Genuine Parts (GPC) 17 Feb 222021 Q4 Earnings call transcript

Good day, and welcome to the Genuine Parts Company Fourth Quarter and Full Year Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Sid Jones, Senior Vice President of Investor Relations. ahead. go Please

our thank Executive Genuine and XXXX joining today Officer. and Paul us conference Will Executive Good our President Stengel, Company you and fourth the President; Donahue, are today Parts With Yancey, year and quarter for Chief call. Officer; our morning, Carol me for Chairman Vice and earnings Financial full Chief

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

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

months of to morning. building nine strong and further GPC Sid, you, fourth quarter of first a momentum XXXX. Welcome finished the the good fourth with team conference positive on XXXX year Thank The our earnings the call. quarter,

our both excellence. and thankful commitment enhanced strategic progress XX,XXX full priorities accelerate and the sales through We hard for improved a double-digit industry executed of our sales, to are to growth strong to resulted tailwind work and on earnings in margin we teammates year. and fundamentals, efficiencies, for proud the gross year operational key their which our and ongoing quarter With of

deliver earnings flow. Our capital working to strong cash focus helped us continued and growth on improvements also

So throughout solutions. In successfully just closed transmission, our supply the Distribution the our power January, disruptions effort acquisition pressures. inflationary teams. we power global and of fluid ongoing year global successfully Group, were challenges industrial laser-focused tremendous on and navigated early by chain, of distributor automation a They an Kaman and COVID the of

are into acquisition market-leading highly our our business We scale integrating synergistic enhance and further to Motion our strengthen this position.

in We forward a team the as we to are shareholder and GPC value premier Kaman industrial to leader welcome pleased creating solutions. significant look to

sales business our our in per sales pressures. share. from U.S. fourth to quarter posting for a earnings year-over-year achieving XXXX. We each comp from the drove the quarter results. initiatives quarter, broad for high gross Turning margin strength XX% Automotive a with international increase financial were On last businesses. increase the Group led across Total inflationary the with comp. XXXX were and adjusted and productivity These enhance to our XX% offset our consecutive XXth an all efforts quarter cost of our were in from expansion to and delivered increase $X.X teams billion billion, year XX% Global basis, comps operations XX% single-digit $X.X up a strongest sales Total of our sales

prices three with strong led In maintenance. months. are total double-digit car of demand. increases has Improving and production steady and delays more road the on driven, to cadence keeping The the repairs addition, used experienced a recovery quarter new longer, car ongoing rising cars we customer throughout generating economic sales miles sales all increased in

effective well. as proving Our strategic growth initiatives are

product global challenges availability. to manage with We delays continue logistical through to inventory and to suppliers closely work improve

store In environment we integration the in positively actions XXX,XXX inflationary SKUs of XXXX. Auto margins throughout addition contributed of our in also new were pricing latter the fourth more expand with stores most to footprint We and with the also these to network, e-catalog have added the to our XX with quarter, of Accessories the of across several In maintain our pleased sales our fourth than coming Garage. net added global half Additionally, quarter. total, the bolt-on we acquisitions.

AAA Finally, with as AAA-branded X,XXX This all cardholders launch for April, auto a repair centers. approved ahead XX we the to focus to excited will look we on new available consumers of battery battery. the be the are premium million and

strong highlights with end third products ticket sales XX% customers Likewise, from total throughout quarter the XXXX. region. traffic sales as much improved year. Canada, chassis, from Total control of sales easing In U.S. the of retail up as in the XX% with The brakes comp last from strong positive and ride exhaust, both to across demand range were up broad for up double-digits, next, a categories Looking year. were Automotive and comp at up outperforming. Canada the the growth U.S., of and with were our lockdowns sales drove sales the fourth In quarter. by were XX%, X% commercial sales such with up consecutive was all counts

Our well growth the DIY business past for strong, several trending above quarters. historical rates remains

QX our over a stores all all development, we buy In is XX,XXX across XX% team through customer DIY including growth XXX in sales sustained for so in strength Centers, shops fastest-growing customers fourth XX% and volume. XXXX our Rounding low sales have training increase was wholesale increase XXXX. the enhanced rollout well to for partners While later and initially government driven NAPA new were that XX% from our AutoCare for perform Xx currently online through NAPA by and ended surge of to in-store COVID, existing high-teen due posted X,XXX with accounts. continued the and major option. which BXC account Center over continue now, quarter, This AAG our program in driven The out services full nearly channel, from customers offers The our available year. up commercial segments. up sales of commercial growth and members pay purchases. by to merchandising, an number as the growth and demand the year, be AutoCare a and total continued our sales comp and up initiatives, online our today year to low-teens. in the and in strong continued last increase such from the of with X% Fleet, sales sales commercial sales we AfterPay, results customers other double-digit to quarter, Europe, NAPA up

the posting XX%-plus growth. Benelux our solid each with UK and seven delivered team Our results each across of markets,

continue teams all share as accelerating the expand segment market ground NAPA-branded to Our well of as our across products. account on important rollout the key

