Genuine Parts Company, a leading global distributor of automotive and industrial replacement parts, announced its results for the second quarter ended June 30, 2024, with acquisitions figuring strongly in increased sales figures.

“I want to thank each of our global GPC teammates for their hard work and dedication to serving our customers,” said Will Stengel, President and Chief Executive Officer.

“Our quarterly results reflect softer than expected market conditions, which are tempering demand particularly in our Industrial and U.S. and European Automotive businesses. Despite a challenging macro-environment, our teams are operating well and remain focused on executing our long-term strategic initiatives.”

Second Quarter 2024 Results

Sales were $6.0 billion, a 0.8% increase compared to $5.9 billion in the same period of the prior year. The sales result is attributable to a 2.2% benefit from acquisitions, partially offset by a 0.9% decrease in comparable sales and 0.5% unfavorable impact of foreign currency and other.

All figures in USD.

Net income was $296 million, or $2.11 per diluted earnings per share. This compares to net income of $344 million, or $2.44 per diluted share in the prior year period.

Adjusted net income was $342 million which excludes a net expense of $46 million of after tax adjustments, or $0.33 per diluted share, in costs related to our global restructuring initiative and the acquisition of Motor Parts and Equipment Corporation.

This compares to net income of $344 million for the same three-month period of the prior year, a decrease of 0.9%. On a per share diluted basis, adjusted net income was $2.44, in-line with the same period of the prior year. Refer to the reconciliation of GAAP net income to adjusted net income and GAAP diluted earnings per share to adjusted diluted earnings per share for more information.

Second Quarter 2024 Segment Highlights

Automotive Parts Group (“Automotive”)

Global Automotive sales were $3.7 billion, up 2.0% from the same period in 2023, reflecting a 3.1% benefit from acquisitions, partially offset by a 0.6% decrease in comparable sales and  0.5% unfavorable impact of foreign currency and other. Segment profit of $314 million decreased 4.7%, with segment profit margin of 8.4%, down 60 basis points from last year.

Industrial Parts Group (“Industrial”)

Industrial sales were $2.2 billion, down 1.1% from the same period in 2023, with a 0.7% benefit from acquisitions, offset by a 1.6% decrease in comparable sales and 0.2% unfavorable impact of foreign currency. Segment profit of $277 million decreased 2.3%, with segment profit margin of 12.4%, down 10 basis points from the same period of the prior year.

Six Months 2024 Results

Sales for the six months ended June 30, 2024 were $11.7 billion, up 0.6% from the same period in 2023.

Net income for the six months was $544 million, or $3.89 per diluted share, compared to $4.58 per diluted share in the prior year period. Adjusted net income increased 0.6% to $652 million in the first half of 2024 compared to net income of $648 million in the prior year period. Adjusted diluted earnings per share was $4.66 compared to $4.58 in the prior year period, an increase of 1.7%.

Balance Sheet, Cash Flow and Capital Allocation

The company generated cash flow from operations of $612 million for the first six months of 2024. Net cash used in investing activities was $762 million, including $259 million for capital expenditures and $580 million for M&A. The company also used $382 million in cash for financing activities, including $272 million for quarterly dividends paid to shareholders and $75 million for stock repurchases. Free cash flow was $353 million for the first six months of 2024. Refer to the reconciliation of GAAP net cash provided by operating activities to free cash flow for more information.

The company ended the quarter with $2.0 billion of total liquidity. Total liquidity comprises of $555 million in cash and cash equivalents and $1.4 billion of our $1.5 billion revolving credit facility available after the effect of $100 million of commercial paper outstanding as of June 30, 2024.

2024 Outlook

The company is revising full-year 2024 guidance previously provided in its earnings release on April 18, 2024. The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its guidance, which is outlined in the table below.

		For the Year Ending December 31, 2024
		Previous Outlook		Updated Outlook
Total sales growth		3% to 5%		1% to 3%
Automotive sales growth		2% to 4%		1% to 3%
Industrial sales growth		3% to 5%		0% to 2%
Diluted earnings per share		$9.05 to $9.20		$8.55 to $8.75
Adjusted diluted earnings per share		$9.80 to $9.95		$9.30 to $9.50
Effective tax rate		Approximately 24%		Approximately 24%
Net cash provided by operating activities		$1.3 billion to $1.5 billion		$1.3 billion to $1.5 billion
Free cash flow		$800 million to $1.0 billion		$800 million to $1.0 billion

Conference Call

Genuine Parts Company held a conference call to discuss the results of the quarter. Interested parties may listen to the call and view the supplemental earnings deck on the company’s investor relations website. A replay of the call is available on the company’s website or toll-free at 888-660-6345, conference ID 93997#

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