Genuine Parts (GPC) 27 Jul 222022 Q2 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Genuine Parts Company Second Quarter 2022 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] A question-and-answer session will follow the presentation and instructions will be given at that time. At this time, I would like to turn the conference over to Sid Jones, Senior Vice President, Investor Relations. sir. ahead, go Please

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

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

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

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

Bert. Will as Welcome was his call on I'm CFO. As who with call first the here as well Sid Bert, as mentioned, to earnings

April, last The XX% consisting team second and billion, from sales and June. sales up a $X.X up Genuine earnings of quarter $X.XX, increases cadence XX%, growth had strong another Total We year. are of share Company Parts results were from throughout quarter continued pleased in of to earnings double-digit steady and May adjusted and were record per continued the GPC XXXX. report

industrial and from both like expansion the strategic their benefit and margin in GPC quarterly segments and A to overall, our include would businesses strong and talented continue and our of commitment GPC work for operating thank EPS exceptional the quarter automotive automotive strengthening earnings record balance and and excellence. GPC for cash sheet. record to to eighth industrial generation segment, XX,XXX resiliency another quarter and for We segment our We the of few of sales highlights mix our flow in operations. growth and for the further consecutive double-digit the quarterly our teammates

continue execute drive market bottom our initiatives our strategic line and in deliver despite key We to macroeconomic to share positive ongoing and results pressures. top gains momentum

disruptions, our are capture chain Our job doing and we our need business product customers an teams the of with to enabling excellent serve share. market supply navigating

are our fill and forecast investing For our network enhance optimize product in businesses to rates example, accuracy for we demand, improve footprint.

substantially offsetting to time. at Our and the proven an pricing valuable in Likewise, cost. product scale have global freight to inflation place our strategies we in work as the right size and part the advantage continue right right have rising be

effective. has strategy been M&A Our also

will performance. has hear our and you had precision a been impact As degree high of KDG of accelerated on executed with the industrial has a from meaningful Will, integration

the out In Europe. in addition, addition the our been [indiscernible], Germany, such global bolt-on of footprint automotive largest as our ongoing acquisitions, in national teams economy active rounds with have strategic which

of explore global growth targets to a M&A of continue an and We healthy part strategy. acquisition important remains our pipeline

our omnichannel enhancements accelerating technology to of as and the such initiatives, data ongoing rollout markets, BXB investing NAPA and in our from benefiting brand, catalog the well platforms. as are international both as we Additionally, further BXC

automotive and our to extend in further strategies and our the management markets. upgrade leadership to positions pricing continue category global also We product industrial

broadly, more supporting age automotive car environment from As our vehicles, and driven of we the DIFM In tailwinds. and miles inventory industrial limited to and again continues quarter, growth. aftermarket continued the business used and industrial PMI the strength production and in several showed segment. elevated the average increase driving benefiting signal representing eight are manufacture prices at are demand consecutive in Industrial, the continued automotive new in The gains operating the quarter look in of car second expansion and

and potential monitoring high closely impact the freight inflation are and We including gas its historically headwinds, wages. effective, prices, on consumer

extensive an And global was featuring on our display focused Up partners. full for business took and for a could event automotive in in first agile Las building AutoCare Napa our opportunity stay biggest execution that the will is business, The business customers, seven of when the remain we the and was for you Get in and with across the owners, Napa and global business takeaway day-to-day in brought insights, across independent time years, XX,XXX including key operations. and our the Napa team gathering trade This an U.S. Napa on energy more future is well store the of initiatives and the to last The momentum our overall. positive extraordinary excitement introduce packed we Go. suppliers week, the aftermarket hosted & new the our strategies, However, basis. feel future. on It Expo strategic store globe suppliers Vegas. We in leaders key positioned attendees, managers, campaign, our the Napa together and Napa our show and brand XXXX seminars, than NAPA enthusiasm

We in our progress Motion During also saw KDG the of in visited leadership the with firsthand our industrial business the and we time operations Midwest acquisition. spend the quarter, across momentum opportunity and had to the the customers and the team. field our

details call, carbon This our in has as well additional providing responsible sustainability mentioned driving DE&I. on last as building our look XXXX forward in we continued our in report. practices. areas to XXXX this publish progress as in commitment As formalizing corporate have reduction in been we we these year, ESG strategy, later our emission We included to progress business active our

