXXX. in XXnd are July guidance for

an previous of total expect of We range for XXXX +XX to to +XX%, our +XX%. +XX from in sales guidance to be increase the

the range share + business, $X.XX we the from to from sales +XX to earnings guidance from earnings By of excludes the a total increase +XX% to guiding to guidance industrial our which Automotive benefit On a to is and XX% As diluted an to raising usual, XX% segment, growth for sales This of per future unannounced any +XX% +XX X% this segment. +XX to of XXXX. increase an $X.XX, plus An the side, up total to increase adjusted acquisitions. +X% represents are for +XX $X.XX. to of our $X.XX previous we're increase for

look encouraged results and the our initiatives we're our quarter focused strength enter forward meet fourth Thank the to the We performance for you. year. quarter back I'll the third or by in February. reporting Paul. we turn year our nine our financial to quarter over in on fourth for the financial full the in months. So to for And And now exceed outlook on it

Carol. you, Thank

As our quarter, flow, strong and driving in global momentum our out in progress focus of strong we with we are shareholder business pleased growth, to across close another cash all work profitable our attribute operations. and our We disciplined the positive team

margin Our team expansion. in confidence plans has and growth strategic in the we put have place long-term to capture

financial strategic investments the acquisitive an flexibility Our organic balance pursue strength growth. growth opportunities and position sheet via with to strategic at plans exceptional combined GPC and with

capital also to shareholders repurchases. While and returning dividend share through the

the rock global of fundamentals we So the global ahead, the are our as to two businesses remained see pandemic impact while look encouraged solid. we subsiding. of

up challenging circumstances under great the in their interest taking stepping are you thank for GPC thank GPC. and of care we we our dedication, hard customers. each of their around our teams work. and GPC That world and passion, your their teammates Our for

questions. for that, your So back turn me operator to let the the call with

will Thank question-and-answer JP question. your you. please Our of this first [Operator Morgan, Chris session. Instructions] time, be At we state Horvers question from is a conducting

everybody. morning, Good Thanks.

morning. Good

September best a in daily obviously Motion automotive volume first talked being about the you My has very and business the average is, acceleration. question strong two-year

trend expect on the the you the given comps can in quarter fourth potential that quarter commentary, that the outcomes would fourth businesses So both in on comps? accelerate talk could on you about the and two-year

first Well, your off, thanks question. Chris, for

got when we into month September You've you third look over October. our strongest all is we quarter as progressed what And our the being stronger the month. trends saw September are of that tell hit can in quarter it carrying of with across we the businesses, you the that

feel certainly really feeling good So And that out about put there about good we're we QX. projections the where are. we for we

So now looking pretty solid. yeah, is everything right

vendor maybe can time? vendor it then, margin pricing. that of of the Motion's on those gross side, views are then into some And points much does Carol, of you. Excellent. is -- some not XX -- of parlay that that some Some vendor about sort how allowance diagnose operating was basis allowance, over you sustainable are margin your and those vendor How the allowance, expansion? allowance of of Thank perhaps

proud of really Know, in we margin, the there related want and our teams to thanks and margin. of of to a ton was I more I been done couldn't look, to procurement be team efforts gross our gross because that teams give has all work the

we but when think that, in our management especially strategy. the vendor is it and about that pricing It numbers, having year-to-date -- the allowances, with all honestly, inflationary to addition the includes to initiatives, global quite and look sourcing, but when you ongoing category category which and benefit initiatives, at was benefit our honestly the sourcing. management So of pricing global initiatives, deal impacts

honestly account our think did to in you I taking have the related was I So again, volume But and incentives. rate. inflation of everything to quite impact more quarter neutral into an think

extremely us positive outlook have in in positive ahead, we're margin then is QX. fact, look QX, to we also would a would positive basis. gross have So as in year about in our not the on be stack which for impact and contemplated our we guidance And X-year and that continue concerned a

motion And then operating margin? the on

but think will XX margin just, you to sort would operating And improvement them we again, which is for margin basis. cost their implied them, Yeah. incredible and permanently stack on leverage. they I operating the them. it give really and X BPS the outstanding, QX, Industrial both which structure, see again, for that lowered a of continued the and see in through where two-year than is The think for And operating an performance I that full XX stronger improvement just margin, have motion much year, gross expense months,

so it. quarter. great much. fourth Got Thanks a have And

Chris. Thanks,

Thank you.

of Please your question. next Jordan Our is Jefferies. from question state Bret

Hey, guys. good morning,

Morning.

