Genuine Parts Company, a global distributor of automotive and industrial replacement parts, announced its results for the second quarter, which ended June 30, 2023. GPC said sales were $5.9 billion, a 5.6% increase compared to $5.6 billion in the same period of the prior year. The growth in sales is attributable to a 4.9% increase in comparable sales and a 1.8% benefit from acquisitions, partially offset by a 1.1% net unfavorable impact of foreign currency and other, the company said.

“We are pleased to report another solid quarter, which includes record sales and double-digit adjusted earnings growth. Our second quarter performance, once again, highlights the value and benefit of our global automotive and industrial business mix and geographic diversity, which we believe are competitive advantages that differentiate GPC in the marketplace,” said Paul Donahue, chairman and CEO. “Our global team remains focused on the strategic initiatives we highlighted at our Investor Day in March, and we believe our One GPC Team approach is contributing to our strong financial performance. We want to thank all our GPC teammates for their hard work and continued dedication to serving our customers.”

The company reported its net income at $344 million for the quarter compared to $373 million in the prior year period. Compared to adjusted net income of $313 million for the same three-month period of the prior year, this year the company’s adjusted net income increased 10%.

Second Quarter 2023 Segment Highlights

• Global Automotive sales were $3.7 billion, up 5.4% from the same period in 2022, consisting of a 4.3% increase in comparable sales and a 2.6% benefit from acquisitions, net of a 1.5% unfavorable impact of foreign currency and other. Segment profit of $329 million increased 2.1%, with segment profit margin of 9.0% down 30 basis points from last year, the company reported.
• Industrial part sales were $2.3 billion, up 5.9% from the same period in 2022, and reflecting a 6% increase in comparable sales and a 0.6% benefit from acquisitions, slightly offset by a 0.7% unfavorable impact of foreign currency. Segment profit of $283 million increased 25.7%, with segment profit margin of 12.5% up 190 basis points from the same period of the prior year.

“Global Automotive sales continue to benefit from our global diversification, as our businesses outside the U.S. posted mid-single-digit to double-digit growth in local currency in the second quarter,” said Will Stengel, president and COO. “Our industrial sales growth was broad based, with all product categories and major industries served growing from the prior year, allowing the Industrial team to post its twelfth consecutive quarter of margin expansion. The global GPC team delivered a solid second quarter and our teams remain focused on the consistent execution of our strategic initiatives. We believe our investments in our people, customer solutions, technology, supply chain and emerging technology will continue to enhance our capabilities and leadership positions.”

Six Months 2023 Results

Sales for the six months ending in June 30, 2023 were $11.7 billion, up 7.2% from the same period in 2022. Net income for the six months was $648 million, or $4.58 per diluted share, an increase of 5.5% compared to $4.34 per diluted share in 2022. Net income of $648 million, or $4.58 per diluted share, compares to adjusted net income of $579 million, or adjusted diluted earnings per share of $4.06, in 2022, an increase of 12.8%, the company reported.

The company generated cash flow from operations of $457 million for the first six months of 2023. GPC said it used $226 million in cash for investing activities, including $205 million for capital expenditures and $106 million for acquisitions, net of $80 million in proceeds from the sale of its remaining investment in S.P. Richards and other investments. The company also used $358 million in cash for financing activities, including $260 million for quarterly dividends paid to shareholders and $135 million for stock repurchases. Free cash flow was $252 million for the first six months of 2023.

The company ended the quarter with $2 billion in total liquidity, consisting of $1.4 billion availability on the revolving credit facility and $530 million in cash and cash equivalents.

2023 Outlook

The company is updating full-year 2023 guidance previously provided in its earnings release on April 20. 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.