Genuine Parts (GPC) 19 Oct 232023 Q3 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Genuine Parts Company Third Quarter 2023 Earnings earnings conference call. Today's call is being recorded.

At this time, I would like to turn the conference over to Tim Walsh, Senior Director of Investor Relations. Please go ahead, sir.

morning, good and you, everyone. Thank Parts Welcome Call. Quarter Earnings Third to Genuine XXXX Company's

Joining Paul Operating today Chief call and us the on Officer. are Napier, Vice Will President Chief Financial Burton Executive Stengel, Donahue, and and Chief Officer; Executive President Officer; and Chairman

this release, website. addition found slide be A presentation Company to In the Genuine Investors Parts supplemental can on page morning's press of the

contact questions. be non-GAAP financial principles. measures, our to provided remarks, the in discussion which Relations include reported your is accepted measures call If may of for as our accounting we're prepared under the these open to generally may unable referred results earnings today's our release. be of Following reconciliation questions, A during Please be please press Investor department. call advised get to will this certain

Today's involve call me forward-looking Litigation company's to important company's during its release. from differ the businesses Private to the latest company Act press including materially defined regarding actual of and statements morning's no Securities this assumes that, several in company XXXX. due over The The to the any the described could With Reform let call. may forward-looking as forward-looking results statements also call statements update in this Paul. SEC made filings, factors turn any obligation

performance open call highlights into details businesses. then questions. overall get And to we call. our the earnings Thank on start cover you, with industrial Tim, and before the the financial quarter our few to I'd over Bert like to remarks conference to our the good of your XXXX morning. Welcome turning morning a and automotive Will third to of it will before this performance

segment increase the teammates an our in and were quarter sales from was quarter, our were I year, per this margin last adjusted increase year. as third give of to delivered XX.X%, globe diluted XX.X% of to take company the Total total from to increase earnings an same opportunity EPS GPC share $X.XX want earnings the year. around recap compared quarter consecutive and double-digit out of XX growth. a point to share diluted To XXth we basis last last call X.X% billion, $X.X GPC per a

Our strong increasing third quarter results the operating automotive discipline of industrial environments from our segments. remained aftermarket reflect rational favorable, challenging and our end line despite our environment. and to in and fundamentals costs. financing aging high automotive improve and vehicle to complex solid the pricing Overall, both a in continue operating and miles In underlying profits the global prices including we our driven top ability margins fundamentals markets, industry more benefit and business, both and vehicle fleet

and portfolio customers end Global highly benefit with Industrial and by from growth onshoring a we our diversified of driven Within markets reshoring manufacturing trends. with overall opportunities business, and

industrial our team mostly in the in segment of the the basis up the customers break are focused and expansion. Sales deliver quarter, industrial third nondiscretionary And on solutions our remain and automotive right as a to Our businesses place right we nature. result, support have in offering part that fix continues at margin segments. slightly business both the XXX points business conversion across profit time right by evidenced exceptional were as to in and

into with offerings its highly provider with time, to its positive, product first business the an During relative solutions industrial a Motion the compelling proposition. value of serves diverse continued moderate transformed were as in many quarter, nature. being demand technical has trends to end Over half Motion but markets expected.

on expand automation, such offering conveyance is our executing fluid remaining In gross addition, focused Motion power, further as of The initiatives value-added segment acquisition and disciplined with repair. on to strategic margin scale expansion. enhanced added driving industry-leading the and has team cost, on margin Motion of services, while KDG, its

Turning now our global to automotive business.

continue double-digit and New growth eighth of consecutive to automotive quarter in international with our Australia the Europe results and strong record in Zealand. across sales sales businesses see We and profits

our bolt-on focus in acquisition to addition organic continue key our to on strategy. initiatives teams Our

During stores of regions in market-leading Gaudi, fifth independent position. acquisition platform we on one across building acquisition the car players a of quarter, further the the of the with largest creates scale in Catalonia our announced Iberia mainly national Gaudi largest Europe's to and the our XXXX Lasan, addition of and XX park, Spain, Madrid operates and

acquisition expect post business synergies. this team We GPC. the accretive European to our We to to welcome be Goudy

U.S. business expectations below pleased X.X%. internationally, sales the were growth automotive with our down performance with was we the While

some Let anticipated thoughts record me have few ago, a the at is the doubt performance auto. take benefited a challenges a levels seen no in as the the we've seen from inflation year and moment on XXXX, of execution. faded to XXXX own across which U.S. industry our throughout There share challenges

to of the important We full revenue. throughout many in automotive the all aftermarket on our as automotive demonstrated dependent consistent XXXX. inventory, know, the of aftermarket year-to-date highly for we operated not customer, particularly Further, approximately cycles. which success represents our you Our potential of -- is that availability has results economic IFM in demonstrated performance automotive have XX%

over customers year's earlier to to we And more discuss and carbon to measures passing planet. highlights plans in At in for at to report we sustainable equitable report, future of our for emissions taken encourage call information execution are proud our the to the to further we detail. commercial to sustainability U.S. This confident on Bro, we actions the embrace to need sustainability on X our leadership and carbon emissions to close progress. Will report visit our build that over team month. measurement are progress the actions footprint. with responsibility highlight you and our Randy made This taking by before we XXXX, the the they XX%.We measure improved ensure X the we more are our Scope website we've we the our better greater activities XXXX reduced Scope our reduce to As a and out our we'd where of Automotive Under improve like and be. XXXX, these service has GPC, customers. are have Will, year, our company page published this which