XX% our above Asia markets. pleased to provider parts up by store well, year a QX sales continue up retail total were commercial expectations. a XXXX driven reopening an and Both Repco and acquisitions our of metro NAPA are and with stack. Ireland, of for NAPA sales In both Winparts, and digital strong In XX% J&S, accessories; X% last are two-year in online based addition, we Pac the operation performing brands comp key a report up on from and the multi-store accelerated XXXX, perform with strategy, business, and sales expansion from growth of to

last months. billion sales of cadence Industrial businesses. North XX% of The group the trends by our our industrial growth were this sales up sales economy. with and growth continued from The double-digit XXXX. Total quarter our with from reflects for the quarter This is segment, was consecutive strength all this the in sales discuss Global So our Australasian industrial segment. third comps three strong American Industrial a benefits for quarter, both increase now, in $X.X comp of the ongoing improvement year, XX% and let's in double-digit driven the through consistent initiatives sales growth for

industries across growth double-digit include and machinery, delivered virtually industry serve, including team Industrial majority automotive the we and of equipment Our and steel, others. as positive and such product groups. among iron and our categories major cement, in These increases all sectors aggregate sales

drive profitable growth. execute Our Industrial continues initiatives team to several to

e-commerce of customers. build-outs is growth with and omnichannel sales driving accelerated Our new

motion.com. We are sales the inside and for by encouraged on center sales incremental our

in conveyance enhanced to a dynamic competitive repair, inflationary strategy industrial pressures. We advantage solutions us have provides capabilities us while also as environment expanded such our a pricing services automation. our equipment And areas in offset compete and value-add and helping

tremendous further team make made year, the in Our with progress again these to progress the and Motion XXXX. quarter we expect initiatives in and

offering, and we for KDG continue addition, services offerings to boost M&A look and a scale, The our through the products and fluid and presence solutions. our expand added power and boxes checking and and example, transmission great several growth automation acquisition industrial footprint. productivity opportunities strategies, In services is capabilities further strategic to and its product complementary bearings tremendous core power provide highly growth prospects. KDG's services synergies and business, value-added with and

the of global strategy progress reducing operations. the emissions remain on in and a updated talent Our Motion of XXXX, sustainability industrial our building to for equity stronger organizations the and our bringing our we team process XXXX environmental highlighting together is world-class impact and practices. expertise measuring In our inclusion, report, diversity, improvement. We these promoting positive in an impact sustainable focused build targeted business. even business of of two Today, actively and are we

as through We additional XXXX. sharing will highlights be we move

XX-year will aware, month in probably be are Carol after last May exceptional you of career. most as Finally, we announced an retiring that

for our is background and Europe the XX President FedEx Bert years be were of of CEO as EVP most contributions with strong As performance including us. served as our will by leadership countless with Bert the as spanning announce also years, XX We financial has Nappier the TNT company. a pastnine be Finance Express. recently significant a serving She were the of Express executive FedEx next greatly that missed integral strategic stepping CFO diverse growth and CFO. and Treasurer. in of all Carol's to years, and pleased past Bert to will financial

along earnings will ensure orderly team. be on all months for We with the work together him join confident and background Bert a will strong will call to our first the Carol GPC few We Bert quarter over his Carol forward the look introducing Bert months and to in are you in to make call April, of transition. as us will ahead. with addition seamless the financial and us well. extensive international great Bert's experience to an next

Will? Now Will. I'll over to turn call the

Thank you, morning, Paul. everyone. Good

pivot As amazing of reiterate GPC XXXX, in performance We're impressive an we reflect entire XXXX results. a teams I'd into customers, hard incredibly proud our for GPC team Passion thank team. and translated the and relentless and XXXX. Paul's global to work like the to for on comments approach

who thank We our want environment. challenging with closely to a strategic suppliers in partner also us

units business we entering a discussed exceeding XXXX. annual catapult of global out in XXXX to of initiative year. each and we We're wanted commitment deliver that great XXXX, delivered financial As proud our to

with focused and performance a collectively Our strong better We customer great focus we our is priorities a to on do team. execute faster, business mix. clear identified and further efficient strategic When of company, initiatives power example team. Across a the enter as XXXX global a GPC the of at and one pace. this operations. simplify strategy We team and enable integrate to more we experience move key a

part extends strategic in are of highly our leadership plans attractive, XXXX Our positions fragmented that vision markets. a

business digital, pillars. As across functional talent technologies. executing and vision, data plans are these teams effectiveness, and Each emerging and our remain chain foundational our and supply technology, culture, priorities part of multiyear including sales unit

our to to structures, Progress action As support realign examples leverage progress. a highlighted, complexity, activities, great and scale offered reduced cost, Paul we IT growth. streamline simplify indirect each centralized processes, few. In system include field facility and to sourcing reduce increased team name our XXXX positioned to numerous business offshore vendor efficiency better optimize of example, relationships shared back-office footprints, global activities