So record of results. delivering thank teammates our for taking again, care each customers of our another we quarter of GPC great and

over to Now Will. I'll the turn call

also Thank you, for teams the customers. team partners everyone. Good as the ongoing and global supplier work like to world. serving Paul. We well to GPC appreciate hard commitment thank great our around effort morning, as their to the our results deliver I'd

quarter, the second results automotive strong and we momentum both During industrial built and our delivered solid on businesses. across

by execution driven discipline strategic were team results focused Our on initiatives. and

around priorities, initiatives our align chain, culture, effectiveness, to and emerging continue technology, and foundational including talent sales five technology. supply We

we We performance. review business will initiative highlight examples the as select

segment an increase of segment three for the quarter $XXX plus in of quarter, last were the quarter performance the to comparable sales consistent million growth X%. total all sales months period second on billion was and details Sales Turning by was $X.X basis growth the in X.X% approximately year. relatively the a versus global or for our automotive same

and operations, representing by comp to period the was segment fundamentals mid-single low double same margin from strong segment The XX digit despite was point be our in Automotive year. across basis across solid operating increase driven And execution. segment driven a million digit $XXX delivered our by mentioned, last discipline teams of global and segment was dynamic to focused operations. team profit improvement industry a Our Paul Global growth as automotive X.X%, each continues environment. the operating profit

pricing the business first management inflation impact compared and we're remains The the slightly category with mid-single-digit experience ongoing positive our cost automotive higher our quarter, second experienced of the in quarter. the to rational environment pleased During initiatives. product

of Looking second the ahead, believe current half will of XXXX. inflation we levels continue through

sales geography. and businesses automotive to an region each with comparable sales posting of product increases by automotive during the were overview U.S. turning In filters XX% Sales across double-digit our all Now grew in solid and of growth broadly fluids, breaks, X%. with approximately the the quarter. quarter, categories across U.S.,

be and with categories. to market many pleased retail, share growth to double-digit low continue expected. growth outpacing growth of positive with which as retail moderated We commercial mid-single-digit commercial customers with both to Sales our were

of Comparable and approximately U.S. second the Our continued the across also of channels commercial sales market investments were customer marketing analytics, new reflecting BXB commerce the strength stack of well to Up Others broad the in business omnichannel in name and initiatives, launched vehicles. segments. all our XX% pricing select repair new on a In during highlight officially team from program the up just Get approximately campaign, NAPA EV quarter. include growth our highlight digital an second is Canada. Canada, two-year that enhanced DC of forecasting tools service examples all during sales we and brand the U.S. inventory Canadian and a an Originally saw the NexDrive platform, reopening double-digit of Europe hybrids in solid rollout and sourcing example across and execution. quarter, up initiatives, including auto launched initiative the Go to currency representing sales Digital low few. productivity centers programs, second strength and local of traction grew automotive in based PROLink, with to technology XX% experience. enables network To customers sales of our reflective XX% a continued performed NexDrive quarter, XX% XXXX, emerging in during next-generation sales and

to program, service excited We this European product offer and market. this tools we're center centers As have NexDrive training the partner vast part Canadian over in the we bring technology. our to XXX network with of offering and currently market service to

acquisitions strategic quarter. local partners include to working in currency Asia-Pac business global XX% supply of highlights the the In to in also expansion, initiatives. by second robust in quarter value stack more by and X% in recent strategies. up on to from advance as Repco driven for help continues retail Canol rollout In The basis. sales Spain and local year. XX% Europe commercial terrific the automotive and and year [ph] despite and investments. NAPA encouraged inform the the with sales and businesses. Comparable Europe execution Initiative demand. well and continues geopolitical a region emerging last sales technology our we're focus within capture last quarter increased growth we're opportunities NAPA XX% well team and driven also council and Germany account Our second X% exceeding stack, in on were both across comprised technology propositions strategic continued the from in on performed increased and Growth strong chain up a sales are XX% delivered and environment. on quarter customer are Europe, in continued expectations respectively our Sales of complimentary Lausan two-year in the be and increased by Comparable currency our automotive dynamic a these two-year new up than

store also ongoing Our well, from expansion. performed benefiting motorcycle accessories division

of distributor lighting our In Steady four-wheel focused Australia of profitable in addition, New Asia-Pac a second [ph], product creates on high acquisition growth the a the products acquisition during direct-to-consumer The segment the differentiated dollar completed Australian leading market. Zealand. in multi-billion quarter, team drive and offering a branded