the and business The our a alive profitable to our the and continue third right well enjoyed GPC again, culture couldn't more closing, areas they portfolio. benefit brands with performance operations. unique the in energized. the long-term our growth, and global investing and Europe I be drive Australia. trip of the teams So our is in strong all visit global demonstrates in to including to and quarter, and across We of global differentiated teams, are Will recent

each and Day years committed GPC back work to March. both Further, around and are We investments we serving the the our We our our to dedication thank at of financial remain to critical highlighted our for these our we investments to success that in come. now strategic teammates their hard long-term and contributing world. initiatives believe are customers to for want performance XX,XXX and continued to Investor

turn So with I'll the over to call Will. that,

X appreciate to GPC numerous see with keep the teams and and do commitment moment also want end, to everyone. to serving GPC on chain to customers. the technology, complemented every foundational a world . We culture, Good as help parts disciplined team We deliver like take work Paul. moving. a coordinated the teams effectiveness, hard global solutions together world. the the focus deliver the thanking success. and in-flight on by that M&A morning, this to technology to our sales priorities, strategy. for global customer ongoing I'd specifically for work around supply day team our great progress including that emerging you, talent to the I their start by initiatives our To recognize Thank It's

a The to making and executing global of better across initiatives evolve the We're commitments day-to-day the our our for working business while set service teams delivering business our progress. are broad customers. steady on strong to and simultaneously

we detailed excited and in we and back our the invest progress outlook. the Investor we to compelling As opportunities believe have business at are about Day,

and progress productivity to the and of know much, Specific to working more. that and mentioned, next-generation expertise We are As teams modernized great centers data growth of and examples and visibility world. automation capabilities, work. talent platforms Paul hard range around with technology, much analytics enhanced state-of-the-art from have execute body we enhance distribution technology examples added the

very you thank much. So

details the to results. turning the business of Now segment

This Before for both I industrial compared impacted less and I U.S. year. the X total our should third prior and growth quarter our get specifics, into mention automotive the versus had segments. sales the sales that year comparable selling last to quarter the in third when day

growth the day by X.X%. X Industrial sales $X.X were negatively billion, global During XXX industrial impacted sales total estimate the points. quarter, We basis Global selling less that an increase approximately of for

points with Total a increase Automotive $X.X less to global of billion, were XXX selling an X.X% negative to day. impact sales basis the due automotive X Global for of approximately

to turning Industrial the Now Global segment.

results our quarterly and in line ahead plans. with essentially Our of we year-to-date expectations, remain our were

quarterly with The our single the through up average the low monthly was Recall each in Comparable year year. The of that was growth of period half same the first year be in the year relatively second during sales our highest month for last approximately daily sales compared consistent expectation versus and comp XX%. same growth quarter quarter was the X.X% the last to lower the industrial cadence period quarter at half. to the increased third digits.

During growth Motion food from more mining result by with the across as coming steel and equipment quarter, in softness industries strongest and saw mixed its markets various iron relative a and such the end machinery. products, offset

with to to strategies progress continues Motion profitable initiatives and share. market that mentioned, pricing, make As supply helping are including excellence, technology, excellent chain sales win e-commerce,

of now the example, in formed X inside accounts. active team approximately sales customer covers initially XX% XXXX As

sales proactive a across growth cost selling The with lower serve. double-digit are drive to the channel profitable calls to helping

sales, and deliver now experience, investments customer revenue helping XX% over points total e-commerce a channels are percentage X nearly also Our better technology across since year-to-date supporting growth up e-commerce at approximately XXXX. of XX% growth with

South older customers. center initiative efficiency, exciting speed new This supply productivity, Carolina progress. in legacy while various facilities chain example service Mill, second fulfillment Motion's improving another of to is and Fort consolidates

for Pac, as Asia performance fulfillment engagement, first survey margin our rates. delivered profit with profit independent in levels scheduled in and expansion. and Florida of centers expenses high reaffirmed market-leading opened double-digit team center XXXX local corresponding Lakeland, growth. We'll of another additional and teams are sales growth to by strong has end the In satisfaction Our out The the third quarter data operating fulfillment in XXXX. roll sales showing member delivered with customer with team Motion recent continue XX% energized combined openings strategy a at this reduction outsized

was quarter customers, additional market. up and plans third both detailed Industrial of this Motion has by same XX.X% at operating XXX approximately sales, is team profit a point million, the win The a trusted $XXX of fragmented a from basis to value-add another strong in adviser and profit improvement increase in in North segment excellent to was its share discipline representing in quarter XX.X% the year. last period and America Australasia. driven Industrial the