Our us approach value GPC's together. One create scale leverage to GPC and team enables

center to the continues and As continue action, we our daily act. of simplify listen, experience customer to we our understand be at

reduction Customer customer a in As an unresolved in issue in data-backed seen Voice XX% issues. revamped and to XX% resolution US feedback. Program team time tickets, Automotive to example, create our customer We've the XX% reduction reduction actionable of more

starts differentiated supply success to promoting made culture, merchandising at talent with and Our high-performing Automotive, examples progress in the diverse in leadership and the lead and Despite environment, and promotions technology A proposition recent progress America include sales few We in value the America and first field our US addition impressive XXXX. promotions leadership Industrial Europe. talent leadership North we North and chain long-term in Australia offers. attracting talent believe employee leadership and executive GPC teams. challenging of Automotive, inclusive supports

XX% of our of our represent diverse talent over represented XX% new hires As an teammates. example, XXXX our in headquarter diverse current office, Atlanta and teammates in

advantage. to committed are culture We our GPC

activities broad-based sure Examples Our actions in profitable we sales teams our marketing growth. disciplined as sourcing name and account coverage, initiatives strategic customer disciplines, make efforts approach selling Technology serve street resources profitable corporate these we to data-backed segments and strategies, digital feet sales the the achieved inside to to complement effectiveness with promotional a pricing adjust of this ensure We to our exciting strategies on excellence. We profitably enables our efficiently. XXXX deliver and wins sales initiatives and delivered few. include growth.

path technology third-party in Our site digital, delivering enhancements and initiatives and store customer integrations. intelligence, XXXX. chain delivered supply for to capabilities that tools, impact. data offer made partners competitive catalog America faster accelerated search, across initiatives. pricing product platform Automotive, customer-specific and We also and technology Examples relationship returns North In system systems, progress new we include; management

good investments support digital growth infrastructure. across foundational seamless customer channels. to enabling also and made simplify and These omnichannel are We tech all standardize a experience progress our above-average our

also initiatives. The investments. our supply We focus with productivity reinforced progress challenging made supply operational chain global on chain

investments talent, network optimization and labor inventory, productivity, supply are facility automation chain Our gaining and in traction. freight technology,

partnerships in repair strategic on as and planning talent, markets. extends North commercial suppliers needs, and strategies with bolt-ons strategic XXXX focus analytics, with We focused automotive in merchandising extend platform. year our in M&A technology teamwork. position completed the with to of Wallbox, which progress positions acquisition, local active and of market-leading few. global such emerging KDG of partnerships We and key industrial just Our EV companies the for Examples execution a Arrival emerging accelerated key name existing technology with the international announcement various also closed was leadership XXXX. U.S. the that include American

for the are underway outlook remain and As synergy and combined business the integration bullish well the Paul mentioned, on we efforts the plans.

focus. XXXX, the to same we As level have pivot we of

a Our take XXXX global remain The GPC priorities remain to to have agile continue as the we're earn momentum. look And ability our challenges. teams uncontrollable in on we and unchanged, to confident success. continue resolve strong to

the to and over you Carol? amazing all that, Before her have the of on team, I'd Carol like extended for it appreciate career GPC. I financials. detail over we over our years. turn Carol, Carol, With to I'll acknowledge done behalf GPC all to it at the to stakeholders GPC for turn

with joining quarter performance. today. thanks fourth financial Will, and us full to you Thank and everyone year for pleased We're very our

which our As results year from a our quarter, total outlined comments the primarily fourth reminder, Recapping GPC XXXX. billion morning revenues, unusual release. focus quarterly in up on this and the full sales adjusted from $X.X in excludes press continuing items XX% operations, were

up For the full XX%. were sales billion, $XX.X year,

last XX margin a the for gross was compared Our basis point XX.X%, quarter fourth the improvement to year. quarter

XX basis For versus the improved margin year, points gross year. XX.X% to last

positive driven sales the management initiatives. by of ongoing impact full year, to in and the was primarily due in category supplier incentives For strong the quarter and margin the our volumes gross improvement increase strategic

up fourth Our expenses from of and non-operating were the in at XXXX total XX% sales. XX% quarter, and billion $X.XX operating

these the the including expenses compensation. are XX% XX% expenses also and increase of variable quarter incentive reflect growth, year primarily the higher on year, the increase of at strong full sales. up billion, For in the and The in for costs our impact sales $X.XX

health of to and in our addition, freight temporary insurance. pressures included wages, base the areas experienced pandemic. as cost In we prior such inflationary year results benefits related finally, And savings

our throughout This and Our and will to we in our be further costs continue we've today savings to our year-over-year rising And to operational continuing inflationary the execute XXXX. difficult pressures managing reduce year, achieved important improve through shared expenses initiatives in to permanent the efficiencies. on cost helped offset on in strategic comparisons. XXXX as and costs

year was and Our was incentive X.X% in reflects million, was slight segment and decline prior compared profit $XXX and This our in XX% temporary increase the margin fourth up of compensation. quarter impact profit savings to primarily year-over-year expected last segment the the year. X.X%

a point reflects basis margin improvement XXXX. X.X% XXX from Our

margin For and represents from compared increase since X.X% was a X.X% profit strongest segment sales point $X.X XXXX XXX increase margin on from was profit last and up to the XX% XX% our our This full basis segment full segment XXXX. year points XX billion, year, a profit basis year, XXXX.