Turning Global the Industrial segment. to

customers. KDG American total our sales business. virtually new Industrial or a from disciplined impressive During all The last year. the automotive growth segment. the growth comparable consecutive sales Industrial equipment and of the our basis strong and of and at a of operating Motion marks $XXX same sales, record performance The throughout increase by with increased second XX.X%. was double-digit cement in industrial This the of million coming industry profit exclude benefit versus billion, were strong year. million XXX strength based XX.X% machinery, fifth of point major in period quarter was and American comparable is quarter, sales, cadence North The aggregate represents categories result sales which across $XXX from served driven the XX% Motion’s improvement an performance This performance. growth North was $X.X segment double-digit and strengths last and the broad consistently approximately a particular quarter with or increase product our for

accounts, Industrial shifts the saw quarter, in not pricing the through inflation highlights on the experience initiative Select strategic XXXX. target the inventory investments productivity programs, initiatives. with the the balance the the in expect digit we low-single in optimization The driven, held to strong and profitable sourcing first significant and include remains data of sales in For programs quarter. technology of industrial enhance to business and footprint with product industrial do and rational the contributing our inflation to in performance omni-channel pricing, levels capture business share second segment we environment consistent wallet any range,

as mentioned, to the a acquisition plans business. well combined Motion Paul the value KDG with suppliers, to the deliver growth on To The team and functional momentum. As systems are has integration realignment defined overlapping of commentary create customers, teams of teammates teams, added and progress, accelerated co-location support KDG accelerated and branches. recent bit programs, a to Motion onboarded the associates the integrated provide more team the successfully HR executing

with and shared vendors services banner. customers, improve In cross-functional of addition, are sell All plan. harmonize ahead partnered across to at major utilized and programs the to Motion streams strategies teams work under inventory the team product field rebranded availability, or stores

for and Motion extremely We’re pleased of one team. momentum the the the excited as opportunities integration with efforts growth

be the acknowledged which global strategy, we on as M&A in growth, strategic bolt-on advance summary, record and the execute deliver shareholder create profit sales value. challenges capture we environment resulted compliment discipline fragmented remains presented long-term that but will from share and transactions dynamic, pipeline value. As We had profitable Genuine our terrific a another we active by pursue quarter, remain in and markets them pandemic. with team continues learned for create the acquisitions our In our initiatives, to Company. to The macro Parts to and that we

We we analyze And for in and customers continued strategically to you our the initiatives that, discipline agile I’ll to team our Thank over call again quarter. that GPC Bert. turn leadership prioritize extend with indicators to exceptional global positions. with entire our as an the business invest remain

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

had Paul highlights. to quarter walk I’m second we the As pleased Will you excellent have an and shared, through key and

the were in primarily shortly. quarter, this billion which sales up in adjusted from last items detail comments or results, will I that exclude $XXX XX.X% quarterly Our non-recurring second million focused $X.X GPC year. morning our on Total cover more

reflects X.X% offset unfavorable including mid-single X.X% partially currency. an an Our increase of increase inflation sales digit by acquisitions. impact from XX.X% comparable total items in in sales, and foreign contribution were a These

and expectations. gross the point year our XX a line last with Our second to decrease margin was compared quarter basis XX%, in

in impacted was These gross to headwinds global category strategic our categories. substantially of margin offset Our the were headwinds ongoing negatively moderation anticipated second where certain and initiatives, and quarter favorable timing by of leverage continue incentives, inflation management currency, scale. in supplier the from we foreign the growing by product impact

analytics chain As our optimal impacted data management, our pricing and utilizing along technology, gross strategic teams initiatives innovative an initiatives and category are market the second with supply to to times ensure levels. our of changes positively margin our example lead AI actions demand and in forecast These in quarter.

XXXX, we expect rate managing For our to be we the the gross supplier as product full with are impact costs. relentlessly year, margin in consistent and our of price increases

were XX% Our excluding XX.X% total year. items $X.X and compared billion in XXXX operating and sales expenses, sales XX.X% of up the from non-recurring to prior non-operating at approximately of

leverage costs, shipping We charges. and across ongoing despite continue pressures to all freight expenses in inflationary our particularly

XXXX. up year environment margin teams current dynamics, over our XXX the across work from the up segment Our point have expenses proud operating focused few segment inflationary and on efficiencies the profit from $XXX past remain from driving With million and With margin and profit increase are further our operational last our basis years. teams was pandemic business. strong a the points basis was improve XX reducing segment to to performance, of last X.X%, over the very a years, ranging we done challenging three our very XX%,

our As two outlined results in earnings include second non-recurring items. release, quarter our