KDG strong exceed contributed has estimate The by to end million accelerated $XX the acquisition of this the synergy we our year. and will of integration performance the

the the Global Turning Automotive of Comparable sales third the segment. the in of mid-single-digit to sales in by our international outperforming businesses our our automotive low year, total from to negative each currency. the benefited of to growth X.X% geography, sales increased and the Similar X.X% double-digit diversification include and in growth to for international with local businesses auto mid-single-digit first in Automotive comparable global with sales segment U.S. Global half quarter,

moderation our be performance. to a factor year-over-year in in continues inflation The significant

benefit U.S. moderated to digits benefited third automotive in single-digit levels second high global inflation, the of XX%. quarter the inflation approximately quarter. in of mid-single low single expected, the of from includes third global which a Automotive As quarter By sales digits comparison, the XXXX, in from sales in

sales expect be low inflation global quarter. We the to digits in automotive in fourth single

of each the Automotive margin of segment operating with same last U.S. In X.X%, margin segment approximately delivered quarter year. segment period automotive related flat was third expense investments and versus Total deleverage down our impact in was planned expansion while the to international was profit to margin and sales. geographies X% last the year. the $XXX lower due quarter, up million,

let's automotive performance to of overview an by Now turn our geography. business

by held I which declined third day X.X%, in impact of outlined, In mentioned. with as as Further, sales X of had of year automotive quarter, quarter Paul headwind third comparisons sales growth X% estimated negative less down represent with event sales In last the evaluating slightly down approximately every approximately and our at U.S., our levels. comparable impacted associated the includes essentially Expo. our sales previously U.S. the of approximately performance selling included to NAPA in these benefit similar third X DIY XXX and the an with years year-over-year, in A sales which basis the were the negatively year-over-year commercial X the year-over-year basis Collectively, retail factors XXX points. both customers performing points quarter, commercial

and business Our tightening exited we with digits. U.S. the driven performance The down in the conditions single to is commercial in by low as tighter It's outperformed mixed execution expectations. market sales pressured quarter further the And believe on and below the say up average combination daily digits and the that conditions. remained business September end of and we of fleet up, by was month Automotive underperformance fair accounts market of major our a was was slightly our quarter consumer. the impact cadence August July, low single government

execution service we been enough crisp with customers. to have field side, in the our not the On

significantly chains we've addition, a availability while In supply few have some issues pandemic, with experienced in categories. lingering post improved product inventory

of market has inflation cost created including higher a for the of customers. and persistent tightening trading levels cautious Finally, interest environment higher our conditions, rates more impact

action. taking we're challenges the Despite

First, our further as of strategies, we've in data in field, by the our taken well intensify tools. enhance powered to service made analytics inventory DCs rigor and in stores at terms we've actions investments as operational

fill too in product acceptable remedy This rates few experienced pandemic. fill a we've to our Second, below performance levels has post rate taken long categories.

alternative the to address issue suppliers our result, stocked. are markets And to with as properly ensure our teams partnered merchandising a

costs, conditions, Finally, while market drive overall ongoing cost actions, to working on we control including and field sales growth opportunities Burt can't are closely continue we we the be discuss with which further. incremental to will disciplined

our the to for solid industry the team's need drive get is team share. competitive overcome automotive As with be. Automotive roll the at has we where opportunities mentioned, challenges execute U.S. and days are to in and long-term now, action recent expectations new confident to of grow has team but in With to we've underperformed moving priority we're win, fundamentals our taken XXXX, strategy to leadership and U.S. our XXX our on clarity profitably positioned quickly

approximately grew comparable third X%. X% currency local with In during Canada, sales in approximately growth sales the of quarter

strategic XX% and macroeconomic cautious execution team digits are and During total grew pleased low sales consumer. In our the our the initiatives quarter, automotive local X%. growth single delivered despite businesses and currency pressures a of automotive approximately digits, Europe, respectively, with and comparable heavy-duty mid-single Canadian sales we of another and of in with approximately their team strong quarter growth

drive value-creating markets execution and continue acquisitions. our to ongoing across growth our European market strategic to of share the strong We due initiatives and gains

and the by of share with During the to quarter, existing double-digit we each key winning third growth driven higher wallet accounts region. delivered with across in accounts, geographies, continued NAPA our expanding brand mid-single-digit wins the of

national square that level network in similar Paul had center new the automation progress within our this evolve strategy the team working teams helps open well foot on in distribution leverage the effort Scheduled investment of our chance This XXXX, to Burton complements the visit. and a supply to the technology and excellent to upgrades XXX,XXX making best addition, In facility U.K. is chain. practices. a in and are France

approximately as well to business, increased increased automotive customers. of for quarter facilities the local to sales with efficiency the in in our with consistently growth at Sales solid Asia In executing Pac recently commercial approximately see comparable quarter further service commercial. retail these drive and X%. X% currency, as in expect level third above such of high sales visited productivity We levels growth record impressive another third profitability. slightly team, delivering and team to quarter world-class and sales this both the it's a Having were the retail and with

value. Asia market driving improving employee Pac is value long-term all to strategic share increasing proposition, executing create Our initiatives its while team profitability, gains,

solid year We're of of entire of delivered dynamic third the global business confident growth continued to strategic again We the the work, balance strategic to results GPC a diversification. by our the despite the and remain global teams driven create geographic customers. deliver through are mix plans closing, environment. our In for team our your quarter you benefit will solutions your customer the to performance dedication team for GPC and on our right value. that initiatives taking hard your long-term and focused Thank care committed

over that, With I'll turn call Bert. the to

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

our is the discipline our Our double-digit our customers, alongside performance reflects in in the by quarter quarter. the growth focus operating which with the our third to for evident earnings teams business serve

highlights I and key that items had performance, Before X we the I no to third like you in through the note our quarter XXXX. of months of walk third would nonrecurring quarter