Hi, Bret.

you the there are to shift or the of seeing guess, as real amongst relates smaller about are the You giving share commented up players and, gains in larger Automotive shifts in share U.S-- it space? I share sort the WDs

way say And NAPA great know, aftermarket top thanks terrific category quarters. and in that, about numbers the with is feel the back-to-back we the going some our had a Bret, the we question, take where general out it's on perform Bottom our as tell of the also I outpacing team and market. growth in level. our continue as to that out, the QX. had like here we're question, to really look QX, comment they we're shot what that seeing expect automotive same actually it's at we'll a -- as like automotive in And see Bret, of we're up I incredibly high by gaining businesses a look Bret a so at performance October, Asia-Pac at our we fragmented. also we to European team of this team gates at, can as that international quarter We I'll we initial in hard shape mentioned we're the product we month I that But first your terrific well would and where of to you forward. the to in And one have the the look the continue. we're be all line is, so like solid year.

NAPA us Europe, I could question private the there. is label of And I follow-up benefit is guess And how label looks to private my program out are the you maybe the for gaining guess, relates a margin you what in traction? feeling over give saying you team, European that rolled

is on the Bret, acceptance in the tell have much lines. to we're Carol margins. The I we're our of we with which that our weigh the those part, on so touch the acceptance And pace you maybe you -- I'll beyond accelerating out. product rolling Yeah, are so number accelerating expectation,

UK So to to out started business now really it's we've as surpassed you outperform. And we tell look continues and across into business, I And market. expectation. our really our UK other have you in the rolled our that European aftermarket the

also results. So out well rolling Zealand New and really pleased similar say and in we with Australia are as I it would

Yeah.

is from specifically standpoint, to favorable with private is capital extended margin their it the So margin terms. gross labels, for product a the said of label standpoint, neutral rate. comes the Europe many that Having working on because

So an they're in been and working turn, And the reinvesting earlier. talked additional the Paul has of capital see Will [Indiscernible] in about team to their M&A benefit and offerings able improvements that. that taking additional product such as

inventory you there? mix do private as over of being say, What your label percentage a

I be you year-on-year haven't ever a It's and yet. what starting not product of and going going really certainly like incremental out. to a we It's given that out to out slow something. haven't lines but off with the be to U.S. not in XX% mean, going improvement number a target. it's given see, We

that. expect can you think I

All little, you network. brands in the first time, sold back right, if Brent, in into go any, you, through went private XXXX, was Brent, have Europe if very when thanks. we back AAG if there

And So think targeting we is the new now right brand increase everything all categories. Carol the through we a certainly moving product but as XX%. incremental. number, we're in that as into expand ahead good that we're and We that's years could NAPA said,

Great, thank you.

welcome. You're

next Our your Greg question. ISI. from question Melich state Evercore of Please is

should one keep Thanks. margin quarter third fourth inflation. it in that X% to saw neutral sales. a need quarter the accelerate into or you My to first that doesn't What on was to The accelerate standpoint? on

X couldn't would that We international again, is margin despite teams. to with that slightly QX, Greg, and through on and and to it gross our in Yes. It's that probably our improvements. are Global higher more range. our X% automotive. be manage the tremendous to not think inflation for pleased than Then X having They say to we I incremental having Automotive able X We that doing fourth is be we're ability think a for that continue job coming in industrial. confident do quarter to X% would on said be us deliver in the and automotive X% to

any been there or in has is destruction. This mix demand shift any And accepted by customer? the

guess what of it this our top-line industrial at and point, look that you generally Well, just whether the and haven't seen automotive. at Greg. look at say business is when we it's we strong part the I is mean, would or back, our the nature non-discretionary. demand, you of I push results

and seen the in necessarily stayed inflations all back, rational pricing sectors, haven't all industries. So push has we

that seen yet. haven't really So

getting sense. Got and a model then and guys it. then paying What's added. about talked M&A nice the I terms Will, the paying finding for current more synergies have it there the things the what know, used you acquisitions? and Make and had in times you rolling EBITDA things some X And opportunities the paying of you for second some little in. just of now was environment a you've historically, strategic out strategic. right to are