very the margin our we're teams. pleased the and tremendous with So in by improvement work

fourth was income. for the rate tax shift Our related with in the quarter a rate XX.X% compared XX.X% geographic XXXX, in to quarter in of the fourth decrease primarily to

the and continuing rates was year, year. reported prior share the This XX.X% increase. Fourth certain international year diluted compared adjusted compares to $X.XX per with or to the in an operations million and per or in rate was due both net from XX.X% primarily share $X.XX. a $XXX For XX% basis the tax of diluted million our to tax increase on income throughout $XXX quarter the prior in earnings year adjusted

income For net increase $X.XX the $XXX adjusted XXXX. share, income $X.XX was and XX% was share, reported per from million million full a year, or $XXX net or per

turning results Automotive to from revenue our billion, year. was last now fourth segment. XX% quarter So Total by up $X.X

increased with profit profit to $XXX X.X%. segment at million, margin XX% Our

While down represents point temporary compensation margin from XX to our underlying progress the improvement XXX strong in incentive points benefit prior basis of the over this higher year basis reflects savings, operations. and XXXX and a due XXXX

from For margin was the year, and X.X% points up XX basis XXXX profit up from points XXX basis XXXX.

XX% billion were Our the from quarter, $X.X XXXX. Industrial up in sales

basis and XXXX. $XXX ago, basis and strong profit up margin Our from XX% up XX segment year a X.X%, points million to a points XXXX XX up was profit of improved from from

points from For up for XX up XXXX. year, XXXX segment X.X%, and the basis this points basis profit is margin XXX full from

sales with of the remain XX, to primarily total and now in balance pleased we up our At the quality the due receivable our accounts were comments XX%, December So to let's receivables. sheet. increase our turn

up parts Our increase global payable our XX% inventory suppliers. increase a sales of was increased from right commitment and in extended the at time. right payment having in the with to the XX%, the terms Accounts our function the due place right inventory to and XXXX

prior in ratio AP-to-inventory Our XXX% to the year. improved from XXX%

and total KDG in We times $X.X and December X.XX% and acquisition. we our interest debt-to-EBITDA in Our raises bonds to XXXX. bond is approximately $XXX $X a with range liquidity $XXX of X.X million billion issued to new XX this consisted a maintains We for well is year, fourth In XX-year adjusted with from a rate. to debt cash quarter early of at working from our times billion, investment-grade debt growth total This from January generated improved billion available the full debt rate at in fourth to X.X which in cash This X.X debt at in billion and $X.X our billion, closed of the targeted X.XX% public within drove capital December $XXX down our year. rating. three-year our the EBITDA XX% $X.X million XXXX. times, connection forecasted in and and operations $X.X from earnings million the quarter, operations our

million. flow $XXX cash free was Our

$XXX systems For for for a automation capital equipment IT centers, range and digital including supply expenditures million and distribution at software initiatives the broad development. and year, added chain totaled our efficiencies, such projects of investments as other

growth to drive business in productivity continue our in operations improve the organic in will and We XXXX. to reinvest to our

Internet as consisted online and store provides and automotive investments across a geographies investment. acquisitions cash on us which with $XXX as to primarily We businesses, market well These return accelerate strategic of also growth. groups million invested various expanded for of high coverage our

represents acquisitions we And the approved XXXX. to of $XXX both the company since benefits and consecutive strategic Board Industrial from a in our forward a XXXX. in shareholders approximately The this annual dividend Kaman of to robust per paid increase and the acquisition. dividends a in increase paid total going representing look $X.XX continue $X.XX Distribution generate million. of a annual share XX% for XXXX, in the dividend. Earlier in Automotive segments, XXXX, additional cash year per public the share we our week, has This every We paid cash dividend bolt-on and pipeline XXth to

million an share shares. $XX active program shares. used And purchase to back we dating XXXX. X.X to the to In have million used Additionally, year, quarter, buyback we $XXX we purchase XXX,XXX million for fourth the

we As program of up to continue were to December shares, repurchase XX, this be XX.X million and to in we in active authorized XXXX.