Our certain to to in in X.X% XXXX. GPC XXXX, quarter comparisons nonrecurring the integration related the third primarily items of billion increased Total excludes however, prior the KDG year, of $X.X sales to

reflects in X.X% This a acquisitions inflation, currency. and contribution a X.X% comparable a from sales foreign favorable of which of low X.X% levels single-digit includes improvement impact

Our sales offset but continued in performance decline sales in international Automotive. reflects ongoing a industrial, moderating auto, strength growth at by U.S. in

Further, points. estimated sales U.S. selling negatively in our growth X an less impacted XXX businesses basis day by

basis and Our year. third Gross point initiatives gross driver XX.X% ongoing margin the of in margin improvement from was of the sourcing expansion. period our our pricing primary strong were quarter execution same strategic a the last XXX

gross improvement. performance basis prior an XX points of rate XX year-to-date, our full XX we basis for our our to from from to points increase to XXXX now XX year and Given the expect margin of improve estimate

Our in billion $X.X and sales. third were total the XX.X% or nonoperating quarter expenses operating of

or our impacted XX is our and investments by support points, approximately planned These key IT sales a in attributable XX in members SG&A spending of basis the deleverage in to approximately initiatives. few The third increase adjusted compares in factors: and basis investments to quarter for primarily This investments increased total in the in SG&A last XX.X% third wages and wages year in basis approximately impacted by benefits teams for points. benefits strategic points the to of SG&A XX of technology an quarter. digital our expenses team third and while quarter

within earlier are hiring implementing team hard automotive SG&A, As has The team working Will, other of and actions been travel reducing around on is from and U.S. to on our and heard XX execute discipline has freeze basis in headcount, in driving successful which embedded to annual benefit, results. equate approximately you discretionary XX points costs. year-to-date These the cost improvement and actions. been a to guidance track

For the on of based deleverage and XX IT. team continue XX expect full year, our our points to we investments in to basis SG&A members

of Our third a was million, expansion basis The margin quarter profit year X.X%. point Segment margin expansion. XX revenue profit from gross segment our consecutive and growth total quarter drove up margin seventh XX.X%, and of $XXX increase last

is segment This now segment diversification, quarter's reflection margin profit. portfolio a of GPC value highlighted expansion of represents by XX% our the nearly of clear which industrial,

margin demonstrated global We've improved sequentially. to we strong by consistent improvement again flat U.S. segment driven automotive. overall expansion and due our was delivered automotive While Auto as Global margin margins Industrial, throughout segment XXXX,

to automotive execution have we our Further, the position business to identified at business take opportunities and improve share. U.S.

drive to XX expansion discipline XX of increase initiatives improvement. segment outlook margin and for productivity in of of combination the the of year, efficiencies basis basis and points to XX our we points, an to of expect further operating GPC now operational ongoing XX With strategic investments previous

third diluted quarter was net share. million or Our $X.XX income $XXX per

XX.X%. share net per XXXX, increase $XXX an diluted of adjusted or in to of compares million $X.XX This income

cash to flows. Turning our

strength the in to $X.X in which For months from our adjusted million X.Xx, and our $X.X We range third liquidity, is $XXX we compares billion flow. flexibility of available X operations the free our XXXX, in cash balance highlighting quarter debt our targeted with generated and first the X to billion and closed sheet. to EBITDA X.Xx, cash of of

capital our return of and through repurchases. business in allocation, which the our We shareholders the include remain M&A investment and our share through priorities capital committed key of capital to and expenditures to X dividends

in quarter. initiatives believe in our $XXX we and invested We $XXX XXXX, remain million including investing long-term the modernization third we have disciplined, million expenditures, capital for drive will During growth in business.

acquisitions $XXX our growth element As in Iberia. for we invested our the to year-to-date including position remain million a acquisitions, expand investment Goudy strategy, market-leading in of key

far $XXX of to continue We acquisition of pipeline the to bolt-on form returned shareholders sheet includes to our capital balance we to share targets to dividends our XXXX, in our well and paid environment. a approximately effectively have in million and repurchases. shareholders remain million through a flows generate positioned robust X.X Thus solid also million dividends our repurchase cash We This for in business. with and deploy cash shares. cash strong million $XXX in any economic used $XXX

Turning to our guidance.

navigate share our previously into our to and fourth earnings the continue headwinds and sales a year provided diluted we release. that With balanced move quarter. as guidance reiterating We guidance earnings are backdrop, of full QX mix tailwinds per updating our we in

XXXX. We now be $X.XX from our This to range in the previous approximately to to an per $X.XX earnings increase $X.XX. of XX.X% of expect compares to of to outlook diluted $X.XX, XX.X% share

