Leading aftermarket distribution network Genuine Parts Company, most closely identified with the NAPA Auto Parts network, announced its results for the third quarter ended September 30, 2024.

“I would like to thank our global GPC teammates for their hard work in serving our customers during the third quarter,” said Will Stengel, President and Chief Executive Officer.

“Our results were below our expectations, primarily driven by continued weakness in market conditions in Europe and our Industrial business. While the external environment remains challenging for the balance of 2024, we expect the combination of near-term actions and long-term investments to better position us when market conditions improve.”

Third Quarter 2024 Results

Sales were $6.0 billion, a 2.5% increase compared to $5.8 billion in the same period of the prior year. The growth in sales is attributable to a 3.2% benefit from acquisitions and a net 0.1% favorable impact of foreign currency and other, partially offset by a 0.8% decrease in comparable sales. The third quarter included one additional selling day in the U.S. versus the same period of the prior year, which positively impacted sales growth by approximately 1.1%.

All figures in USD.

Net income was $227 million, or $1.62 per diluted earnings per share. This compares to net income of $351 million, or $2.49 per diluted share in the prior year period.

Adjusted net income was $263 million which excludes a net expense of $36 million after tax adjustments, or $0.26 per diluted share, in costs related to our global restructuring initiative and the acquisition and integration of independent stores.

This compares to net income of $351 million for the same period of the prior year, a decrease of 25.1%. On a per share diluted basis, adjusted net income was $1.88, a decrease compared to $2.49 in 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.

Third Quarter 2024 Segment Highlights

Automotive Parts Group (“Automotive”)

Global Automotive sales were $3.8 billion, up 4.8% from the same period in 2023, consisting of a 4.4% benefit from acquisitions which was primarily driven by the acquisition of automotive stores in the U.S., a 0.2% increase in comparable sales and a net 0.2% favorable impact of foreign currency and other. The additional selling day in the U.S. positively impacted Global Automotive sales growth by approximately 0.9%. Segment profit of $262 million decreased 18.6%, with segment profit margin of 6.9%, down 200 basis points from last year.

Industrial Parts Group (“Industrial”)

Global Industrial sales were $2.2 billion, down 1.2% from the same period in 2023, with a 1.3% benefit from acquisitions, offset by a 2.4% decrease in comparable sales and 0.1% unfavorable impact of foreign currency. The additional selling day in the U.S. positively impacted Global Industrial sales growth by approximately 1.4%. Segment profit of $259 million decreased 8.5%, with a segment profit margin of 11.9%, down 100 basis points from the same period of the prior year.

Nine Months 2024 Results

Sales for the nine months ended September 30 were $17.7 billion, up 1.2% from the same period in 2023. Net income for the nine months was $771 million, or $5.51 per diluted share, compared to $7.08 per diluted share in the prior year period. Adjusted net income decreased 8.4% to $915 million compared to net income of $1 billion in the prior year period. Adjusted diluted earnings per share was $6.55 compared to $7.08 in the prior year period, a decrease of 7.5%.

Balance Sheet, Cash Flow and Capital Allocation

The company generated cash flow from operations of $1.1 billion for the first nine months of 2024. Net cash used in investing activities was $1.2 billion, including $386 million for capital expenditures and $954 million for M&A. The company also used $125 million in cash for financing activities, including $411 million for quarterly dividends paid to shareholders and $112 million for stock repurchases. Free cash flow was $711 million for the first nine 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 $2.6 billion of total liquidity. Total liquidity consists of $1.1 billion in cash and cash equivalents and $1.5 billion available on the revolving credit facility.

2024 Outlook

The company is revising full-year 2024 guidance previously provided in its earnings release on July 23, 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		1% to 3%		1% to 2%
Automotive sales growth		1% to 3%		3% to 4%
Industrial sales growth		0% to 2%		-2% to -1%
Diluted earnings per share		$8.55 to $8.75		$6.60 to $6.80
Adjusted diluted earnings per share		$9.30 to $9.50		$8.00 to $8.20
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 will heldd a conference call Oct. 22 at 8:30 a.m. Eastern Time to discuss the results of the quarter. A supplemental earnings deck will also be available for reference. 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 will be available on the company’s website or toll-free at 888-660-6345, conference ID 72988#, two hours after the completion of the call.

FINANCIAL TABLES FOLLOW

GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)		2024		2023		2024		2023
Net sales		$     5,970,198		$     5,824,602		$   17,716,396		$   17,504,726
Cost of goods sold		3,771,757		3,715,361		11,262,997		11,247,341
Gross profit		2,198,441		2,109,241		6,453,399		6,257,385
Operating expenses:
Selling, administrative and other expenses		1,722,400		1,551,799		4,944,783		4,644,696
Depreciation and amortization		106,036		83,860		295,848		261,948
Provision for doubtful accounts		7,119		8,417		19,008		22,378
Restructuring and other costs		41,023		—		153,825		—
Total operating expenses		1,876,578		1,644,076		5,413,464		4,929,022
Non-operating (income) expense:
Interest expense, net		27,818		15,827		67,429		49,146
Other		(3,548)		(15,722)		(36,469)		(44,338)
Total non-operating (income) expense		24,270		105		30,960		4,808
Income before income taxes		297,593		465,060		1,008,975		1,323,555
Income taxes		71,011		113,862		237,955		323,906
Net income		$       226,582		$       351,198		$       771,020		$       999,649
Dividends declared per common share		$           1.000		$           0.950		$           3.000		$           2.850
Basic earnings per share		$             1.63		$             2.50		$             5.53		$             7.11
Diluted earnings per share		$             1.62		$             2.49		$             5.51		$             7.08
Weighted average common shares outstanding		139,193		140,335		139,326		140,569
Dilutive effect of stock options and non-vested restricted stock awards		406		599		500		716
Weighted average common shares outstanding – assuming dilution		139,599		140,934		139,826		141,285