XXXX. assets across generated which cash of $XXX properties and gain in are Richards reinvest this monetize the relates were The that to the divested estate, portfolio. in million. extremely The quarter GPC proceeds pleased we a non-recurring resulted sold with million and capital first of real And Richards this these not to sale S.P. S.P. item in business $XXX

costs $XX charge a the of be million quarter, of KDG including our impairment to $XX the used brand longer related non-cash of result acquisition, during no incurred we legacy acquisition approximately motion of for will second million a name addition, In that KDG. as

of $XXX income per Our diluted The of share to or second discussed initiatives profitability. just $XX execution is crisp $X.XX items or XX%. in excludes deliver accelerated the income, an adjusted debt the diluted or share. indicative compares share strong prior to per I growth year, net and adjusted diluted of growth which of million $XXX the non-recurring and our $X.XX was quarter This increase per million $X.XX million

we both XX% inventory. accounts our balances up As XX, correlates June payable XX% our from at the in total in XX% increased receivable line to in turn and increase increase with to up sheet were balance the inventory which with accounts Likewise, sales. XXXX,

cash months with million from continue last for the operations We flows to in in second cash the $XXX six XX% strong quarter generate $XXX up year. and from million

be adjusted to available cash to to below highlights free in X.X quarter liquidity at priorities and our flow to second This full billion is the expect EBITDA range for X.X of in billion to the unchanged. is to For cash flexibility. range our with and close remain GPC targeted the $X.X we billion from our We operations and continue year, $X.X slightly with capital allocation billion key times. $X.X $X.X X $X The debt of financial strength billion. times,

As capital dividends M&A, our capital in expenditures a through the and business return and repurchases. reinvestment to these through included our shareholders reminder, share and of

investments During the to of additional $XX million plan have through throughout strategic second XXXX, the technology drive automate expenditures, business. investments and and and and projects consolidate $XXX continue distribution networks for further including million in are invested capital in to quarter primarily the we the year. our in These balance productivity

in billion acquisitions dividends and the dividends million XXX,XXX to cash This XXXX repurchases. invested to in $XXX during million returned we of shares. and million $XXX shareholders CapEx, includes cash paid share $X.X Beyond and in for form also have shareholders $XXX our repurchase to

As increased XX for annual a we dividend the years. have consecutive reminder,

XXXX. for outlook current our to Turning

earnings our first previously We year in provided quarter full guidance updating our release. are

a share adjusted $X.XX $X.XX represents from up to of raising and earnings of to range from an per XX% are diluted to XX% previous increase to $X.XX. of our $X.XX, guidance which XXXX We

incremental of guidance relative approximately to the revised due we provided outlook an Our headwind includes $X.XX April. EPS in foreign currency to

total an sales reflects X% consistent for new be XX% increase from range previous the guiding to X% X% following: previously. business to Automotive X% sales total XXXX to are to we XX% an growth in comp increase of expect growth previously. the to our with from a estimate. We XX%, to sales for segment, By outlook The X% X% XX% growth segment, to

which For the from X% to our outlook sales our and XX% is business increase XXXX X% a increase, solid global up new outlook from total comp an by outlook previously. to X% Industrial segment, XX%. exceptional of previous includes along the our are of results. had we acquisition boosted sales XX% We’ve XX% first to success of updating an to automotive to The KDG industrial of our with half XX%

strategies, Our outlook our external businesses and reflects for a confidence despite the full ongoing in to dynamic execute our year on uncertain landscape. our

Our October. you. Instructions] Thank our Chris with in in And also our our for call continued generation our will third comes operator to Thank shareholders through Today’s we quarter question us Please to cash and [Operator on full in dividend. continue JPMorgan. you. forward progress provides it questions. strong the go Horvers We to now cash ahead. reporting at to flow flexibility invest first the business look to your from turn return back

everybody. morning, Good Thanks.

talked of business. your peers that late start note U.S. DIY of was so top spring a impacting questions up, focusing NAPA So about of some the quarter. first perspective, Interesting a on your from few to sort line a the the business

was and what talking as date, the that that U.S. a how can the about you about give have And other moreover, the to said in us think earlier low sense seeing week, cadence consumer are Walmart that then this on end companies pre-announced you well. some consistent pressures if you during So comp quarter? customer quarter as

the you’re if seeing in curious side the U.S.? DIY variation just in So any the of business

Yes. Will here. Chris, It’s good morning.