Our and the continue guiding the range. growth to expect X%. X% with range Automotive sales and in sales growth for business unchanged, the is comparable guidance X% sales be segment, in total X% XXXX following: to are X% By segment, to X% to for growth to for we of sales total the we

we international Within or expect the Automotive U.S. with this this above to high end be range outlook, below. at automotive

down segment to also for slightly be We year. the Global Automotive expect flat to margin

For the expect growth the of X% X% sales X% with sales growth Industrial to X% in range. segment, we comparable total to also

industrial moderated sales this the segment fourth economy quarter. with along low As single-digit has and outlook our expected, the in growth includes growth the within

Industrial to points least by at XXX expect now segment expand year-over-year. we basis Global For the year, margin

our from and are flow. operations reaffirming for outlook We cash cash free

$X in billion. range in to be flow billion be from to billion million cash to free of and operations cash expect $X.X $X.X a range We $XXX the to of

includes among million supply of technology We and year, for which investments continue plan to $XXX full incremental million others. $XXX chain, to the expenditures in for capital

double-digit earnings margins earnings to quarter through returns a our third growth growth dividend. our low expand balance demonstrates and ability improve our to strong in and environments, backed closing, by sheet In shareholders our

what said on forward segment reporting double-digit growth, delivering strong do margin closing expectations mid-single-digit to year for margin results we on and our the full call full XXXX, growth we including gross on look for fourth are teams would year. expansion the for our and our in February. Our sales We and year quarter expansion, earnings

Thank questions. you, and it for we the turn now to back will operator your

[Operator will Instructions] come Scott from Ciccarelli our question Truist. of And first

I know your Investor you Day wasn't targets all each we've that long given for while ago, on targets industrial but seen margin quarters? great last you are guys how from of thinking progress had the outlined performance the the some margin automotive And divisions. about side, guys few your your

Yes, to X-year be automotive that Bert. long for flat Look, cycle. years mentioned years slightly remarks, that. term. we're prepared down. And than in a it's close X question. we're the not a thinking I in got all to we've Thanks With again, X as don't we We've think get global left, my to started I you March changed maybe segment this plan how we on year, to when and unusual for left announced looking differently Scott, it's as out little

pricing and auto, But long-term as feel got are look the levers management we margin we particularly that still expansion, benefits. for at we category confident there. the

challenges, in thinking we've some things this. in further talk investments, got and got we and levers. how gross long-term benefits pricing we're early those really short-term those We've when but that's a margin innings. supply about continue expansion, and about remain IT, to investments like chain, And sourcing long-term around investment So we'll see

despite And this choppiness. so near-term bullish really we're of still the term some on long

obviously near-term of processes given to the and way implementing lose this of the And market Okay. you choppiness But auto to improve That's some it's get U.S. improvement hard business. helpful. you back. share, is guys once the works various typically kind are then business

So just can that in actually you back? of and stopping -- implementing kind ship changes how call guys really patching thinking guys thinking you incremental you're are the losses? Or can you share that are market are holes you share the about --

Yes. Scott, it's Will.

thoughts. to by to just time better U.S. few and day to of than take a is for care is what deal in be just clear, be automotive customers know, every you to a incredibly And the working add me start customers Let anyone, I'll very with. And we've be quality team, quick hard be easy that position have part as -- the means and got needed saying their right at to the product I available efficiently in the transaction pull the search place park right customer. get once part to and quickly the and that to right the then and market, offer efficient for seamless. them to that we is the be it in and

might just a performance that been pace. we're we is when making better we're work with every while We little about these bit And on. we've have recent more share, progress. so needs a need recently what indicate urgency be think we customer you do given we failure might still with part And working faster opportunities to disappointed have working on feel back and in and of probably about good good that that no at each to what body we're day, of that. There's on of single point of

no structure. just add that. business or would shifted I on this in our Scott, we've long structural We nothing or we'll pull. We'll the And Gap] have And it is to levers sense get [Audio of in a done. our has to I Look, it the them. doubt up changed that organization there in a know get been hit done. to business and down me, time. long, There's trust on

The of Lasser next from Michael question UBS. comes

compare And how you getting that can quarter? much worst? in rate or getting business, you market how it the more auto frequent have U.S. the Or is of free share better? sort On run did is lost that

in repeat out fading last you that and on can of the of you're kind it. Michael, part question,

Sorry, Paul.

better? losses they Or Sorry. are getting your getting shares worse? Are

some chain Yes, don't the thoughts profit small. with we're it customers. But And which worse. we've plus given have in moderating elaborate competitors performance on the every both of performance. last serve this takes it's I months. I XX couple had think our with recent indicate the I a 'XX. few Scott, over haven't would you, tell competition getting strong of the over Michael, back always of think share the last as thought seen credible whole maybe performed said the share quarters. and that as to just expectations large I day And would those we we Listen, in pool, supply and said, to to consistent our a some execution with challenges I clearly disappointed is we've