GENUINE PARTS COMPANY AND SUBSIDIARIES SEGMENT INFORMATION (UNAUDITED)
		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2024		2023		2024		2023
Net sales:
Automotive		$     3,799,789		$     3,626,943		$   11,100,800		$   10,787,769
Industrial		2,170,409		2,197,659		6,615,596		6,716,957
Total net sales		$     5,970,198		$     5,824,602		$   17,716,396		$   17,504,726
Segment profit:
Automotive		$        262,195		$        322,004		$        849,106		$        915,771
Industrial		258,753		282,807		806,433		828,166
Interest expense, net		(27,818)		(15,827)		(67,429)		(49,146)
Intangible asset amortization		(36,292)		(33,667)		(105,077)		(113,414)
Corporate expense		(113,949)		(90,257)		(283,695)		(257,822)
Other unallocated costs (1)		(45,296)		—		(190,363)		—
Income before income taxes		$         297,593		$        465,060		$      1,008,975		$      1,323,555
(1)        The following table presents a summary of the other unallocated costs:
		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2024		2023		2024		2023
Other unallocated costs:
Restructuring and other costs (2)		$        (41,023)		$                —		$      (161,312)		$                —
Acquisition and integration related costs and other (3)		(4,273)		—		(29,051)		—
Total other unallocated costs		$        (45,296)		$                —		$      (190,363)		$                —

(2)	Amount reflects the global restructuring initiative which includes a voluntary retirement offer in the U.S., inventory liquidation costs, and rationalization and optimization of certain distribution centers, stores and other facilities.
(3)	Amount primarily reflects integration costs related to the completion of the acquisitions of Motor Parts and Equipment Corporation (“MPEC”) in April 2024 and Walker Automotive Supply, Inc. (“Walker”) in July 2024, including professional services costs, personnel costs, and lease and other exit costs.

GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share data)		September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents		$        1,078,118		$        1,102,007
Trade accounts receivable, less allowance for doubtful accounts (2024 – $64,138; 2023 – $56,608)		2,380,518		2,223,431
Merchandise inventories, net		5,527,034		4,676,686
Prepaid expenses and other current assets		1,723,832		1,603,728
Total current assets		10,709,502		9,605,852
Goodwill		3,034,339		2,734,681
Other intangible assets, less accumulated amortization		1,915,832		1,792,913
Property, plant and equipment, less accumulated depreciation (2024 – $1,783,163; 2023 – $1,592,658)		1,909,522		1,616,785
Operating lease assets		1,665,818		1,268,742
Other assets		1,024,165		949,481
Total assets		$      20,259,178		$      17,968,454
Liabilities and equity
Current liabilities:
Trade accounts payable		$        6,100,534		$        5,499,536
Current portion of debt		810,982		355,298
Dividends payable		139,111		132,635
Other current liabilities		2,072,781		1,839,640
Total current liabilities		9,123,408		7,827,109
Long-term debt		3,806,950		3,550,930
Operating lease liabilities		1,372,283		979,938
Pension and other post–retirement benefit liabilities		224,019		219,644
Deferred tax liabilities		483,262		437,674
Other long-term liabilities		539,102		536,174
Equity:
Preferred stock, par value – $1 per share; authorized – 10,000,000 shares; none issued		—		—
Common stock, par value – $1 per share; authorized – 450,000,000 shares; issued and outstanding –      2024 – 139,078,065 shares; 2023 – 139,567,071 shares		139,078		139,567
Additional paid-in capital		193,491		173,025
Accumulated other comprehensive loss		(942,852)		(976,872)
Retained earnings		5,306,755		5,065,327
Total parent equity		4,696,472		4,401,047
Noncontrolling interests in subsidiaries		13,682		15,938
Total equity		4,710,154		4,416,985
Total liabilities and equity		$      20,259,178		$      17,968,454

GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		Nine Months Ended September 30,
(in thousands)		2024		2023
Operating activities:
Net income		$       771,020		$       999,649
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		295,848		261,948
Share-based compensation		37,280		47,340
Excess tax benefits from share-based compensation		(8,301)		(6,770)
Other operating activities, including changes in operating assets and liabilities		378		(219,721)
Net cash provided by operating activities		1,096,225		1,082,446
Investing activities:
Purchases of property, plant and equipment		(385,590)		(349,858)
Proceeds from sale of property, plant and equipment		74,215		7,339
Acquisitions of businesses		(954,207)		(218,177)
Proceeds from divestitures of businesses		3,401		—
Proceeds from sale of investments		—		80,482
Other investing activities		16,989		6,785
Net cash used in investing activities		(1,245,192)		(473,429)
Financing activities:
Proceeds from debt		797,602		2,543,882
Payments on debt		(124,337)		(2,544,619)
Shares issued from employee incentive plans		(16,524)		(23,689)
Dividends paid		(411,396)		(393,420)
Purchases of stock		(112,499)		(172,347)
Other financing activities		(8,018)		(8,826)
Net cash used in financing activities		124,828		(599,019)
Effect of exchange rate changes on cash and cash equivalents		250		(8,824)
Net decrease in cash and cash equivalents		(23,889)		1,174
Cash and cash equivalents at beginning of period		1,102,007		653,463
Cash and cash equivalents at end of period		$     1,078,118		$       654,637

GENUINE PARTS COMPANY AND SUBSIDIARIESRE CONCILIATION OF GAAP NET INCOME TO ADJUSTED NET INCOME AND GAAP DILUTED NET INCOME PER COMMON SHARE TO ADJUSTED DILUTED NET INCOME PER COMMON SHARE (UNAUDITED)
		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2024		2023		2024		2023
GAAP net income		$                 226,582		$                 351,198		$                 771,020		$                 999,649
Adjustments:
Restructuring and other costs (1)		41,023		—		161,312		—
Acquisition and integration related costs and other (2)		4,273		—		29,051		—
Total adjustments		45,296		—		190,363		—
Tax impact of adjustments (3)		(8,865)		—		(45,911)		—
Adjusted net income		$                 263,013		$                 351,198		$                 915,472		$                 999,649
The table below represents amounts per common share assuming dilution:
		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)		2024		2023		2024		2023
GAAP diluted earnings per share		$                       1.62		$                       2.49		$                       5.51		$                       7.08
Adjustments:
Restructuring and other costs (1)		0.29		—		1.15		—
Acquisition and integration related costs and other (2)		0.03		—		0.22		—
Total adjustments		0.32		—		1.37		—
Tax impact of adjustments (3)		(0.06)		—		(0.33)		—
Adjusted diluted earnings per share		$                       1.88		$                       2.49		$                       6.55		$                       7.08
Weighted average common shares outstanding – assuming dilution		139,599		140,934		139,826		141,285

(1)	Amount reflects the global restructuring initiative which includes a voluntary retirement offer in the   U.S., inventory liquidation costs, and rationalization and optimization of certain distribution centers, stores and other facilities.
(2)	Amount primarily reflects ongoing acquisition and integration costs related to the acquisitions of MPEC in April 2024 and Walker in July 2024, including professional services costs, personnel costs, and lease and other exit costs.
(3)	We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments, including any related valuation allowances. For the three and nine months ended September 30, 2024, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a tax impact of $9 million and $46 million.

The table below clarifies where the items that have been adjusted above to improve comparability of the financial information from period to period are presented in the Condensed Consolidated Statements of Income.

		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2024		2023		2024		2023
Line item:
Cost of goods sold		$                —		$                —		$           7,487		$                —
Selling, administrative and other expenses		4,273		—		29,051		—
Restructuring and other costs		41,023		—		153,825		—
Total adjustments		$         45,296		$                —		$       190,363		$                —

GENUINE PARTS COMPANY AND SUBSIDIARIES CHANGE IN NET SALES SUMMARY (UNAUDITED)
		Three Months Ended September 30, 2024
		Comparable Sales		Acquisitions		Foreign Currency		Other		GAAP Total Net Sales
Automotive		0.2 %		4.4 %		0.5 %		(0.3) %		4.8 %
Industrial		(2.4) %		1.3 %		(0.1) %		— %		(1.2) %
Total Net Sales		(0.8) %		3.2 %		0.3 %		(0.2) %		2.5 %
		Nine Months Ended September 30, 2024
		Comparable Sales		Acquisitions		Foreign Currency		Other		GAAP Total Net Sales
Automotive		(0.1) %		3.4 %		0.1 %		(0.5) %		2.9 %
Industrial		(2.2) %		0.8 %		(0.1) %		— %		(1.5) %
Total Net Sales		(0.9) %		2.4 %		— %		(0.3) %		1.2 %

GENUINE PARTS COMPANY AND SUBSIDIARIESRE CONCILIATION OF GAAP NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW( UNAUDITED)
		Nine Months Ended September 30,
(in thousands)		2024		2023
Net cash provided by operating activities		$                        1,096,225		$                        1,082,446
Purchases of property, plant and equipment		(385,590)		(349,858)
Free Cash Flow		$                           710,635		$                           732,588
		For the Year Ending December 31, 2024
		Previous Outlook		Updated Outlook
Net cash provided by operating activities		$1.3 billion to $1.5 billion		$1.3 billion to $1.5 billion
Purchases of property, plant and equipment		~$500 million		~$500 million
Free Cash Flow		$800 million to $1.0 billion		$800 million to $1.0 billion