XXXX. to turning So for our outlook

benefit plus for growth of be XX% includes total estimated to expect We and acquisitions. range including from future to growth are total plus currency X% segment, impact total Automotive XX%. include Industrial the plus XXXX a to of rates sales sales business, By before comp to to to guiding X% plus X% an foreign the XX% X% any the comp plus of for and of And and translation the in the we These sales plus the sales which headwind X% for increase plus increase. a sales FX. acquisitions segment growth X% plus X% X% of addition is which to KDG exclude

represents side, share expect our of an compared increase XX% this range diluted On XXXX. adjusted $X.XX share currently to earnings we in per diluted the to in earnings and per X% $X.XX to to earnings be the

new in throughout on And my in sales, they teammates. We financial first strong update. and our thankful teams and tremendous We're our improved that's were our the forward by work there count. cash reporting on on to every great for all as quarter focused our April. flow, the in XXXX we performance momentum businesses. driving look forward exceptional move quarter year, delivered the is year, full margins, So And

to it the the and with Bert. to next Paul. excited with to the Paul talented to next as Thank decision support love, experience transition. Bert smooth months but back well be now to few qualified and our as was over skills a right the I'm a As retire and make we're him serve capable you the over person mentioned hands work turn and my ensure right, his earlier, It I'll to is CFO. from call team in that timing was company will He CFO. earnings April a place last in difficult I

Thank you, Carol.

exceptional now industrial the for we an quarter Automotive on can priorities XXXX strategic global businesses. the year focused year, the say our behind that fourth Throughout and advancing was safely team GPC. our With us, for

With our the earnings and multiyear profit portfolio strategy, strong generated and industry backdrop margin. the growth optimization significantly and we recovery double-digit fundamentals, sales our economic of improved

many proud team. of are the strong GPC our the and accomplishments We of financial performance

strong Our supported further flow, sheet which cash our balance results drove strength.

capital $X.XX to In these investing key expenditures, allocation and Our pleased priorities we continue billion be productivity deploy capital acquisitions, strategic and through repurchases. growth for to for dividends share effectively total, enhanced were priorities in XXXX.

to our So both Automotive confident profitability we XXXX, accelerated on our acquisition growth build now momentum turning underlying are we realize benefits in as and plans and KDG. and of our operations, for the the in from Industrial

delivering We to you. and and positioned the to plans you provide each customers thank and GPC GPC. of for for forward and disciplined, teammates growth We our GPC, year are we strength allocation, of support interest financial our sharing look well value-creating your and our terrific for taking in capital care with great of and a for with progress we thank support flexibility our

So it with the turn I'll to operator your questions. back for that,

session. Instructions] from first from go Thank ahead, Securities. comes now the question you. question-and-answer Our sir. begin Scot We’ll Truist Please Ciccarelli [Operator

Hi, guys. Ciccarelli. Scot

activity? also usually in the lot seen sales variability various experienced or just guess, related states then by your question I in Industrial regional is, my a segment cadence business? of market end different have variability driven of Thanks. levels geographies, we've that across you to is openness And that, does variance -- Paul, given seen Just the sales and

were coasts Both recall have But Hey, and digit, it's Northeast, even single down in a And that, up the up I Automotive, regions, years. the thanks, off, digits. strongest. every when up I region When you double Scot, Glad was you don't go at out tell were East of region-by-region, would Scot. which call. hey, Southeast, back. first back all Scot, one What US to Coast, strong. QX in I Coast, our about double on West, East hard welcome I all that strong, through really from the of to number look Atlantic, the

So performance really really, and down. terrific up

we On team. well. in a the the really extremely Industrial double-digit pretty was, It again, month on they environment, Scot, performed And be every again, In will every proud Industrial much of see just I And delivered regionality were side, challenging either. increases I more side, couldn't our QX. region the tell increases outstanding. you, don't

Paul, different a bunch seeing nuances market when that you growth a you're And about in of there international are that might markets, any the bit assess the your then also US little be increase than used is than prices, et right now? we're cetera, international, vehicle that US what rate boost seeing whether higher the it's bit of to nationally here of little a continuing

I such dominant I -- out you would of XX% call I what our compare let's Well, out, in guess call to is the XX% would DIFM Europe. Scot, is if and US and look business Europe market, a Europe DIFM.

COVID into that the and know, pushed we DIY the during the monies So were with out segment very, to consumers. very we marketplace all really little DIY as spike all saw business. And being

Australia Automotive but we're bit would challenges So in we're -- in a seeing I Scot, you more than supply or seeing chain US Europe. also tell either

once that certainly I'm led the while But So Europe tell group Automotive that US a to Asia really way, we saw performance and look, you pleased the Pac as well. again both in be would again, really callout. strong

Excellent. lot, Thanks a guys.

Yes. Thanks, Scot.

The ahead. next question comes from go Horvers from Christopher Please JPMorgan.

of Thanks It's been congratulations, and and you all years. pleasure these a working on Carol, your with good morning retirement.

Thank you, Chris.

is follow-up first bit Scot. to a My question of a

commercial DIY the how you XXXX, are Obviously, business? the you think DIY in side. think the could up? in the you're the specifically NAPA different to business potential thinking be towards US, about in you very do relative then comp business? As think weighted geographies And your relative you Do about heavily about how the commercial

Yes.

are compared you talking and So let me geographies about US the in Asia US different Pac? the to just When or you clarify, Europe geographies, talk different Chris.

the Yes, global regions.