Some of gotten as our relates have healthy more inventory. it smaller to competitors

to on need position We've worse. a so sight And playing fragmented. strength different to we good we're good taking line taking maybe we're It's got a very huge call. about them And XX not know But and we return do market. getting we what play is from of of place were working we're a like we Paul XX share. news what as that said, The as the a of on where to feeling they or ago. months we're it's than talked action in seeing

with about a got the share. market really very throughout have down It's And and to scattered I you've have very country, break but would it's Yes, -- along that, you broad about fragmented to add mean, you others. X, the When industry. WDs, question. just start a Michael, thinking I that you then big independent talking

our you, and I'm And we encouraged I'm we to we've we're look for long to And changes, to categories, product the made availability make see I that when fault tell got if I those changes. our improved at categories to product too is category. specific business, took that it have see, and supply at anything, by us improved have for needle move pleased really you chain. our and look category So what would

think I that. we'll on touched

So are and yes, better are the doubt, no Randy's days ahead over all team it. under leadership

My follow-up we spaces question influence... [Technical the in Difficulty] internal is sticking

Michael, it's Bert.

you can't cutting still pretty hear give. you out You're bad. [indiscernible] We very

dynamics that's Genuine is, to U.S. hopefully, follow-up better. My influence the willingness acquisitions do auto some now? So Parts right of business question or the share in ability

I Will would happening say you I -- We first for us. And welcome as here Bert. to look, what's for given universe of it's foremost, we GPC. Paul Michael, the no. and joining have and what at that. and look coverage mean, me appreciate really, the of in cycles. about here $XXX generated We've had pretty thing as well great is that we near through some The of managing billion $X.X million term. free cash GPC flow. something all we're year-to-date, color performed just cash on, Thank through

a earnings double have growing digits We and tremendously balance and strong softer we're despite line. our improving top some margins sheet,

and great in allows is And performance capital term. holistically including the so to for think the M&A continue I market the of expenditures are take of long great to that business advantage that us the the the investments market, thing business

need in And move, choppiness so may we while the our have whether to we as move a term, automotive doesn't or M&A impact it's it whole portfolio. short to little ability on U.S.

comes ISI. question Greg of next from The Evercore Melich

love particularly I'd the have deeper in the and that. rate inflation to go trend through exit may and a how little quarter the impacted

our views come to Greg, back kind first it's and then of about outlook. inflation on guidance Bert. and we'll talk I'll

talked bit consistently in the and where we we have. thought this of we've about developed that of think thought bit Inflation a the could little they thinking about would exactly throughout of expected almost year. year way little as begin to course that kind inflation. we with we year. the moderate the really a has course the through way the the a out along planning thinking be That's of the trends we're of surprise We and they'd I

digits low moving to started the in low to all digits, in finish So digits quarter. up we we expect out QX, and the third again single digits. year here mid-single single with in the low year single

high particular pretty digits think think really and outlined. One particular, we down of third we and Automotive a dissipated for with this prepared as has in period XX%. said you at in And out the in that's for expected. the against. call kind up differently, XXXX, automotive the significant we're price at thing policy at important inflation Will for and in nearly looking around world just inflation, about And on the keep how has tick implemented segment I tough tailwind Global that's low the to been sales when a were ago, comp single-digit quarter followed in his year in So I coming it's that single as the U.S. it or level a focus, mentioned and monetary was remarks, inflation to aftermarket, XXXX

low right the close think expected, year we'll I we So out now, board. moving as across the single digits

through In level maybe We guidance to here a year, then of range to of a up work to bottom and highest the and terms our the earnings I'll quarter to $X.XX. automotive. us U.S. double-digit down level, the outlook think rest growth, terms the we new some just at had of and great lift that earnings narrow gave with that how $X.XX thinking of confidence in we're up getting about start bringing the range

ready As We've my full margin for data. industry in tailwinds continued least of not mix but Industrial going prepared thought. segment margin new I a There's is improved it's discipline remarks, for cost, to have headwinds trend, really that's leaning to our at industrial we in for than margin and a expectations trends GPC. we're And gross fundamentals both to expansion tailwind, our outlook, said of we segments. have in lead ongoing call year, solid production the and bit a better going positive for I'm late. some to positive

you got there. headwinds, of terms In most these. know of We've guys environment choppy out a

back, probably October got repayments month. thing starting We've a in student billion with new a that's loan geopolitical near considerations, inflation somewhere $XX here

over impact will month. So interest sharply consumer that up obviously, last the rate something the environment

some time be And so to see operational changes Will effectuate going taken consumer. also We're rigor prudent together, mentioned. to it's going an that to take cautious that about of the we and increasingly the

growth Will, when the expect how the the out of taken year guidance going the that margin expect year. close tough expansion, I cadence we're year. full year And environment revenue and growth, a our strong rest for on and little of together, on quarter. maybe it's thinking comment margin We're mid-single-digit a again, a with double-digit we in think, gross based segment earnings So about to have we bit expansion, is But done. the all if you the said to to want

single call July August. September was we of scientific, auto in in it's We was digits. probably compare. and down up for year probably up, mixed That the our July have the -- exited we out was did impacting Greg, by quarter, Yes, with through not August event quarter. slightly last of all the the U.S. said it quarter low as time the Napa the I low processed, digits, it's sales prepared single was Expo cadence think remarks, year-over-year

So end it's the as you think of probably about adjustment, quarter. to that mid-quarter, mid