good It's dynamic market. question. Greg. M&A certainly a is it. Yeah. a It for Thanks

a eight than so as the times to I financially, And Industrial the talking thinking a nine think we And deals. I Whether for etc. about or creating becomes all operationally, about think to, it's that value that. on something us, potential. alluded comment made creation value disciplined approach very it's we have strategically, Conference, our lower I about

can Greg, [Indiscernible]. that to close very acquisitions to And we at bolt-on we also and of whether at What value When like? it's into we space, Will look automotive so our valuations. are -- continue incredibly when we I as as the M&A does or look will family. said, to And GPC it we'll we here continue in Those much reasonable here our on disciplined would and be in Europe one. add rational, how be create going this business about look bring the to across forward. historic we how that's But very kind North America. think

summary. That's a great

good to So luck. and thanks, all you congrats

Thanks.

you Thank Greg.

Thank you

Stephens. Our next question is from Daniel Imbro of

my for is Andrew on taking for Daniel. This question. Thanks

bit. September the up are How in issues the demand able side on stepped any today? you industrial the nice you a surprise. It's with the to are meet business, So Have a market -- the had PMI of you risk?

our automotive terrific industrial as sector. Our Andrew We as on We're strong terrific had side that held the up -- across a supply we're has -- industrial a -- America they've as see ever not type QX. seeing team industrial are well, been. disruptions the had of North that the you automotive chain the numbers numbers business seeing

of in they QX. is increase, did the course to So they largely in led a inventory. an inventories. not which year trim They the their team that sales mention are And popped going were our held good not up to place, good back has into shape, great in XXXX industrial throughout that

good front. So all is on industrial the

Excellent.

you DIFM in to out out mentioned the buy out through, call to side rolling see do now adding DIY channel that are some later. you pay help to maybe opportunity the something Is you the that or just with affordability on repairs? an On on roll

it's great then example I'll some it's that early It's Yes, but understanding customer, these a the on that question. of solutions and the side up a with pilots we're needs. coming mostly listening with of to DIY good and is meet days the tell and you, testing, kind

relevant. most So where days, place retail but that's the is it's early probably online

That's Thanks. me. Perfect. all from

Thank you.

Our next question is Securities. from Seth question. Basham of your state Please Wedbush

morning. in September that growth was else comparison on or there function that acceleration Auto is the in business September, you And have of acceleration lot. is and a and the a that driven just might good question My Thanks October? U.S. into saw something and the

you, would it's combination Seth, Well, a that I I factors. tell think of

our think month, their the I automotive accounts year, we best our strong. strong them. and get quarter go. would to the continues across DIY U.S. It's country. -- strong best strong we all on I And under our both get that with AutoCare business don't we is legs had it better major strong. slowing. we It's comment business our and, I The continued big our October DIY looking team of side, to regions also looking mentioned looking our continues DIFM. as don't Seth, see continues partners in

board, as well. it's of that October and across well on month the we're up held the seeing really So it's trend continue

acceleration and Got just there you the new it. as AutoCare? growth, and when you more follow-up, NAPA think seen is have growing a with about And customer about existing business or an customers major it accounts

on they the as really put and marks which team high going our around more I the and which give was when them team was up And strategy year-over-year. on So sales our kind all customer. into chunk even single-digits, of at that significant sales reps business, It's I. effectiveness would high street other again, we together focused is putting all the and look end-user Seth wholesale what XXXX, on our business out both And getting of deem you a

lot driving of our a restructuring think our sales customers approach a with growing team new business but kind and also to customers, of really I well. of as combination the So existing business with

NAPA So find and ourselves. team we the very pleased where with

Thank Great hear. to you.