Yes.

carry outlook XXXX, are to going weeks to very from over we're continue markets. our year, we six all that -- trends while across solid see as into we're for would it's we're growth tell is expectation the seeing early, look our So at into XXXX. we I our those XXXX you of And

So in in targets. been markets, that all seven -- expectation that of has our range, historical the our in is our but year come five kind of somewhere to we overall, which

in a -- certainly than our question, DIY business, both be account mentioned fleet and AutoCare it around a business, Center all but your business, in year it, you Chris, is double-digit. -- bit that terrific could had our NAPA certainly strength stronger DIFM the our U.S. major and So, here DIFM, up DIFM and And we in then XXXX, our

years we're business small remind think couple of of performed training, store has DIY coming in really of the taken our the base. team expect over our some again. really business. continue And really well. that really Our spiking store hours improving our a off very strong way gone that But last well all ourselves, we long we our has But to as I actions assortments, in always our retail a terms

then, period? but come to see January as consumer. during Likewise, the through just just it a pressure stimulus business for see did DIY that And lapped that, -- Did you you down? follow-up did in the

the lot all, we not all of as confidence gives a year. at at which Not me move throughout

the the thinking did of question my I in you but questions, then, quarter? Got and was talk last my what it. in inflation here in And you're last ton a NAPA Motion about And is, XXXX? have -- how about fourth

out was similar mid-single with normal was stronger, the bit when for it the throughout than again, alluded look quarter Again, Industrial. obviously, for Global was the it of And digit When in heavier us that. look International that came digit Automotive and Happy full at Global theirs we at a we X% we giving was QX bit around what for little QX, certainly on a Automotive, the to, U.S. year. to Yeah. pretty a to year. and low-single a it little Automotive

As we from planned look and we see ahead, a certainly going carryover XXXX. QX into impact QX

And of So second will saw half be we XXXX coming into XXXX. what half. similar think it we half first then to the second moderates out

the see U.S., and XXXX bit -- bit may the and a So than what like international and again, or in stronger in our in that more X%-ish again, in our so Industrial, that's contemplating Automotive Automotive a numbers. we're more you normal something around a but U.S.

you Thank it. much. very Got

Chris. Thanks,

you. Thank

Please Our comes from Bret from Jefferies. next question go ahead. Jordan

Ethan morning. here. taking my Good Huntley for Hey. on Bret. for Thanks is This questions

Can here, industry within price of an know from a effort your of sort gain sort seeing peers taking share. market Segment, you expect there what the see surrounding I just to share standpoint? one you on Automotive to share in and comment of you're one general sort of market Just mentioned dynamics

to to we've in shift category way -- level. Sure, teams But we're prices we'll the availability But take customers. to across and a we our had to you intend care quality, And at environment this certainly, our our We SKU one very on great happy look, automotive of dramatic look great We stores aftermarket I customers. don't NAPA to our continuing the product to, down got U.S. market are on that continue deliver you customer expect way our the level outstanding other. Yeah. in historically said, tell would and and point, the in always and actions. our of good that and the Evan, dynamics, we'll compete a all in or that we honestly, have I would And just markets to service that our the people marketplace tell our focused Evan. across looking at rational really

Great. business? there how and NAPA just -- touch traction European Are here, continuing can inventory the label And strong label on that's sort how of business, to That's on lastly faring related just going? then to sort private maybe you private you then is helpful. the see

Yes. weeks rollout the tag a a couple Europe from give ago, continues just very and high-level in were would with the of over and you Maybe team we that. strong. view, NAPA team Will I I

kicked you a number As And it in know, ago. a off out of couple we may we've rolled now categories. the UK product years of

We into categories. product continue to new expand

looking at So steering oil, chassis, we're toolboxes. in launching launched brakes. oil, have We're calipers,

expand into to offering, new but continue markets. we So also the we're expanding

and now launched Germany, Netherlands, perform to So France. well. we've the gone continues beyond very, We've into UK very

don't anything add? is know, there I you So Will, would

perspective, about the access product rolling now. feel from good No. we markets in just say having all that inventory I continue would an to to we're of

future. exciting for and continued success So, outlook the

questions. taking Great. much the very Thank you for

welcome. You’re

comes Evercore ahead. from The from Please go ISI. next Melich Greg question

Hi, thanks.

little for a for help. more thanks the you going Carol So and help, ask to all I'm

Okay. Thanks.

