Genuine Parts Reports Q3 Sales Growth, Narrows 2026 EPS Guidance

Genuine Parts (NYSE: GPC ) reported third-quarter financial results on Tuesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Genuine Parts Company reported third-quarter 2026 sales of $6.5 billion, a 4% increase year-over-year, with gross margin expansion driven by strategic pricing and sourcing initiatives. Industrial sales grew by 6%, while North American Automotive sales increased by 2%, with notable pressures from cost inflation impacting profitability. The company is on track with its strategic initiative to separate into two standalone public companies by Q1 2027, expecting this move to enhance focus and flexibility.

Despite geopolitical uncertainties and inflationary pressures, the company maintains a robust strategic direction, with plans to invest in infrastructure and supply chain improvements. Future outlook remains cautiously optimistic, with adjusted EPS guidance for 2026 narrowed to $7.50 to $7.75, though affected by additional costs due to the Iran conflict. Full Transcript OPERATOR Ladies and gentlemen, and welcome to the Genuine Parts Company third quarter 2026 earnings conference call. At this time, all lines are in a listen-only mode.

Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, October 20, 2026. At this time, I would like to turn the conference call over to Tim Walsh, Vice President of Investor Relations.

Please go ahead, sir. Tim Walsh (Vice President of Investor Relations) Thank you, and good morning, everyone. Welcome to Genuine Parts Company's third quarter 2026 earnings call. Joining us on the call today are Will Stengel, Chairman and Chief Executive Officer, Court Carruthers, Chief Executive Officer-Elect, and Bert Nappier, Executive Vice President and Chief Financial Officer.

In addition to this morning's press release, a supplemental slide presentation can be found on the Investors page of the Genuine Parts Company website. Today's call is being webcast, and a replay will also be made available on the company's website. After the call, following our prepared remarks, the call will be open for questions, the responses to which will reflect management's views as of today, October 20, 2026. If we're unable to get to your questions, please contact our Investor Relations department.

Please be advised this call may include certain non-GAAP financial measures which may be referred to during today's discussion of our results as reported under Generally Accepted Accounting Principles. A reconciliation of these measures is provided in the earnings press release. Today's call may also involve forward-looking statements regarding the company and its businesses as defined in the Private Securities Litigation Reform Act of 1995. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest SEC filings, including this morning's press release.

The company assumes no obligation to update any forward-looking statements made during this call. With that, I'll turn it over to Will. Will Stengel (Chairman & CEO) Thank you, Tim. Good morning everyone and thank you for joining our third quarter 2026 earnings call.

I want to begin by recognizing our team members around the world for their exceptional teamwork and disciplined execution against a challenging macroeconomic backdrop. Our teams are managing the business well as we simultaneously advance the important work to create two standalone public companies. Our commitment to serving customers remains a daily priority and a key driver of our performance. This morning, I'll review our third quarter results by segment and share an update on the planned separation which remains on track for completion in the first quarter of 2027.

Following my remarks, you'll hear from Court on his early observations from his first six weeks and Bert will close with an update on our financial performance during the quarter and provide color on our outlook. We delivered a solid third quarter in line with our expectations, supported by focused execution across our businesses. While the global operating environment remains dynamic with geopolitical uncertainty in the Middle East, persistent cost inflation and a cautious consumer, our teams continue to be agile and operate the business with discipline.

Turning to our financial results, a few highlights for the third quarter include total Genuine Parts sales of 6.5 billion, an increase of over 250 million, up approximately 4% compared to the third quarter of 2025. Gross margin expansion of 70 basis points in line with our expectations, driven by strategic pricing and sourcing initiatives. Segment EBITDA in Industrial increased approximately 11% versus prior year to 13.2% of sales and adjusted earnings per share of $2.07, an increase of approximately 5% versus the same period last year.

Now turning to our results by business segment, total sales for Industrial were 2.4 billion, an increase of approximately 140 million or up 6% versus the same period in the prior year. With comparable sales up 5.5% during the quarter, the benefit from price inflation was approximately 2%. From a cadence perspective, all three months of the quarter were similar on an average daily sales basis, growing mid to high single digits versus last year, with September being the strongest month of the quarter. Motion delivered another strong quarter with continued growth across large corporate accounts, small to medium-sized local customers and its value-added solutions offerings.

