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GENUINE PARTS CO (GPC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered modest top-line growth with $5.87B revenue (+1.4% YoY) and adjusted EPS of $1.75; both metrics were above Wall Street consensus, while GAAP EPS was $1.40 due to restructuring and integration costs . Estimates: EPS $1.68*, revenue $5.83B* — results were beats.
  • Gross margin expanded 120 bps to 37.1% on acquisitions and vendor rebates, offset by deleverage from softer organic demand and one less selling day; total adjusted EBITDA margin was 8.1%, down 80 bps YoY .
  • Management reaffirmed full-year 2025 guidance (sales +2% to +4%; adjusted EPS $7.75–$8.25; operating cash flow $1.2–$1.4B; FCF $0.8–$1.0B) and added segment guidance for 2025 (Automotive +2% to +4% with flat to +10 bps EBITDA margin; Industrial +2% to +4% with +20–40 bps EBITDA margin expansion) .
  • Call narrative focused on tariff uncertainty (impact immaterial in Q1), cost inflation in SG&A, and sequential improvement at Motion; NAPA tech upgrade (Google-partnered PROLink) is gaining traction with mid-single-digit B2B e-sales growth .
  • Potential stock catalysts: estimate beats and guidance reaffirmation despite tariff backdrop; visibility that H1 EPS down 15–20% and H2 EPS up 15–20% may frame investor expectations into 2H recovery scenarios .

What Went Well and What Went Wrong

What Went Well

  • Beat on adjusted EPS ($1.75 vs $1.68*) and revenue ($5.87B vs $5.83B*), with gross margin +120 bps YoY to 37.1% driven by acquisitions and vendor rebates .
  • Industrial segment showed sequential improvement with EBITDA margin at 12.7% (+10 bps YoY) and average daily sales positive in all three months .
  • Technology/customer execution: “modernized e-commerce platform, NAPA PROLink, built specifically for our commercial customers… Developed in partnership with Google… In 2025, NAPA B2B e-sales are growing mid-single digits and capturing new business” .

What Went Wrong

  • Organic softness: comparable sales down 0.8% overall; Automotive comps −0.8%, Industrial comps −0.7%; one less selling day pressured growth (−110 bps total) .
  • Adjusted EBITDA margin down 80 bps YoY (to 8.1%) on deleverage from lower organic sales, cost inflation, and fewer selling days .
  • SG&A pressure: adjusted SG&A rose +170 bps as % of sales; core SG&A up $40M with ~$45M from salaries and rent in a higher rate environment .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$5.97 $5.77 $5.87
Gross Profit ($USD Billions)$2.20 $2.07 $2.17
GAAP Diluted EPS ($)$1.62 $0.96 $1.40
Adjusted Diluted EPS ($)$1.88 $1.61 $1.75
Gross Margin (%)—36.9% (adjusted) 37.1%
Adjusted EBITDA Margin (%)——8.1%
Segment Net Sales ($USD Billions)Q3 2024Q4 2024Q1 2025
Automotive$3.80 $3.70 $3.66
Industrial$2.17 $2.10 $2.20
Segment EBITDA ($USD Millions)Q4 2024Q1 2025
Automotive EBITDA ($)$285,000 $285,507
Automotive EBITDA Margin (%)7.8% 7.8%
Industrial EBITDA ($)$271,000 $278,711
Industrial EBITDA Margin (%)12.9% 12.7%
Cash Flow and Balance SheetQ1 2025
Cash from Operations ($MM)$(40.8)
Free Cash Flow ($MM)$(160.7)
Capex ($MM)$119.8
Cash & Equivalents ($MM)$420.4
Short-term Borrowings ($MM)$813.9
Long-term Debt ($MM)$3,775.9
Estimate ComparisonQ3 2024Q4 2024Q1 2025
Revenue Actual ($MM)$5,970 $5,770 $5,866
Revenue Consensus ($MM)$5,948.7*$5,712.5*$5,828.0*
EPS Actual ($)$1.88 $1.61 $1.75
EPS Consensus ($)$2.43*$1.55*$1.68*
Beat/MissRev: Beat; EPS: MissRev: Beat; EPS: BeatRev: Beat; EPS: Beat

Values with an asterisk are retrieved from S&P Global.

KPIs and Mix (YoY, Q1 2025)TotalAutomotiveIndustrial
Comparable Sales Change (%)−0.8% −0.8% −0.7%
Acquisitions Contribution (pp)+3.0 +4.1 +1.3
FX Impact (pp)−1.5 −1.9 −1.0
Other (pp)+0.7 +1.1 0.0
Stores Acquired (Q1)44 ——

Guidance Changes

MetricPeriodPrevious Guidance (Feb 18, 2025)Current Guidance (Apr 22, 2025)Change
Total Sales Growth (%)FY 20252% to 4% 2% to 4% Maintained
Automotive Sales Growth (%)FY 20252% to 4% 2% to 4% Maintained
Industrial Sales Growth (%)FY 20252% to 4% 2% to 4% Maintained
Diluted EPS ($)FY 2025$6.95 to $7.45 $6.95 to $7.45 Maintained
Adjusted Diluted EPS ($)FY 2025$7.75 to $8.25 $7.75 to $8.25 Maintained
Effective Tax Rate (%)FY 2025~24% ~24% Maintained
Operating Cash Flow ($B)FY 2025$1.2–$1.4 $1.2–$1.4 Maintained
Free Cash Flow ($B)FY 2025$0.8–$1.0 $0.8–$1.0 Maintained
Automotive EBITDA MarginFY 2025N/AFlat to +10 bps YoY New detail
Industrial EBITDA MarginFY 2025N/A+20–40 bps YoY New detail
Dividend (annualized)FY 2025$4.12 per share (quarterly $1.03) $4.12 per share (ongoing) Maintained