pressure, there, or On SG&A, you guidance? et year wage new SG&A lot, other if offset comp, dollars I How leverage the initiatives as know think about at mean not, bases incentive look help I and cetera. grew this should mentioned you a we of sort your to that inflation

amount mean, The this temporary going roughly -- look, last we into got had XX points $XX on a and which our us. out strong mean, into investments I supply really, with QX normal temporary QX leverage continued to pressures, and technology that ongoing our past. the being then, similar big projects our year, inflationary million, of quarter basis incentive and in the that the and wages the was headwind headwinds. freight, I That tailwind and for a a in again, we benefit was The initiatives. better in then was in fair in chain. I savings. QX strong cost than our we meaningful meaningful certainly growth SG&A, again, on able cost on of But side, leverage knew And savings mean Yes. number. just almost And would called And the the we to we've then was compensation call increase quarter. out QX, SG&A freight have

margin and XXXX rate of less. what a some into we XXXX, with we ultimately, we hold go have the SG&A in that improvement had improvement, initiatives. lot SG&A So and and we And comments, we're takes, really our our to into bring as a and we we a bit. certainly we more implying really get off in tight a terrific on do expect initiatives having to think our labor but are margin the puts and as have even have operating up market same And in to inflationary teams started to of initiatives. better job at gross would again, to in may time, that going with, and environment was and than we highly off continue a that's a your coming look ahead year done terrific There

you tougher great And in is mentioned if care I it in then was, Paul don't I than follow-up comments, was think I a but world. summary. US guess of the my rest or chain that That's supply the Will, prepared

I why So And just is it. love think that? going persist? -- some more that you do it Like is commentary to on why

global the Yeah, the of a of just function Greg, it's largely freight. logistics

Coast, about the most area that's out the so congestion port the probably congested. that's And think on you elevated West if

and why So more of just and in that's US largely than it the we would magnitude Europe as the coming describe through of North America. affected volume the products

it's by Good encouraged handling cautiously things, is say, all we're what should be -- I seem seeing we're chain. volume demand. growth internationally driven and global underlying better. good by that about So news in to supply optimistic, The being factories

the to in world relative to As congestion is the I still being is work obviously, addressed historical moving but mentioned, And that with be direction. the of continues to the do, then the elevated slowly ports cost something at around some moving average. product right

work through that so as we'll And to well. continue

into So as look cautiously through XXXX. optimistic we

industrial the I add supply on degradation seen in the And just to hey, haven't chain would we that, side. Greg, that

good, past US what Our better have, have certainly XX Automotive pretty throughout industrial rates seen side. the fill months than remained so, or on this we've

challenge our our as got our in across look, it see shortages. fill of rates uptick Will Automotive. supplier material and largely as But to relegated we US labor major So COVID have know and our said, relates we has an And to partners, to challenges suppliers. are beginning they most

with they're that is So we And do they Company. this for all scale, to will believe get doing product anybody and Parts in size it Genuine be if can us. going our environment,

luck Good great. That’s guys.

Thanks.

Thanks, Greg.

Thank you.

Wedbush from ahead. Our next go question comes Please from Seth Securities. Basham

Good lot. Carol. your on congrats and a morning retirement, Thanks

much. very you Thank

I follow-up you just to have comment the question Paul. made, a

about competitors thinking that get price products? supply in change ease, of you the a business, can lot competitive? Do for the players supply more the the it regional as think you those US challenges auto becomes Just dynamics how aftermarket do environment smaller more think competitive chain

driver I've in been I the people primary aftermarket. in No, you've not one certainly, automotive this we this having at to -- having want been driver it incredibly nor be price aftermarket, when have think I if product, number as earlier, is delivering a putting the great And long it, you top got just I so, mentioned go never Seth. But quality look, price a it available yes, Seth. automotive on customers mean, focus aftermarket, ground. an a fast has think been going a product, fashion, automotive our on don't I time the the great it. then, the And in ever out has competitive on back price to of and

Understood.

a and in have question Thank of contribution what then from Okay. the And XXXX? EPS you. you around separate give KDG. I is follow-up in a just sales you're us Can acquisition terms sense of anticipating the

XX% we Yes. XX% sales with I KDG. of roughly conference through of X%, our our mean, guidance to on about balance billion, mean, I the December and call that talked I'll KDG, to walk of $X.X the is as X% the growth again, that. of core

you think to on to the the X% now synergies, difference of the with given the talking to in EBITDA you you're the significant here the rolling know, again, the KDG in there. the But with we're in obviously, roughly that's to margin, And those the we have of where amortizations. December to X% up implied impact going what kind the six are in X% do the account are we've only into again, what as encouraged So into year. we similar pace you process, all teams intangible early And driver operating being well and expense weeks as in really what take a synergies it's have based on of again, incremental improvement sort we interest to this $X.XX margin But by for again, do. highly numbers. again, is net and and What the all about, implied range. about gave we've going X% down got we segment to about with I've year, as and it and have next way Kaman, that earlier, roll to when you again, both operating the we've without EPS, profit improvement profit talked you

would I just that. add Seth, to Hey,

what very, days. in are We early seeing the encouraged very we're

They We've team has we're part with first as our an the our mentioned, Kaman Carol key a going next we team effort. to met excited a with they're for deliver GPC got but the is put the out in the in, great weeks. few and this years. majority of of customers, suppliers and of As place, incredible know of in six amount team six in strong. The us great key the weeks plan having we're things blocks

good much luck. very you it. Got Thank and

Thanks.

