Motion’s 1Q Sales Fell 2.2% as Profits Rose

Genuine Parts Company reported its 2024 first quarter financial results on April 18, which showed a sequential shift to sales declines in its industrial parts business unit — which does business as Motion — following a long stretch of consistent year-over-year growth.

Industrial Parts

At GPC’s Industrial Parts unit, 1Q total sales of $2.21 billion were down 2.2% year-over-year, comprised of a 2.6% decrease in comparable sales and a -0.1% impact from foreign currency, partially offset by a 0.5% benefit from acquisitions. The overall sales decline followed gains of 2.1% in 4Q23; 0.6% in 3Q23 and 5.9% in 2Q23; and 11.9% gain in 1Q23.

Meanwhile, Industrial Parts segment profit of $271 million increased 3% year-over-year and profit margin of 12.3% improved 70 basis points. ($275M, 19.3% increase and 12.9% margin in 4Q23).

• GPC said the unit continued to see sales growth and strong renewal rates with corporate account customers, which represents about 45% of the business.
• On a geographic basis, Industrial Parts 1Q sales declined 2.4% year-over-year in North America and improved 4.7% in Australasia.
• “In Industrial, sales decreased low-single-digits, in-line with our expectations, as we were up against our most difficult comparative period for the year,” GPC President and COO Will Stengel said in the company’s financial release.

On MDM’s 2023 Top Distributors Lists, Motion was No. 2 for industrial supplies, No. 2 for MRO, No. 1 for power Transmission/bearings, No. 3 for fluid power and No. 2 for hose/hose accessories.

Premium: How Motion Found its North Star, and Where it’s Headed (Jan. 2024)

Automotive

At GPC’s Automotive Parts Group — which does business as NAPA Auto Parts — 1Q sales of $3.57 billion were up 1.9% year-over-year, comprised of a 2.8% benefit from acquisitions and a 0.2% increase in comparable sales, partially offset by a -1.1% impact from foreign currency and other. Segment profit of $273 million increased 3.2% year-over-year and profit margin of 7.6% increased 10 bps.

Overall

Overall, GPC had 1Q23 sales of $5.78 billion, up 0.3% year-over-year, comprised of a 1.9% benefit from acquisitions, partially offset by a 0.9% decrease in comparable sales and a -0.7% impact from foreign currency and other. Gross margin of 35.9% improved 100 bps, adjusted EBITDA of $517 million increased 2%, operating profit of $544 million increased 3% on margin of 9.4% that improved 30 bps. The company’s overall 1Q24 net profit of $249 million trailed the $304 million of a year earlier.

“Our performance in the quarter highlights the value of our business mix paired with our geographic diversity as our teams delivered profits that were ahead of our expectations,” GPC Chairman and CEO Paul Donahue said. “We did this by staying focused on both our near- and long-term strategic initiatives to improve our business and drive profitable growth.

2024 Outlook

In issuing its 2024 full-year guidance, GPC said it expects total sales growth of 3-5%, with Industrial growth of 3-5% and Automotive growth of 2-4% — each identical to its outlook issued after 4Q23.

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