Note: Outlook excludes potential tariff impacts and the one-time non-cash pension settlement charge (which would affect GAAP EPS but not adjusted EPS) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroRevised 2024 outlook on weak Europe/Industrial Tariff impact immaterial in Q1; guidance excludes tariff effects; scenarios outlined for H2 sensitivity Heightened uncertainty; cautious H1/H2 split
SG&A/Cost ActionsRestructuring initiative launched; charges in Q3/Q4 Adjusted SG&A +170 bps; ~$27M Q1 savings; 2025 restructuring costs $150–$180M; $100–$125M 2025 savings Ongoing execution; savings ramp
Industrial (Motion)Pressure through 2024; segment profit margin down Sequential improvement; ADS positive each month; EBITDA margin 12.7% (+10 bps) Stabilizing/improving sequentially
Automotive PerformanceQ3/Q4 comps modest; store acquisitions (MPEC/Walker) Global sales +2.5%; comps −0.8%; independent integration costs; regional color (US/Canada/Europe/APAC) Mixed; APAC strong; US retail softer
Technology InitiativesN/ANAPA PROLink (Google partnership) and catalog upgrade; mid-single-digit B2B e-sales growth Positive adoption, commercial traction
Pricing/Vendor RebatesN/AVendor price discussions typical for season; elevated activity; GM aided by vendor rebates Supports margins; evolving with tariffs

Management Commentary

  • “We had a solid start to 2025, despite the tariffs and trade dynamics that are impacting the operating landscape… We remain focused on what we can control—excellent customer service and our strategic initiatives to improve the business” — Will Stengel, CEO .
  • “Our gross margin was 37.1% in the first quarter, an increase of 120 basis points from last year… driven by acquisitions, along with some favorability in vendor rebates” — Bert Nappier, CFO .
  • “NAPA PROLink… Developed in partnership with Google… In 2025, NAPA B2B e-sales are growing mid-single digits and capturing new business” — Will Stengel .
  • “While certain new tariffs took effect during the quarter, the financial impact to GPC for Q1 was immaterial” — Bert Nappier .

Q&A Highlights

  • Tariffs and pricing: CFO detailed complexity (a SKU could face nine tariff permutations; unmitigated cost adder about 30% on that SKU), but emphasized mitigation levers and inability to generalize impacts; diversification reduces direct exposure (about 14% China; 70% purchases in U.S./Europe) .
  • Near-term outlook cadence: Company expects H1 adjusted earnings down 15–20% and H2 up 15–20%; April trends consistent with March, no deterioration despite tariff news .
  • Industrial demand: Sequential improvement at Motion across national accounts and local MRO; positive customer activity on capital-related projects; destocking possibly bottoming .
  • Independents and inventory: No widespread pull-forward; company assisting owners with analytics and stocking; U.S. company-owned stores performing slightly better than independents; regional strength in Midwest/Mid-Atlantic .
  • Vendor pricing: Seasonal price discussions active and more numerous given environment; Q1 tariff impact immaterial; active margin management continues .

Estimates Context

  • Q1 2025 actuals vs consensus: adjusted EPS $1.75 vs $1.68* (beat), revenue $5.87B vs $5.83B* (beat). EPS estimates based on 11 analysts; revenue estimates based on 11 analysts*.
  • Prior two quarters: Q4 2024 EPS $1.61 vs $1.55* (beat), revenue $5.77B vs $5.71B* (beat); Q3 2024 EPS $1.88 vs $2.43* (miss), revenue $5.97B vs $5.95B* (beat). Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 execution was resilient: gross margin expansion and dual beats on revenue/EPS despite softer organic comps and fewer selling days; adjusted EBITDA margin compression appears transitory given tariff immateriality and expected H2 recovery .
  • Reaffirmed FY25 guidance with added segment detail de-risks the outlook; watch for confirmation of H1/H2 EPS cadence and FX/tariff headlines as potential estimate revision drivers .
  • Industrial (Motion) is inflecting sequentially; segment EBITDA margin improved and ADS positive through the quarter — a key support for 2H narrative .
  • NAPA PROLink and catalog improvements are tangible commercial wins; continued store integrations (MPEC/Walker, 44 acquisitions in Q1) support mix and margin over time .
  • SG&A inflation remains a watch item, but restructuring savings are ramping ($27M benefit in Q1; $100–$125M in 2025; ~$200M annualized by 2026) — margin leverage opportunity as comps normalize .
  • Cash generation guidance intact (CFO $1.2–$1.4B; FCF $0.8–$1.0B) despite Q1 working capital use; dividend increase sustained, offering income support .
  • Trading lens: near-term, tariff headlines and FX could drive volatility; medium-term, confirmation of H2 acceleration and Industrial recovery are likely to re-rate the stock on improved margin/FCF trajectories .

Values with an asterisk are retrieved from S&P Global.