Thank you.

Seth. Thanks,

next question The comes from from Imbro Stephens. Daniel ahead. go Please

East, status, kind you about better, And and rates you morning, to weigh direct hear the guys some Thanks looks address have do Would I I this But chain that late, risks that, cons already. end and for sourcing to on your from to that related year. how one question. pros here from didn't I to through guys. to taking half of strategy do of supply supply Hey. Thanks. something more fill be or to ask the seem your wanted just hope obviously, straight on What -- peers Hopped my Good margins has back Would that chain? the expands the do rounding the getting improved guys that with strategy? your talked potential. around and suppliers. of the Far your love of the be GPC that but thoughts biggest that you of

product in flow just the drivers, hit cetera. having piece recover. increased access But about Paul et we is talent and of to to the more your terms of a buildings, behind biggest Hey, and first handle it's the talent, labor biggest the talked think risk a lot having in risk, buildings internal comments. We've Daniel, risk and will question the people I on I'll the into come as maybe my market

things making and making to making that we're staffed the perspective, on the we to all that on sure our from people end progress build handle sure all volume. up and our great around So we're improving momentum continue

a Europe, of same We I'll product in place the now go for sourcing ground better Shenzhen, sourcing part the And the world. Asia full mention direct Yes. in look, consolidate team US. for the Pac all we've we're product a the of our our just factories. with Daniel, We today, automotive on decade. purchases to China between And and businesses been around that,

and well we've there of us. for for part decade, worked extremely been So it's the a better

Great.

the and And you with do? you direct you suppliers, you value-added relationships have so reads, polisher where are the source where could still already those stores direct

That's correct.

slow I COVID strict a again, the then apologize through Obviously, some if just about and bit you not pretty And two-year stack Europe too shutdowns helpful. this did Europe, think That's had with addressed auto Perfect. to but focused, get on the side. fourth near-term the quarter.

maybe anecdotes Just of market curious outperforming closing are countries competitive or whether changes? smaller there. that in what and some you're We've they any heard as seeing reopen competitors over

So just and about XXXX? thinking curious XXXX into how market that you're

Yes.

including markets in launch our continue XXXX. Benelux we're UK strongest the product. NAPA-branded across in deliver. initial also was performers And really our to different and were point Daniel, UK. The our for countries Europe, The So seven UK

Europe, trend a got we're bullish in on of for on positive, business continue We've and seven All and on a team rest got the start bit into our of head the great a are we the they've expect very there. outlook to Europe. countries certainly that ground So XXXX.

it. color and Got Thanks luck the so much best for of

you. Thank bet. You

from Please question Bank Suzuki And we more America. Liz have time by for of one ahead. go

great Carol. you, you working to I'll on Great. me congratulations add Thanks for letting and my decade. It's with last the over been

Liz. you, Thank

it lot from done acquisitions. two and your broadly disruption competitors may have constraints support of supply recently last been as tuck-in now And of COVID. PPP some in a of market I think chain height have the the helped without the with loans during smaller inflation of that for years? then more your than the M&A So standard the more has you you some would and guys M&A attractive categorize meaningful environment Just

active. Yes, Liz, statement. The agree M&A I to think very pipeline with continues be that we would

pretty matters joining businesses choice. environment, the exciting on Automotive an of continues And in part of there's be I family of think of an Industrial kind the think times side both becoming GPC a business and is to I uncertain and and scale especially and where acquirer viewed as the the market-leading proposition.

amount XX seen continue months. over that the XX and of continue that activity we good last So expect to to we've the

destination to And NAPA the is an if dealerships tack large one is, charges exclusive you this I -- just the plus the the you relationship opportunity the on or Great. Wallbox. as well? these this accounts an going could be other little mean, the sell just PULSAR more, have is DIY for and audience with where for to I'll customer, primarily a will which partnership and is bit about is talk

does example not It's for exciting implications has opportunity extend model. a I Yes. DIY opportunity It’s a NAPA And of DIFM. kind an to it's but that both think business the real us. relationship exclusive have its for and it on good

talked about we whether service charging future, lot of and a buzz what et we're -- Wallbox. so of And other about we cetera, talked it it's also doing and But Arrival, strategic stations, the excited with creating it's is about momentum partnerships.

are pipeline pretty discussions more So, and active robust. the these is the of for

So days, early we're could looking excited to it looking but It's what forward business. do the and about it forward. for

Great. Thanks very much.

Liz. you, Thank

question-and-answer any I management our the like over for turn session. to closing This back concludes remarks. to conference would

our We in results thank your reporting you, year-end appreciate support have Company, your in April. fourth great to out earnings. Parts a you quarter and interest Thank and to look quarter Genuine of we like for day. and We'd first and our participation forward

you Thank concluded. attending today's now has conference for The presentation.

may now disconnect. You