crack if and add. can you anything have take me to Let in Bert a Paul jump and

through on do generally do the for basis. alluded quarter moderation would So we’re data. in it me, not the side, consistent a say, to do softness expected yourself based what our it on combine, year-over-year I you a customer I comparables. say on quarter the U.S. in we did as that we’re reading yourself speaking as seeing see some on we would automotive through it based monthly into the

of terms And have that so we are consumer. the same through sure that traditional help in your I’m the of retailers not some reading of takeaway the perhaps

quarter to I would continues QX. U.S. July Chris, what seeing add would asked – are we that in shape. very we’re The And to in similar onto you kind that, of please in saw I current just good report be the trends about Automotive

all positive So front. U.S. is on Automotive the

moderation that from just little So was bit, the to a year? just anniversary in DIY really stimulus of click double last on April

We agree.

on in Motion well. incredibly And the separately doing then Motion business, is

One distribution peers signs the progress quarter. some current they as your and other talked of in of quarter into saw moderation about business parts industrial the

if any had curious, comments as you well. So on that side

that and similarly to Chris, as July, out continued seeing early saw of consistent time strength margin had broad of mood saw the end our broad product strength talking commentary remarks. we all alluded field prepared strength is coming saw we lot quarter. through as all cautious, the We Paul I as the markets. we’re of quite quarter, with and customers, in would And our a strength positive. spend Yes, kind across say the well on our in we looks across And but categories. the very around of We of

good about we’re seeing what and it business. feel the watching but we cautiously in obviously optimistic, We’re

the And prices Europe? in one about, sort on, of played what’s business How’s lot with the and energy going follow out quick in that that region? up last years holding of a questions over obviously war on as

Chris. Yes, I’ll take that

solid. had of rock be nice increase be saw more quarter. Germany. And European to another really I really continues sales markets. it not our across team. in our We We of good proud all saw could business European Our we

mid-single-digits. posting business Netherlands in Our our strong, is pleased really France, to business see

So good all there. is

so not impact. know, you Russia As and Ukraine, that in necessarily feeling not or we’re

we’re a closely. issue, obviously energy it the of press Chris, mentioned getting which lot watching is You

not are business. dependent energy an We

as So they continue operate stores have. to will our always DCs, our

So, some we’re economic but team, say little we’re really quarter that we’re it potential watching strong carryover the by challenges, into QX certainly, over for strength to please a and concerned well. concerned, as we’re seeing again, our

of Best much. very Thanks luck.

Chris. you, Thank Yes.

And from Michael next ladies ISI. our gentlemen, and Montani ahead. with comes question go Evercore Please

for the question. taking Thanks morning. good Hey,

ask, which I an a could for the to then about wanted hit sales moderation. to XX year, seems guidance, if bps for slow full XXX down the XXX automotive, point to Just percentage bps example, midpoint plus imply of And the to for industrial.

Just wanted to of more if your should see discussed something, of we you’re how about of in you’ve the if that’s there’s seeing, that think kind that that some conservatism, for particular initiatives? in light traction

contemplated guidance, impact how We that sales economic in Paul just that second can’t first we have the but comments, raised some to in were fact a the question. far Hey try work Certainly provided underlying the balance of I’ll conditions I prepared the half. and business we outperformance half. the the Mike. in its so in against one, my to Thanks exceeded to our teams there’s like number very Look see obviously balanced, give color be could from potentially resilient the to first, that factors that Will The first you take needed the tremendous the tightening the business the continues for about. and that there. talked thank our that Good momentum businesses ignore morning. the for just first numbers I’d Bert. half, on guidance in we I’ll in half. and expectations that And into

a strength things with we've exiting these So, see geopolitical balance trying the prudent QX eyes about what chain of we’re about first And to we already landscape, our out half wide supply while the lingering inflation conditions, there. momentum and the of open again, being talked COVID few constraints. and ongoing

significant for look, back we really some half a a that. of for And our half. on second on had repeat ago, When quite normalization of the half growth rates views was are outperformance in just in original assume that the plan and our unchanged guide you expect of the second look level at the the year can't sales we outperformance. year-for-year year So

at that second So bit, in a look rate half. little a growth we the moderated normalized

