Genuine Parts Company (GPC) Bundle
A Brief History of Genuine Parts Company
Genuine Parts Company (GPC), founded in 1928, has evolved into a leading distributor of automotive and industrial replacement parts. As of 2024, GPC operates over 3,000 locations across North America, Europe, and Asia. The company has built a robust portfolio through strategic acquisitions, enhancing its market presence and operational capabilities.
Financial Performance Overview
As of September 30, 2024, GPC reported significant fluctuations in its financial performance compared to the previous year. The key financial metrics for the nine months ended September 30, 2024, are as follows:
| Financial Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $771,020,000 | $999,649,000 | ($228,629,000) | (22.9%) |
| Diluted EPS | $5.51 | $7.08 | ($1.57) | (22.2%) |
| Total Revenue | $17,716,396,000 | $17,504,726,000 | $211,670,000 | 1.2% |
| Adjusted EBITDA | $1,562,615,000 | $1,634,649,000 | ($72,034,000) | (4.4%) |
Segment Performance
GPC's operations are divided into two primary segments: Automotive and Industrial. The performance of these segments for the nine months ended September 30, 2024, is detailed below:
| Segment | Net Sales (2024) | Net Sales (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Automotive | $11,100,000,000 | $10,800,000,000 | $300,000,000 | 2.9% |
| Industrial | $6,600,000,000 | $6,700,000,000 | ($100,000,000) | (1.5%) |
Operational Challenges
In 2024, GPC faced several operational challenges impacting its financial results. The company reported a decline in comparable sales, particularly in its Industrial segment, attributed to weak macroeconomic conditions and disruptions caused by natural disasters and technology outages. The total impact of such disruptions was estimated at 0.7% on comparable sales across both segments.
Strategic Initiatives
To counteract these challenges, GPC has focused on strategic acquisitions and enhancing its technological capabilities. In August 2024, GPC issued $750 million of unsecured senior notes to support these initiatives, aiming to improve its liquidity and expand its market reach.
Cash Flow and Liquidity Position
As of September 30, 2024, GPC reported a cash balance of $1.1 billion, a decrease from the prior year. The net cash provided by operating activities was $1.1 billion, while investing activities consumed $1.2 billion, primarily due to capital expenditures and acquisitions. The financing activities included $411 million in dividends paid and $112 million in stock repurchases.
| Cash Flow Statement (in thousands) | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,096,225 | $1,082,446 |
| Net Cash Used in Investing Activities | ($1,245,192) | ($473,429) |
| Net Cash Used in Financing Activities | ($124,828) | ($599,019) |
Overall, GPC continues to navigate a complex business environment while focusing on growth through strategic initiatives and operational efficiency.
A Who Owns Genuine Parts Company (GPC)
Ownership Structure
As of 2024, Genuine Parts Company (GPC) operates with a diverse ownership structure, primarily consisting of institutional investors, individual shareholders, and company executives. The largest shareholders include various investment firms and mutual funds that manage significant portions of GPC's outstanding shares.
Major Shareholders
The following table outlines the major shareholders of Genuine Parts Company as of 2024:
| Shareholder | Ownership (%) | Shares Owned | Type of Ownership |
|---|---|---|---|
| Vanguard Group | 8.5% | 11,838,000 | Institutional |
| BlackRock, Inc. | 8.2% | 11,500,000 | Institutional |
| State Street Corporation | 5.5% | 7,600,000 | Institutional |
| FMR LLC (Fidelity Investments) | 5.0% | 7,000,000 | Institutional |
| Invesco Ltd. | 4.3% | 6,000,000 | Institutional |
| Company Executives | 2.0% | 2,800,000 | Insider |
| Other Individual Shareholders | 66.5% | 93,300,000 | Retail |
Stock Performance
As of September 30, 2024, Genuine Parts Company had a market capitalization of approximately $55 billion. The stock price trends for GPC have shown fluctuations, with the stock trading between $75 and $90 per share throughout 2024. The stock's performance reflects the company's operational results, including net sales and net income figures.
Financial Overview
For the three months ending September 30, 2024, GPC reported:
- Net sales of $5.97 billion, a 2.5% increase year-over-year.
- Net income of $227 million, a decrease of 35.5% compared to the same period in 2023.
