Q124 GPC earnings

earnings summary

Earnings Results: • Total GPC sales of $5.8 billion increased slightly versus the same period in the prior year • Total company segment margin increased 30 basis points • Mid-single-digit adjusted earnings per share growth from the same period last year • Adjusted net income was $311 million or $2.22 per diluted share, up 3.7% from prior year

Future Guidance: • Raising adjusted diluted earnings per share guidance for 2024 to $9.80 to $9.95, an increase of 5% to 6.6% from 2023 • Expect total sales growth in the range of 3% to 5% with a more moderated first half and stronger second half for both automotive and industrial • Expect full year gross margin expansion of 30 to 50 basis points • Target corporate expense to be approximately 1.5% to 2% of sales • Expect cash from operations to be in a range of $1.3 billion to $1.5 billion with free cash flow of $800 million to $1 billion

In the first quarter of 2024, Genuine Parts Company delivered results that exceeded expectations, with slight sales growth, improved margins, and mid-single-digit adjusted EPS growth compared to the strong performance in Q1 2023. The company’s business mix and geographic diversity provided a positive backdrop despite challenges in the macroeconomic environment, such as higher interest rates and cost inflation.

The Global Industrial segment saw a slight sales decline but delivered exceptional profit conversion, benefiting from supply chain initiatives, enhanced data analytics, and strong expense discipline. The Global Automotive segment posted positive sales growth, with strong performances in Europe and Australasia. The U.S. Automotive business demonstrated solid sequential improvement driven by decisive actions taken in previous quarters.

Looking ahead, GPC remains confident in its ability to drive results, supported by industry fundamentals and the execution of strategic initiatives. The company raised its adjusted diluted EPS guidance for 2024 and reaffirmed its sales guidance, expecting stronger growth in the second half of the year. GPC continues to focus on its five key priorities: talent and culture, sales effectiveness, technology, supply chain, and emerging technology, complemented by disciplined acquisitions.

Notable quotes: • “Our results in the quarter reflect and highlight the value of our business mix paired with our geographic diversity.” - Paul Donahue, Chairman and CEO • “We are pleased with the progress with our supply chain initiatives and enhanced data analytics, which are driving inventory productivity, lower cost and higher customer service levels.” - Paul Donahue • “Our outlook for 2024 reflects the ongoing confidence in our teams and the actions we are taking to better align our business.” - Bert Nappier, EVP and CFO