I stay the disciplined gains. prepared we're look pretty April to mentioned to we improve And incremental that costs we in on in my margin we're margin look, in full end about at As look the a have for But the the to half, stay at guide $X.XX have as expansion that's going of good FX going additional our and year. efficiency for some we are growth focused, look operating that. for outcome. comments, But headwinds opportunities second and think day, operating do

increases interest Got it. could one And about you incentive guys inorganic in secondly would why strong to growth up Thank light you. interest then just then supplier some pressure kind think there? of have some expense had but side, the cost organic the incremental follow on how in think on housekeeping the might just if on I of the bit question and of gross going then given move rates? And up margins, benefits there

times in I structure. of we're positive at We're two capital – really guess take I Look, X.X that's a both X.X our to our spot on I'll times. levered of range I'll take Yeah, think, those. below

investment really in pressure rating. us securitization a consequence AR nearly seen operating a and weighted not of very, lot you a some when We to with it's have look we average bit in it's we've grade don't X.X%. of see of anything our our a very only at there. program, But place call But is against expenses. source fixed of rate got there. little debt episodic intra-month. The We've very XXX% our that, at revolver usually for still out borrowing interest volatility attractive strong I capital And look structure,

quarter. the back was moderated moderation your that In XX% look that, own here factors mentioned absolutely bit expectations. on that's about When from landed the talk three from that had you're you you been prior in driven inflation. see execution some as for supplier remarks. all got of, rebates and from that has that underlying and look We our the in mentioned around quarter The with gross suppliers. has tremendous to chain expected and margin teams, a this those in year some I'll my year category our our foreign impacted improvement currency big received challenges terms of aware ago heightened shortly, in as we at management significant masking line question hard margin, a those rebates supply prepared intimately core and which Unfortunately, the amounts we activities we I supplier pricing at to in

And so to we've a the availability land we point that, this business. those if that you The as from XX margin we I'll to our that is point in consistent year that's year a just to full side customers, a the have for of margin again, abated a had the anticipated that's inventory great ago very be able outcome better got XXXX. environment. and think we we level get expect moderated. And flip dynamic part to recall, with, more bit, so about a of drive and gross that's to through great expansion basis be to with

Thank you. And luck. good

Thank you, Mike.

Suzuki next ahead. at question Liz comes And Please go America. today Bank our from of

thank Great, you.

we pricing ultimately other which of and do actions pricing hold to in it think on keep direction? has you topic. find Just a the in, you do think that in ourselves more if What challenging is you could inflation look taken to changed might when get As the sticky? or the inflation competitive Sure. margins on kind like can deflationary you've such price environment moves environment,

how for everyone mitigate a bit. from retires, having for out I'll price question. there focus doubt, and teams have pointed has one a impact. great you Look, good managing very a no Hey, and Look, hope Thanks our it that are pass increases intense along the doing? persisted everyone doing you of Liz, tough a summer. environment able take the dynamic inflationary to to and Bert it's it’s you the generally been I as out job

rate, Our margin gross has so that's to our protect strategy there been focus.

marketplace. Obviously the pricing. an to pull wouldn't the some that work look you cost immediate bottom in environment in environment would big we in we see back line that, the and pricing time competitive through see the work time that the take We'll a If expect to front quite environment. at terms supply stay changes pullback think see the we the but But some of take watch general or on is, and again, on to pull obviously I pricing through, downside wouldn't back chain. wouldn't of

SKU how for segments? of Great. growth the year, your your that each Thank you look And to just for think you. – you comp to year, as be in next you will and do into attributable the Do SKU out inflation inflation or moderate? much expect of

uptick if mid-single slight rest line within guide. his say the then the the Will in And that quarter. the levels on I the as single mentioned your business start are saw the half the globally, on year. remarks digits top just the of top contemplated a where digits back the with we the our really, of rest the all line. in see That’s we it think back then the and low-single question half for for the see for year, look in at first And of what year. for auto That’s I’ll stay the of top they how motion of high for from the industrial GPC it impact That’s business. inflation digits up consolidated, kind on expect we you on line we from to we here

Thank Great. you.

course. Of

gentlemen, and Ciccarelli ahead. Truist ladies our next And Please from with today go Scot comes Securities. question

