On February 18, 2025, Genuine Parts Co (GPC, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year of 2024. The company, a global leader in automotive and industrial replacement parts, reported a quarterly revenue of $5.8 billion, exceeding the analyst estimate of $5,714.68 million. However, the diluted earnings per share (EPS) of $0.96 fell short of the estimated $1.47. Adjusted diluted EPS was reported at $1.61, surpassing expectations.

Company Overview

Genuine Parts Co (GPC, Financial) operates in the aftermarket automotive and industrial products sectors, with approximately 60% of sales from automotive parts and 40% from industrial products. The company serves a vast network of 9,800 global retail locations, primarily under the Napa Auto Parts brand in the U.S., and operates the Motion banner for industrial products, catering to over 200,000 clients worldwide.

Performance and Challenges

Genuine Parts Co (GPC, Financial) faced macroeconomic challenges and softer end-market demand in 2024. Despite these hurdles, the company focused on strategic initiatives and operational management. The 3.3% increase in fourth-quarter sales compared to the previous year was driven by acquisitions and favorable foreign currency impacts, although comparable sales saw a slight decline.

Financial Achievements

For the full year 2024, Genuine Parts Co (GPC, Financial) reported sales of $23.5 billion, slightly above the annual estimate of $23,434.09 million. The company generated $1.3 billion in cash from operations and returned $705 million to shareholders through dividends and share repurchases. The adjusted diluted EPS for the year was $8.16, exceeding the estimated $7.43.

Income Statement Highlights

In the fourth quarter, Genuine Parts Co (GPC, Financial) reported a gross profit of $2.1 billion, representing 35.9% of sales. Adjusted gross profit margin improved to 36.9% after accounting for a $62 million inventory write-down related to a global rebranding initiative. Net income for the quarter was $133 million, with adjusted net income at $224 million.

Segment Performance

The Automotive Parts Group reported a 6.1% increase in sales to $3.7 billion, while the Industrial Parts Group saw a 1.2% decline to $2.1 billion. Segment EBITDA for Automotive decreased by 6.2%, and Industrial EBITDA fell by 4.3%, reflecting challenges in maintaining profitability amid changing market conditions.

Balance Sheet and Cash Flow

Genuine Parts Co (GPC, Financial) ended 2024 with $2.0 billion in total liquidity, including $1.5 billion available on its revolving credit facility. The company invested $1.5 billion in acquisitions and capital expenditures, generating $684 million in free cash flow.

Dividend and Outlook

The Board of Directors approved a 3% increase in the quarterly cash dividend for 2025, marking the 69th consecutive year of dividend growth. The company projects revenue growth of 2% to 4% for 2025, with adjusted diluted EPS expected to range between $7.75 and $8.25.

While the year presented challenges due to macroeconomic conditions and softer end-market demand, we remained focused on controlling what we could—advancing our strategic initiatives to strengthen the business and effectively managing our operations," said Will Stengel, President and CEO.

Analysis

Genuine Parts Co (GPC, Financial) demonstrated resilience in a challenging economic environment, achieving revenue growth through strategic acquisitions and currency benefits. The company's focus on operational efficiency and strategic initiatives positions it well for future growth, although maintaining profitability remains a challenge. The continued dividend growth underscores the company's commitment to returning value to shareholders.

Explore the complete 8-K earnings release (here) from Genuine Parts Co for further details.