Genuine Parts Company (NYSE: GPC), a leading global service provider of automotive and industrial replacement parts and value-added solutions, announced today its results for the fourth quarter and twelve months ended December 31, 2024.

"I would like to thank our global GPC teammates for their hard work and dedication to serving our customers throughout 2024," said Will Stengel, President and Chief Executive Officer. "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."

Fourth Quarter 2024 Results

Sales were $5.8 billion, a 3.3% increase compared to $5.6 billion in the same period of the prior year. The improvement is attributable to a 3.2% benefit from acquisitions, a net 0.6% favorable impact of foreign currency and other, partially offset by a 0.5% decrease in comparable sales. The fourth quarter included one additional selling day in the U.S. versus the same period of the prior year, which positively impacted sales growth by approximately 1.1%.

Gross profit was $2.1 billion, (or 35.9% of sales), an increase of 1.8% compared to gross profit of $2.0 billion (or 36.4% of sales) in the same period of the prior year. During the quarter, the company incurred a charge of $62 million to write down certain existing inventory associated with a new global rebranding and relaunch of a key tool and equipment offering. Adjusting for this charge, adjusted gross profit as a percentage of sales was 36.9%, an increase of 50 basis points from the same period of the prior year.

Net income was $133 million, or $0.96 per diluted earnings per share. This compares to net income of $317 million, or $2.26 per diluted share in the prior year period.

Adjusted net income was $224 million, or $1.61 per diluted earnings per share. Adjusted net income excludes a net expense of $91 million after tax adjustments, or $0.65 per diluted share, which relates to costs associated with the company's global restructuring initiative, the acquisition and integration of independent stores and a charge to write down certain existing inventory associated with a new global rebranding and relaunch of a key tool and equipment offering. This compares to net income of $317 million, or $2.26 per diluted share in the prior year period. Refer to the reconciliation of GAAP net income to adjusted net income and GAAP diluted earnings per share to adjusted diluted earnings per share for more information.

Fourth Quarter 2024 Segment Highlights

During the fourth quarter of 2024, the company changed its segment profit measure to segment earnings before interest, taxes, depreciation and amortization ("EBITDA"). The company believes that segment EBITDA and segment EBITDA margin are useful measures because they allow management, analysts, investors, and other interested parties to evaluate the profitability of the company's business operations before the effects of certain net expenses that directly arise from its capital investment decisions (depreciation, amortization), financing decisions (interest) and tax strategies (income taxes). In addition, EBITDA is a metric included in certain long-term incentive compensation plans.

Automotive Parts Group ("Automotive")

Global Automotive sales were $3.7 billion, up 6.1% from the same period in 2023, consisting of a 4.6% benefit from acquisitions, a 1.3% favorable impact of foreign currency and other and a 0.2% increase in comparable sales. The additional selling day in the U.S. positively impacted Global Automotive sales growth by approximately 0.9%. Segment EBITDA of $285 million decreased 6.2%, with segment EBITDA margin of 7.8%, down 100 basis points from the same period of the prior year.

Industrial Parts Group ("Industrial")

Industrial sales were $2.1 billion, down 1.2% from the same period in 2023, consisting of a 1.7% decrease in comparable sales and a 0.3% unfavorable impact of foreign currency, slightly offset by a 0.8% benefit from acquisitions. The additional selling day in the U.S. positively impacted Global Industrial sales growth by approximately 1.5%. Segment EBITDA of $271 million decreased 4.3% with segment EBITDA margin of 12.9%, down 40 basis points from the same period of the prior year.

Full-Year 2024 Results

Sales for the twelve months ended December 31, 2024 were $23.5 billion, up 1.7% from the same period in 2023. Net income for the twelve months was $904 million, or $6.47 per diluted share, compared to $9.33 per diluted share in 2023. Adjusted net income for 2024 was $1.1 billion, or $8.16 per diluted share, a decrease of 12.5% compared to $9.33 per diluted share in 2023.

Balance Sheet, Cash Flow and Capital Allocation

The company generated cash flow from operations of $1.3 billion for the twelve months of 2024. Net cash used in investing activities was $1.5 billion, including $1.1 billion for acquisitions and $567 million for capital expenditures. The company's investing activities also generated $122 million cash proceeds from the sale of property, plant and equipment. The company used $334 million in cash for financing activities, including $555 million used for quarterly dividends paid to shareholders, $150 million used for stock repurchases and $399 million of net proceeds from debt primarily from the August 7, 2024 Senior Notes offering. Free cash flow was $684 million for the twelve months ending December 31, 2024.

The company ended the quarter and year with $2.0 billion in total liquidity, consisting of $1.5 billion availability on the revolving credit facility and $480 million in cash and cash equivalents.

Dividend Declaration

The company's Board of Directors approved a 3% increase in its regular quarterly cash dividend for 2025. This increased the cash dividend payable to an annual rate of $4.12 per share from $4.00 per share in 2024. The quarterly cash dividend of $1.03 per share is payable April 2, 2025 to shareholders of record March 7, 2025. The company has paid a cash dividend every year since going public in 1948, and 2025 marks the 69th consecutive year of increased dividends paid to shareholders.

Global Restructuring 

In 2024, the company announced a global restructuring designed to better align the company's assets and further improve the efficiency of the business. Throughout 2024, the efforts progressed as planned, delivering cost savings at the high end of the company's expectations. During 2025, the company will expand its restructuring efforts and take additional cost actions. It expects to incur additional costs of approximately $150 million to $180 million in 2025, which will continue to be reported as a non-recurring expense. Through these efforts, the company expects to realize approximately $100 million to $125 million of additional savings in 2025. When fully annualized in 2026, the company expects 2024 and 2025 restructuring efforts and cost actions will deliver approximately $200 million of cost savings.

2025 Outlook

In consideration of several factors, the company is establishing full-year 2025 guidance. 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 establishing its guidance, which is outlined in the table below.

In addition, the outlook below does not include the previously announced one-time, non-cash charge the company expects to record when its U.S. pension plan termination settles (expected to occur in late 2025 or in early 2026). This one-time, non-cash charge is not included in the 2025 outlook due to the uncertainty regarding when the termination of the plan will ultimately settle. However, to the extent the one-time, non-cash charge is recognized in 2025, diluted earnings per share in the table below will be impacted. The one-time, non-cash charge will not impact adjusted diluted earnings per share. See footnote one below for additional information.