Ciccarelli. Scot guys. morning, Good

So inflation the concept just clarification U.S. specifically that in a on same-SKU

gains there basically that another or we fairly is we rising lever have there be of? the cognizant from or are seeing coming flat comp in are to units prices steady with So

business Hey Scot. I couched think, how is Thanks is the see characterize for it I’m of how it roll It’s the flattish here. environment performing. Bert. way a question. the these, to yes, I’ll there. best terms taking U.S. auto to the in We’d you’ve keep on

that your a And worse six, they those we or is the Because and what call you European you countries kind experience markets? in U.S. vehicles. Do been the drive prices, than Europe what it regarding in months? guys it. then What spike have of your next once in become there’s for lot it the to consistent pivot challenge pretty geography? nine in when gas is tend of say less the a view we and wear are operating Got what lot differently they is need could a and any history see have tear less again, act has we in less, energy people our to maintenance, U.S. little know on because a an centric the often business

environment incredibly automotive look, If in in And This to it’s see the Scot. look, five is our recession, the steady in take we’ve in now is is consistent years is be a the market with seen we are that predicting, resilient. but see the what U.S. The Hey, we as many seen. it I’ll which that. very aftermarket in remains Europe – Paul. there U.S.,

positive business We continue direction. expect to move our a to in

with and our So which quarter. to excludes Germany Spain our performance and footprint heard team, strong. quarter we you the expanded very with in footprint with Scot, certainly as date, very, Eastern which in our this expanded with into Europe quarter past our we’re pleased footprint And first very has our our performance, been

a So we’re the outlook year. a team the with great positive for in with of and place a balance good

Great. Thanks lot a guys.

You bet.

comes next our And today go Jefferies. Please question Jordan from with ahead. Bret

morning guys. good Hey,

Bret. Hey,

Bret, Hey,

where or could sort target improvement constraints, about versus we you but chain first of maybe you lot you improving. talk half of obviously on But are think supply a ago, year you where are normal Could I of talk and fill rates of mentioned supply there XXXX, levels? sort are about, a

that Yes. I’ll It’s here. Will take one.

as developments, stable experiencing But in XXX Coast. what which congested positive moderating think thought relative space, through obtaining supply in the I West suppliers We’ve a problems, on Lockdowns over I on rate. moderation in worked ocean chain would average our year a And and are particular these to we how improved Asia, to we’ve which is the freight global saw we’ve more than continue East slightly aren’t be the that us execute. vessel over we I actually seen the for improved early the in through last to as ports now Coast So is development. days. development. a positive characterize would the say

some poor of rebalanced our supplier and So activity. our we've geographies some nice rebalanced traction of We've we're there. gaining some

port would net-net were thing freight the whether from were one we're call logistics, we out that ago. relative days where I talking to slightly the is but improved or is that still challenged, destination XXX to final rail So transport

dispersion auto? I Okay, cadence Did the from there great. real And the about interesting think you standpoint. quarter the you Is talked any anything in U.S. of say sales regionally?

the sell fuel We make Southeast half on the the showed could down average, nice region of to quarter. through Eastern States. the elevated the coast Atlantic much there's strength national that so our impacted given that One the relative the prices Northeast, United nice the in but case strengths west more

a option? particularly consumer And down any the of is around great. Okay, consumer the but stable price about the lower end for you sign guess final, I of where kind looking lower demand, they're point mix-shift talked any trade there

consumers down – customers Bret, that seeing evidence we're just not of at take trading I'll one Hey, not much all. Bert. down, we're and trading it's look

fuel particularly other in shortage well. of this been the use rising car at of with as large car you customer's despite the to and higher prices environment, resilient cars the auto prices it's look a degree; think pressures. a new I your non-discretionary and fixed you pretty business, When inflationary need

availability So sweet momentum side product The you available. seeing there. service, on Same spot is continues and we've and results. as back saw customers which readily not we're our our pull on got in the QX a focusing are industrial

chain, management product supply to on place. right and as right really we And having focus so the continue just Will in the inventory talked about

you. Thank Great.

Thank you.

question Imbro Stephens with ahead. today comes Daniel from And Please go next Inc. our

COVID? the not year those you share you're in most number and gains as feeling wanted Hey, some then circle yet. to pricing back of a initiatives that of you aren't impact? discernible expect look Can of first through out feeling talk prepared you in auto the remarks good the kind still peers on guys what to you about sounds like topical true, get guys with using just you I it's impact price, side. I backdrop. morning investing been which it back big to next price. you the gains or leaning Obviously if the are recouping drive you aren't your is any during into some guys really of guys, of on not share thanks. talk And of really Will, to underperformance guess It

Yes. Daniel, questions. break let your if can't me I see down

pricing we're the any by of impact an react pricing we're market And pricing to the that would tell we've the as market lot seeing and doing impact we proud rational. competitive not been as talked team it super to strategies are work was, our you continues the competitors in there. here I piece to around anything strategic be own announced agile First seeing and a about be to relates from And that's from market?