I'll coming Greg, color. And back little more a and giving bit

looking talked of are start maybe that how pull things You as up. and kind about we

about weakness more this potential actions than And improvement new President, automotive we full top weather out And QX, year it's U.S. the really some Automotive, a on the line. drive on echo. of continue started to I the showed. with said we we to impact little new some think year, in made As softer offset further a we the QX with there. that had QX feeling moves as cost to knew our business U.S. we

coming But to know executive tough got And to to QX things away automotive really U.S. with the result that respect for look We'll fourth the or share as we our look quarter team a and up the the that USA we perspectives. performance. again. impacting are a the at walk those catalyst at yet we comp business,

U.S. fourth X.X%. comp a was reported growth for X.X% sales So quarter was automotive

another quarter for all quarter. the have And to be in considered, we tough we with ahead. them line expect fourth the things quarter So third

you Got peak when out it think it. year, unit even mix. more if inflation brought like average price, did and And maybe you about to last

Yes.

for the that. for on. we'll another comp tough have and the business, been quarter our would mention third got that So We've highest inflation year comp

the fourth to be around Automotive quarter. in going for U.S. the X% That's Inflation business.

peak been still QX, would a QX tough we have the but have comp. So

question Horvers next from Christopher comes The of JPMorgan.

Chris. on [indiscernible] for Christian It's

you So believe as outsized share should been slowed reasons look indicators motion relevant there industrial to industrial economy those or the markets gains inflect KDG have trends organic it acquisition, as again? ahead, you any positively do production become the as more there's and has end outperforming negatively? following the where And the ISM digest are

Yes, the at particular, post clear. still points. in Christian, production. data monitor Having look said encouraged, correlation that we've trends, the thanks it closely. them KDG indicators. pandemic track less And was recent publicly We those was for important the said those question. seems that, are in by whether Look, X that it And we've and been or obviously, industrial we

cautiously look and what as of part recent business optimistic. we're we we those of at our certainly inform on the views outlook they're of inflections, the based So

There's business. those to no specific a metrics tie of our with specific part

the a diversity business. of of representation it's think I good our

of based seeing at conjunction it's and external but a that perspective. in so data, other both customer variety feedback, data And vendor we of optimistic something a and look in third-party we're from with we're pieces different business on what internal cautiously the

Will tag I said. on just to Chris, would what

XX X We will But September. indicators Christian, we which September. in numbers, in encouraged lift track the different saw X we nice industrial motion in those a of meant we are production indicators business, saw in improve our

automotive has products, to food like including equipment be mining. DC, all logistics, I mean, are continued categories So leasing, positive up, trending

trough. that Will's a So downturn has to industrial yes, has reached point, the

what somewhere follow to major close. I think begin see the business And generally is see production XX like XX if as industrial indices we that to begin we're later, bounce hasn't, it to days back. our generally we darn find We shift. we'll

had team top for at we're So a looking here again, great Motion. better to group. XXXX phenomenal that and on line forward days year, in They've the

have very fair So look vendor items in just XQ, XQ gross driven historically are unsustainable you to That's a it. about volatility given in gross margin, out or there ahead, think amount is as there? there you of Got and onetime allowances -- call any helpful. margins? And as anything

to a the related a to Nothing really you proud had there. high of margin. clean just noise the very team. on of gross at Nothing call level. executed it's some We They've Super out. Christian, Bert. quarter mentioned

sourcing third So margin here come XXX quarter our on of the gross we're expansion points investments pricing. back the the of and continues to making in of basis in

Basham from comes question Wedbush Securities. next The of Seth

pricing done gross some you've a what more market business. leading pricing less Obviously, regarding the there. automotive in strategy confidence not the share job that gives U.S. great to But the you're improving is margins aggressive question you My is losses? your

believe our we don't gross at expense margin gains. of question. a Seth, it's work come it's question, good Yes, share Look, that a Bert. thoughtful around And has the

long-standing we're generally price more You about driving know of that that geography. testing those against and remain in not showcased and is even investments up flex strategy us with and our believe the at competitive, unit data making pricing category in in aftermarket. strategies be growth. have balance us the line and We stay the SKU strategic, ability tools. it we It's the and Investor the quality in sales category leading and at level all factor analytics the Many down by and the environment allows dynamics. and to respond both to It given more really market Day of an to as availability moves

points we XX continue is improvement there looking full now with is the XX gains on year margin I for result. stay of We impacting answer the year, short that our expectations lifted We at pleased driving So to our share that losses. no. the work believe our focused think don't gross and for And performance. or basis to

And mentioned to helpful dynamics. market responding you That's color.

an and benefits some you cost how think. you latter of the talked of segment. You . on talked your competitors point, being stock. account update smaller the you better give about weighing in us Can Last that major quarter, about

or the piece XX% commercial to that about the It's thinking business. our business. we're business way In about of that of the XX%

inside outsized X different or So as said of business. major X total I large before, a the business, it's And verticals. not portion there's think it's even sub commercial our account we've of

each those X of nuances there's with And different verticals. associated

through that acquisition activity. just business generally seen that customers quarter in in some was be some slightly last consolidation But some at have have their particular, of of players, work that some impacted year-over-year national of our existing level to to to speaking, some the same of consolidate the kind of come as down. continues we it they So the trends the

Yes.