We are encouraged by the industrial market backdrop and the current level of customer activity, including nine consecutive PMI readings over 50 and solid performance year to date. Following a prolonged period of industrial market contraction, deferred maintenance and delayed investments are beginning to be addressed by customers. We believe data center and AI infrastructure investment is also having a positive impact on the broader manufacturing economy. Looking at the performance across our diversified end markets, we saw growth in 12 of our 14 end markets we track, which is up from 11 in the second quarter and 7 in the same period of the prior year.

During the quarter we saw notable growth in equipment and machinery which was up high single digits. We also saw mid single digit to double digit growth in food products, iron and steel, automotive, fabricated metals, DC and logistics, oil and gas extraction and equipment rental and leasing. This growth was slightly offset by softer demand in lumber and wood and rubber and plastics.

Motion has the diversified scale, unique value proposition and one Motion invoice customer approach to differentiate itself from the competition in a highly fragmented market by solving customers' problems with technical, industry and technology expertise and becoming deeply familiar with and embedded in customers' operations. Motion delivers differentiated solutions that create customer loyalty and recurring profitable growth. An action bias and service culture across the Motion team is key to the success.

Our core break-fix MRO business, which accounts for approximately 80% of Motion sales, was up approximately 5% during the quarter, and the remaining 20% of Motion sales which originates from more capital-intensive projects was up nearly 10%. Larger customer orders and capital project activity were solid in the quarter. Industrial segment EBITDA in the third quarter was 317 million, up approximately 11% and 13.2% of sales, which represents a 60 basis point increase from the same period last year.

The strong results were driven by our multi-year sales effectiveness, pricing and sourcing initiatives combined with disciplined cost management as we continue to invest to support long-term growth. As we look ahead, we're encouraged by the momentum across Motion. Despite a dynamic environment, Motion is positioned well to benefit from attractive near and long-term industrial manufacturing trends. Core MRO demand remains healthy, capital-intensive project activity continues to strengthen and our strategic initiatives are delivering tangible benefits with exciting runway for continued performance.

We look forward to sharing more on the business, our initiatives, capital allocation priorities and financial outlook at Motion's Investor Day on December 9th. Moving now to our Automotive segments. In North America Automotive, total sales in the third quarter increased approximately 2%, with comparable sales also increasing approximately 2%. The team continues to execute against our strategic priorities while managing a cautious consumer backdrop and ongoing inflationary pressures, both of which have been impacted by the conflict in the Middle East.

During the quarter, North America Automotive segment EBITDA was 194 million, or 7.6% of sales. Our profit continues to benefit from our strategic initiatives, operating cost discipline and restructuring actions, which was more than offset by pressure from cost inflation in health care, rent and freight. Bert will share more on the specific impact of higher fuel costs in his comments. Within North America, total sales in the U.S.

were up approximately 1.5% for the quarter with comparable sales up approximately 2%. Price contribution was approximately 2.5%. From a cadence perspective, average daily sales were up low single digits in July and August and slightly positive in September. Consumers remain under pressure from higher fuel prices, persistent inflation and the recent interest rate increase.

Despite the softer environment, sales performance at our company-owned stores was solid in the third quarter. Comparable sales at our company-owned stores increased approximately 3.5% with commercial up approximately 5%. Independent same-store purchases were up slightly versus the same period of the prior year and have shown sequential improvement on a two-year stack. Through the year, we continue to execute company-owned store initiatives well and enhancements to our commercial segments like Major Accounts and AutoCare are building momentum.

We're also pleased with our independent owner initiatives, with our top quartile owners growing at comparable levels to our company-owned stores. We held sessions with hundreds of owners during the quarter and the tone is positive with good alignment on our go-forward priorities. Looking at the comparable sales performance of NAPA to the end customer, which includes our company-owned sales as well as the sales out to the end customer from our independent stores, the NAPA system delivered sales growth of approximately 3% in the third quarter.

By customer type, comparable sales to our commercial customers for the quarter were up approximately 4%, while comparable sales to our retail customers decreased approximately 3%. Within Commercial, we saw solid growth in all four customer segments with particular strength in other wholesale and fleet and government customers. We were pleased to go live on time and on budget with a new distribution center in Eastern Pennsylvania in the third quarter. This modern facility is the first of its kind in the NAPA network that's heavily automated with robotics to drive productivity and service in the local markets.

The operational metrics are on track and the NAPA supply chain team is building momentum with another planned building go-live in 2026 in Canada. Our team continues to execute well despite ongoing softer market conditions. We saw solid sales growth again in the third quarter with total sales increasing approximately 9% in local currency versus the same period last year and comparable sales up 1%. The Benson acquisition continues to support our performance with financial and operational results tracking ahead of plan.