your to improving term easier our The And question is the our that's into those your as all into effectiveness nice near all us specific, customer technology is driving gains pricing talk turning turning of around initiative and think making was of and with. momentum force part sales and are work And second the is investments business which The recently? about, nice initiatives was while part of share of we our around U.S. momentum. stack I obviously I all question relevant experience look globe. of do auto work

We all strength. nice to very have flavors I broad-based global same think contributing and those initiatives of which versions of is

through all second follow-up true piece; industrial is markets. Yes, half across then continuing It on contracted. quarter still is guys you business end about about maybe helpful. Paul, talked And of the your the that's that momentum

you just So concerns any And those end see or you half you guys among particular any this markets are of into different weakness seeing of within year. there? then signs have visibility the good and quarter-to-date, end markets back

accelerate as are could see that and you about were say Daniel. into certainly business to is to our go signs we in And pleased under business the slowdown contract of few a seeing No. out is our segments. second any And half. half call continuing we we correct, of are not It

So incredibly this performing is call. yes, as you've heard industrial well throughout

Got there. leave it it. luck. I'll of Best

you. Thank

Daniel. Thanks

today's go Securities. Wedbush question And Basham Please comes Seth Instructions] with final from [Operator ahead.

outlook lot business. first My and guys. especially is around NAPA the for, the just a U.S. morning Thanks good question

see about thinking on Just expect business? declining a still Do comparable leading the of elevated. moderation very of miles in on U.S. business as and store driven your the some basis key back as the units for prices indicators are the we perhaps your you half pressure year, trends and the gas in

take I'll as little that I environment perspective we auto a business. as Bert. our its that, in said to U.S. But dynamic think maybe Seth little guidance Hey, it assumes well perform, to continue Paul as will there. look, a have to the add a well. will out have can It's

You see over gas prices last weeks. dropping several the and

of a that's terms in positive miles So driven.

up continue very closely; to data X% a were that little We in recent May. look we've miles driven Most at over seen.

so And robust for remain very I the fundamentals think underlying market. that

up car fifth the got average consecutive of You for a the age year.

rates. scrap all got You've low time,

demand pent-up have You for travel.

in across people the terms take wanting of think, U.S. get to I out vacations. and

And And underlying to well. so guide is for fundamental reflects I to the our continue there that. perform marketplace the think

coming Seth. to down that and gasoline It's down. been mentioned it's coming is on quickly. its down add just Bert would I

friends which that at gasoline their I in I a morning, AAA this were road travelers of heard week. gallon over timeframe. consumer. in is seeing We XX% the vehicles. an our travelers past the what July XX% we're Xth over $X.XX was resilient well $X from weekend, the And think, in of heard on incredibly

So the aftermarket resilient. automotive as incredibly always is

our consumers think resilient. I are pretty

about business in NAPA the feeling, we're So second good our half.

question investments. And price then competitor’s big environment Thanks. on the it. up some follow competitive a and of a Got

at You're for WDs, change do not but all? improves competitive seeing you expect environment as that the situation major any the supply impact,

I think don't do we Seth.

that out The of positive store owners, auto look The XX,XXX auto independent our are centers we but centers. NAPA seen NAPA Seth, week. in care have our from positive NAPA remains accounts. be momentum momentum to it and firsthand seeing our I hear saw improvements care that We coming think we conference. had owners I teams major our the our we're It business, last of

good I a And in Our guys half expect the the second are of in place. that year. continue to

is this scale Seth, add, really I I would where market just, I also a would matters. think

talked we've I about think that before.

product relationships scale market, as a your into the so I make And difference. and global your think comes

us forward. So nice like we for a move we feel as that, tailwind that's

to you Thank very much. hear. Good

you. Okay, thank

ladies gentlemen I’m And turn no call management the back and remarks. over further questions. showing final like to the team to I'd any for

are to to, doing all closed Roco of more really our And I’ve there. great participating Thanks we [ph]. with as our balance proud our questions. thanks results out QX teams just to positioned in is look, And GPC look of ahead analyst the growth well QX. couldn't we And Yes, for continue participating. to and turned support for your work. of be continue to the the financial Thanks with believe strength XXXX, we plan. We

in Thanks. summer, we'll listen, your see GPC. interest and in you October. again So for your thanks Enjoy

everyone. Thanks

this gentlemen and today's conference call. ladies you, thank concludes And

You disconnect may have a day. now wonderful lines and your