fleet where growth see that of recent on our good color account seeing government. as in expect alluded continues. growth dealer of that. to, continue we segment big the We're that to OE chains. Will we additional -- flip national break little apart the the business, some in challenges side, tire challenges for as major a some we -- which which our on we're Just seeing the But in and those segment, We're is

think So there's we'll But those and again, here takes. issues, our puts and going I forward. addressing improvements see team is

comes question next The Stephens. of from Daniel Imbro

I want a to follow-up to start Scott's question margin. Motive on the earlier. Maybe

management category I think years. pricing as and levers you mentioned still to in coming pull the

you guess to as about I of . to again? hear. in the the as curious, a the as then pricing And limit you benefit backdrop margins the some management or that private of in NAPA can business new to auto about fixes talk good Just lever suppliers, category grow kind it and ability offering? the expand you the you answered to think past the does use just question. pricing is But label that

think Sure. on we that think longer up term differently the point. don't anything earlier about to I Look, follow

these have we we Prism. at expected we than to X some year As by be everything maybe Actually, GPC are continuing going our changes opportunities differently. be played opportunities anything more globally I X we'll in gross March. and going bit slightly looking But more ago, out aren't opportunities a and This when we said, look little years a competitive, suppliers. has at in differently get there there size margin as scale, announced to impacted than through with market to of

all remains as of opportunity us. there's more actually The to So there. environment for pricing be an limitations opportunity think still We those rational. to tend at I see

matter. change way As change I view us data And that and on work mentioned haven't the there a allows and flexible great nimble. a analytics short that few really the got would that or longer in behaving is minutes term the term the be we we've seen space to that for our ago, competition in

a and as essentially category look category, at volume. your our That's question as we management Yes, we Daniel, add I around just the NAPA would Day. at at we Investor product talked management. all When the upside. -- And category look by we now, just brand think reminder, global I

has of our across we strong growth presence really key Europe, inventory Asia from course, Pac and product couple So got standpoint and brand that supply NAPA a now in a a into categories. better position of accelerate to get

there helpful. then how laid in just month cadence a it selling day the And we That's to Was day quarter are Great. fall be that Bert, should had Is model? clarify, you there holiday? out? of as did up, you of X happen? guess I did selling a And think makeup? any then what the in fewer about any as coming X in that more And aware I quarter. guess, we timing

that So me back I more of your missed one you give the question. to beginning time. very Can

as X fewer comps? about selling timing said it of that? then Was what month a the holiday And into You drove did fall what or gave we kind day. of think us month-to-month you it cadence

I'd not we're fourth both was leave for into quarter, Automotive The quarter for flat the quarter be get Motion then in rather just and month. on U.S. to in going day. impacted X year-over-year the U.S. out by days. parsing And We'll there. operating it the by

Our of last Goldman Kate Sachs. from McShane question comes

ones. quick X had We

of is there line when that inventory in issues of And way of a the highlighted deviate you may inventories First, . light some be between is to little improves? the a pockets versus time where a execution there availability automotive?

about our area an to particular last as has There analytics great where have the information around we've Yes. we've XX of and been XX we in inventory -- focus. analytics investing opportunities in is on talked months got

at just have, us sure into we not So where a stuff you've It's better not precisely new availability And right the execution enough that's got making of better the movement. that's just moving here. there's I that but are inventory opportunities getting right opportunities. we know have and think that time to again, made it's that the fast. And taking the thought spot the

we're a ongoing up our lot urgency. on we've And got it's visibility mean we've forever, probably an topic So and I of that. this stepping working into just effort. been

they're we're and progress it, going on are every urgent, teams -- day. we'll the each to and So make focused

to the I what Will just were tag rolling new for pandemic pandemic. us said, are on programs during would that speak. out as Kate, specific problematic And those categories we post even the and

categories So expect improvements we would forward. product going those to here in see

just in And anticipated guide then same-store the you our bringing of to the . originally so, comp Was sales last if Okay. quarter. down headwind around more when X% X% X%. in what guiding is basis original X% being QX? to And question what's anticipated Is is that in X% X% that XXX point to it automotive. were to

Bert. it's Yes, Kate,

the knew we was headwind course, day Expo the and there. selling Of

So we to us don't Remember, to quarters. a all. that at wasn't guide surprise

we year that. thinking lower throughout through lens, guidance thinking top we morning. guided, the did we line full for we our about I we guide So were as thought -- weren't the QX that We reaffirmed again, sell about would through for And through guide automotive. our this we've And year. the

the But slower to day, year. having for about end performance smart the the just detail on. what this in sales progress and going recovery you the around we lot QX. as the a morning. it's again, factor we've that's of for have softer line in we're We'll being thought given U.S. full reaffirmed year full execution I and top as to at our we didn't expectations, quickly of thought mean year-to-date think about as working quite things automotive And

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

like of teammates customers. how your and company interest and quarter today, in we year-to-date Andre. to Parts also the to Genuine thanks Company. and Thanks, our just just the to they combined do joining for for Yes. your our of us great globe we for the in efforts around And day. and want know thank reiterate, you for all I'd them continued all a all and Have thank much appreciate let for their

The conference presentation, may Thank you attending now concluded. for and you today's disconnect. has now