- Adjusted EBITDA of $477 million, down 15.6% from $565 million in the prior year.
For the nine months ending September 30, 2024, the financial highlights included:
- Net sales of $17.72 billion, a 1.2% increase year-over-year.
- Net income of $771 million, a decrease of 22.9% compared to the same period in 2023.
- Adjusted diluted earnings per share of $6.55, down from $7.08 in 2023.
Debt and Liquidity
As of September 30, 2024, GPC reported total debt of $4.6 billion, a decrease of 18.2% from the previous year. The company had a cash balance of $1.1 billion and total liquidity of approximately $2.6 billion, which includes available credit facilities.
GPC's effective interest rate on outstanding borrowings was approximately 3.49% as of September 30, 2024. The company is in compliance with all financial covenants related to its debt obligations.
Genuine Parts Company (GPC) Mission Statement
The mission statement of Genuine Parts Company (GPC) emphasizes their commitment to providing quality parts and exceptional service to customers in the automotive and industrial markets. As of 2024, GPC aims to deliver value through its extensive product offerings, innovative solutions, and a customer-centric approach.
Financial Overview
For the three months ended September 30, 2024, GPC reported the following financial highlights:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $5,970,198,000 | $5,824,602,000 | +2.5% |
| Net Income | $226,582,000 | $351,198,000 | -35.5% |
| Diluted EPS | $1.62 | $2.49 | -34.9% |
| Adjusted EBITDA | $476,743,000 | $564,747,000 | -15.6% |
Segment Performance
GPC operates primarily in two segments: Automotive and Industrial. The following table summarizes the performance of these segments for the nine months ended September 30, 2024:
| Segment | Net Sales | Segment Profit | Segment Margin |
|---|---|---|---|
| Automotive | $11,100,000,000 | $849,106,000 | 7.6% |
| Industrial | $6,600,000,000 | $806,433,000 | 12.2% |
Cost Structure
The operating expenses for GPC for the three months ended September 30, 2024 were as follows:
| Expense Type | Amount | Percentage of Sales |
|---|---|---|
| Selling, Administrative & Other Expenses | $1,722,400,000 | 28.8% |
| Depreciation & Amortization | $106,036,000 | 1.8% |
| Restructuring Costs | $41,023,000 | 0.7% |
Liquidity and Capital Resources
As of September 30, 2024, GPC's financial condition reflects a cash balance of:
| Financial Metric | Amount |
|---|---|
| Cash Balance | $1,100,000,000 |
| Total Debt | $4,600,000,000 |
| Total Liquidity | $2,600,000,000 |
For the nine months ended September 30, 2024, GPC had:
| Cash Flow Metric | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $1,096,225,000 |
| Net Cash Used in Investing Activities | ($1,245,192,000) |
| Net Cash Provided by Financing Activities | $124,828,000 |
Investment and Growth Initiatives
GPC has undertaken significant investments in technology and acquisitions in 2024, including:
- Acquisition of approximately 150 net new stores.
- Investment in technology to enhance pricing and analytics capabilities.
- Global restructuring initiative with costs of $161 million in the nine months ended September 30, 2024.
These initiatives align with GPC's mission to enhance operational efficiency and customer service.
How Genuine Parts Company (GPC) Works
Business Overview
Genuine Parts Company (GPC) operates as a distributor of automotive and industrial replacement parts. The company serves a diverse range of customers, including automotive repair shops, industrial manufacturers, and other businesses.
Financial Performance
As of September 30, 2024, GPC reported a net income of $771 million for the nine months ended, a decrease of 22.9% from $999 million in the same period of 2023. The diluted earnings per share (EPS) for this period was $5.51, down from $7.08 in 2023, representing a decrease of 22.2%.
Revenue and Sales Growth
For the three months ended September 30, 2024, GPC's net sales totaled $5.97 billion, reflecting a year-over-year increase of 2.5%. The automotive segment contributed $3.8 billion, an increase of 4.8%, while the industrial segment reported $2.2 billion, a decrease of 1.2%.
| Period | Net Sales (in billions) | Net Income (in millions) | EPS |
|---|---|---|---|
| Q3 2024 | $5.97 | $227 | $1.62 |
| Q3 2023 | $5.82 | $351 | $2.49 |
| 9M 2024 | $17.72 | $771 | $5.51 |
| 9M 2023 | $17.50 | $999 | $7.08 |
Cost Structure
GPC's cost of goods sold (COGS) for the three months ended September 30, 2024, was $3.77 billion, yielding a gross profit of $2.20 billion, with a gross margin of 36.8%. Selling, general, and administrative (SG&A) expenses amounted to $1.72 billion, representing 28.8% of sales.