Thanks, Seth.

question. of please state Our is Suzuki America, of Bank your Liz next from question

Great. fitting in question. Thanks my for

the had it's much Will be can't, impacted, foreseeable you to benefits historical you global that fair with think would enhancements employee employer to to number being of benefits how growth and the a initiatives? focus mentioned in compared quantify of break explicitly future? think is do on if Or you out a of to a cost So for you elevated wages Can choice. growth be rates SG&A say these likely

seeing. we our time and more programs the we're that, and like vacation. benefit I things and Part that force. just really of significant team's couldn't being and inflation we've offset guess we lot impact things But things, some relevant that reducing the making we're that with important I and teammates that are to about inflationary is think again, the you point permanently important just it cost costs. our Having SG&A have I work structure and great of to of really wage some I more significant is healthcare having pleased to the with yet that, competitive labor on sure paid said that true don't the those a come mean, said seeing. our talked off would work they with hard though, inflation more able And is initiatives. they're be is of important more what in that just true wage just and for they comment these would are

in anything models. that need So we've there our And of incremental is that contemplated you not of full-year all in say benefit those types I of kind the programs. that a operating improvement model would for margin

So we about feel it forward. good going

the that, encouraging the in to feel for that about the just ahead indicators year, make the that you increasingly your leading optimistic of that in Then it. I'd on are some quarter. expectations and came given Got a follow-up the imagine increase there fourth quarter guidance

where most surprised curious upside have versus I'm the So your to results the estimates. prior

Yeah.

there major I surprises. weren't think any look

environment, supply the cash the We but to with due stronger flow drive chain was sales of margin in having and all automotive important. disruptions. really a highly improved The had were recovery inflationary gains gross results again, margins terrific continued to Our and quarter consecutive industrial. cost with in really the XXth and controls quarter,

quicker So having industrial that recovery volume really each the higher coming has quarter. and been

each the So good that went gotten we we've And it's as about team quarter. recoveries each better great again, QX. fundamentals of have and think a quarter, economies into but our seen really But the I effort. feel thinking and as we at been the reopening of year, look the rest

thanks very Great, much.

last question comes Research. question. Bellinger of Please state from David Our your Wolfe

in the rate on everyone. QX. benefits for this you fully basis different nice a Automotive, next your price the there To taking -- from of Hi, point? expecting similar there at at you're any to inflationary -- majority the this taking today. Thanks year? those room some are still Are Are And within points is very increases any of results question. go are pricing rolled out into point, or competitors actions that XXX

they next to being fluid that a the the sourcing more us with heightened I these closely in normal price mean more into is to certainly, very we is and more teams but a just areas inflation. for year, very look those to the lot to that chain and automotive accelerating look work when inflation be Brenda There us Again them. and and timing we We again, little go automotive I at It the as of global work and factor they're procurement environment international week-to-week market some it's at and really mean, there's a that's have of industrial, timing so keep that purchases. I mean, will in a that vendors increases. day-to-day, is supply with normal. look inflation and increases. time work can presented a price over. look, at X% right the done now. negotiation well. carries as got they normal mind, It's the X that's it's Yeah,

that will improvement. doing that great goes through job are next and We year. work have But teams have into to some again,

really potential you I then also the in to buy any elevated And widening size aimed base that the feature. announced are you of customer coming business given that frame the later way? there of acquisition in now And just ask pay at you Is expecting remains it way today, it. the want and percentage some opportunity? NAPA the Is Got peaking initiative online years? could that

parts U.S. see your parts all about Automotive done things expand we knowledge the on come goes new. in you initiative this still And we've shot online. favorable. that we done tried Later just opportunity. before. world in here give selling that a I wind more I'll to question first I excited I'm we're the exceeded a our to part this base track results we pleased early tuned put in expectations. to but very, the Australia, and acquisition Now, with at a we so broadening kind on doing tell in base as recent And a very, same Europe, pilot, Europe, -- initiative. part we're will We're certainly in Buy expertise our in parts acquired just David, that really anywhere at few stores. take about that, of in number would the that would our back. have that Garage, early years It's in really NAPA point. announced, Pay We'd It's online. of and And early really and acquired into yet. same strategies look, to for in you not sorry, certainly expect was hand-in-hand, it where else our It's it's the David, Certainly, never that. that, then would online. just I at of follow spares the international And if I stay the they I you I'm And very It's I are Accessories markets. jumping the it to second expect products tell it XXX something credit misspeak would it. team the wind very tell knowledge acquisition

Great. Thank much. you very

you. Thank

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

forward participation to updating for and We'd year-end in today's and thank quarter February, you We like to our in you fourth support. call. thank you for results look on your earnings your

This concludes today's conference.

disconnect at you and this a Thank may lines You have participation wonderful your time. for your day.