Genuine Parts Company

GPC reported second-quarter sales of $6.5 billion, up approximately 6% year over year, and adjusted EPS of $2.15 versus $2.10 last year. Adjusted gross margin was 37.9%, up 20 basis points, while adjusted SG&A was 29.1% of sales, up 40 basis points. Segment EBITDA rose in all three businesses: Industrial EBITDA was $316 million, up about 10%; North America Automotive EBITDA was $208 million, up 6%; and International Automotive EBITDA was $150 million, up 6%. For 2026, the company reaffirmed adjusted diluted EPS guidance of $7.50-$8.00 and total sales growth of 3%-5.5%; it now expects reported diluted EPS of $5.90-$6.40. Management also said it expects $20 million-$30 million of incremental costs in the remainder of the year from the Iran conflict and still sees about $0.30 of 2026 depreciation and interest expense.

Will Stengel framed the quarter as strong execution in a difficult environment, highlighting disciplined operations, pricing/sourcing initiatives, and segment-level improvement. He emphasized that the company remains focused on the planned separation into two public companies in Q1 2027 and said the standalone audit is complete, with a confidential Form 10 filing expected later this summer. He also made clear that GPC is not currently in discussions with any competitor and said management is focused on maximizing shareholder value through the separation path.

Bert Nappier said the quarter exceeded expectations, with 6% sales growth and adjusted EPS up 2.5% versus last year. He cited $93 million of pre-tax non-recurring costs tied to restructuring and separation, or $69 million after tax, including $16 million of separation costs. On margins, he pointed to 37.9% adjusted gross margin, 29.1% adjusted SG&A, and 8.7% adjusted EBITDA margin, and noted year-to-date operating cash flow of $464 million, capex of $205 million, and dividends of $288 million. He also detailed 2026 guidance: adjusted EPS of $7.50-$8.00, reported EPS of $5.90-$6.40, sales growth of 3%-5.5%, and $225 million-$250 million of transformation costs with $100 million-$125 million of benefit.

Analysts focused on inflation, the cadence of demand, and what could unlock better performance at NAPA’s independent owners. Management said inflation is still running in low single digits overall, with higher freight and rent pressures from the Iran conflict, and July started in line with expectations rather than pointing to a dramatic change in trend. They also said the independent-owner base is a key opportunity and that GPC is applying a new playbook of analytics and tailored tools to help those owners improve sales, pricing, inventory, and operations.