Turning to our International Automotive business, total sales during the quarter increased 4.5% with comparable sales up approximately 1%. International Automotive segment EBITDA for the quarter was 141 million, up approximately 5% and 9.0% of sales, which is flat versus the same period last year. By geography in Europe, total sales for the quarter increased approximately 4% in local currency with comparable sales positive, up 1%. Our results improved slightly from the second quarter and continue the sequential improvement throughout 2026 with notable recent improvement in our business in the UK.

We feel confident our teams are continuing to perform better than the market driven by our initiatives with key account customers and the NAPA brand offering. Our investments in supply chain infrastructure are scaling as intended and driving meaningful cost efficiency and improved inventory productivity, positioning the business to deliver stronger performance as the market recovers. Lastly, our team in Asia Pacific had a solid quarter despite challenging market conditions driven by the ongoing conflict in Iran, five interest rate increases in nine months and low business and consumer confidence.

Despite these conditions, our teams continue to be focused and motivated and executing at a high level to win profitable market share as well as adding capabilities. Total sales in the third quarter increased approximately 2% in local currency with comparable sales up approximately 1%, which is similar to the second quarter, with trade business outperforming retail. Our two-wheel motorcycle business had another strong quarter with double-digit sales growth in local currency. Lastly, I want to provide an update on our announced plan to separate our Automotive and Industrial businesses into two independent public companies.

As mentioned, we remain on track for the separation planned for the first quarter of 2027. During the quarter we were pleased to announce the leaders who will guide both companies following the separation. The organization design solved for continuity to build on the business momentum and capabilities to ensure each business is prepared for its next chapter. The appointments reflect a thoughtful and deliberate process by our Board of Directors and position both companies to execute their distinct strategies and create long-term shareholder value.

Court Carruthers will serve as Chief Executive Officer of Genuine Parts supported by Bert as Chief Financial and Operating Officer. Court has deep relevant expertise to lead Genuine Parts and has served as a Genuine Parts Director for more than a year to learn and help guide the business. Not only does he have commercial expertise but he's a great culture fit with our teams. Day-to-day leadership of the operations will continue to be led by Elaine Moss in North America, Frank Bedwell in Europe and Rob Cameron in Australasia.

Jean Jacques Lafont, co-founder of the Genuine Parts European Automotive business and current Genuine Parts Director, will serve as non-executive Chairman. Together, this is a best-in-class global automotive team with expertise and momentum for the next chapter at Genuine Parts. I'm honored to lead Motion as Chairman and Chief Executive Officer following the separation alongside James Howe, President and Chief Operating Officer, Howard Yu, Chief Financial Officer, and the experienced and talented Motion leadership team.

The go-forward Motion executive team has over 300 years of cumulative industrial, product and customer experience and almost all go-forward Motion executives have no change to their existing Motion roles. We look forward to standing Motion up as a public company and are confident in our ability to do so with excellence. In addition to providing leadership clarity, we have continued to progress our work on the Form 10, capital structure and capital allocation priorities. Our operational separation work across people, systems and contracts also continues to track to plan and is in line with our previously disclosed cost estimates.

We have been active to recruit new directors and are pleased to share that information as we finalize our work. Similar to our management team, we have skilled director candidates that will add relevant expertise to the board. Overall, I'm really pleased with the separation progress to date and we remain focused on advancing the remaining work required to complete the separation in the first quarter of 2027. I'd like to especially thank all those, including our global PMO team, who are instrumental in executing this significant body of work.

In closing, we're encouraged by our performance year to date in a dynamic operating environment. Our teams are controlling what we can control, executing with discipline, serving our customers with excellence and advancing our strategic priorities that strengthen our market-leading positions across the globe. We have meaningful momentum, clear priorities and the right leadership in place to complete the separation and position both Genuine Parts and Motion to create long-term shareholder value. Thank you to our teammates around the world for your continued hard work and commitment.

I'll now turn the call over to Court. Court Carruthers (CEO-Elect) Thanks, Will, and good morning, everyone. I'm excited and honored to be stepping into the CEO role at Genuine Parts upon the separation of Motion early next year. I'm incredibly grateful for the warm welcome I've received across the global organization.

We have an exceptional and passionate team at Genuine Parts, and I'm proud to be part of it. Over my first six weeks in the role, I've spent time meeting with team members, connecting with independent owners, and experiencing our operations firsthand, visiting many stores and DCs.