Segment Performance
The automotive segment's profit for the three months ended September 30, 2024, was $262 million, while the industrial segment's profit was $259 million. The automotive segment margin decreased to 6.9%, and the industrial segment margin was reported at 11.9%.
| Segment | Q3 2024 Profit (in millions) | Q3 2023 Profit (in millions) | Q3 2024 Margin | Q3 2023 Margin |
|---|---|---|---|---|
| Automotive | $262 | $322 | 6.9% | 8.9% |
| Industrial | $259 | $283 | 11.9% | 12.9% |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, GPC generated $1.1 billion in net cash from operating activities, while utilizing $1.2 billion in investing activities, primarily for acquisitions and capital expenditures. The company ended the period with a cash balance of $1.1 billion.
Debt and Financing
As of September 30, 2024, GPC reported total debt of $4.6 billion, a decrease of $712 million from December 31, 2023. The company also had $2.6 billion in total liquidity, consisting of cash and available credit.
Market Challenges
GPC faced several challenges in 2024, including persistent inflation, particularly in personnel costs and rent, along with disruptions caused by Hurricanes Beryl and Helene and a technology outage.
How Genuine Parts Company (GPC) Makes Money
Overview of Revenue Streams
Genuine Parts Company (GPC) generates revenue primarily through two segments: Automotive and Industrial. The Automotive segment includes the distribution of automotive replacement parts, accessories, and service items. The Industrial segment encompasses the distribution of industrial parts and supplies.
Automotive Segment Performance
For the three months ended September 30, 2024, GPC's Automotive segment reported net sales of $3.8 billion, reflecting a 4.8% increase compared to the same quarter in 2023. This increase was driven by:
- A 4.4% benefit from acquisitions, specifically from acquired stores such as Motor Parts Equipment Corporation (MPEC) and Walker Automotive Supply, Inc.
- A 0.2% increase in comparable sales.
However, the segment faced challenges from persistent soft demand in the U.S. market and disruptions caused by Hurricanes Beryl and Helene, along with a technology outage impacting sales.
Industrial Segment Performance
In contrast, the Industrial segment experienced a net sales decrease for the three months ended September 30, 2024, reporting $2.2 billion, which is a 1.2% decline from the previous year. The decline is attributed to:
- A 2.4% decrease in comparable sales.
- A 0.1% unfavorable impact from foreign currency.
Financial Summary
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $5.97 billion | $5.82 billion | +2.5% |
| Net Income | $227 million | $351 million | -35.5% |
| Gross Profit | $2.20 billion | $2.11 billion | +4.2% |
| Operating Expenses | $1.88 billion | $1.64 billion | +14.1% |
| Adjusted EBITDA | $476 million | $565 million | -15.6% |
Cost Structure and Profit Margins
The gross margin for GPC improved to 36.8% in Q3 2024, up from 36.2% in Q3 2023, primarily due to the benefits from acquired stores. However, the operating expenses increased significantly, representing 31.4% of sales in Q3 2024 compared to 28.2% in the prior year, driven by:
- Increased personnel costs and rent inflation.
- Higher costs related to acquisitions and technology investments.
Debt and Financing Activities
As of September 30, 2024, GPC's total debt stood at $4.6 billion, a decrease of 18.2% from the start of the year. The company reported net cash provided by operating activities of $1.1 billion for the nine months ended September 30, 2024.
Dividends and Shareholder Returns
GPC declared a cash dividend of $3.00 per share for the nine months ended September 30, 2024, totaling approximately $418 million paid out to shareholders.
Conclusion of Financial Performance
In summary, GPC's revenue model is heavily reliant on its Automotive and Industrial segments. The company continues to face challenges from market conditions, but strategic acquisitions and operational efficiencies are integral to its financial performance.
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Article updated on 8 Nov 2024
Resources:
- Genuine Parts Company (GPC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Genuine Parts Company (GPC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Genuine Parts Company (GPC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.