Genuine Parts Company reported its 2023 fourth quarter and full-year financial results on Feb. 15, showing continued modest — though accelerated — sales growth at industrial subsidiary Motion, alongside announcing a global restructuring actions.

Restructuring

GPC said it is introducing global restructuring designed to better align company assets and improve efficiencies. The initiative includes:

• A voluntary retirement offer in the U.S.
• Rationalization and optimization of certain distribution centers, stores and other facilities
• Expected incurred costs of about $100 million to $200 million in 2024, to be reported as a non-recurring expense
• Expected realized savings of about $20 million to $40 million in 2024, and about $45 million to $90 million annually

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

4Q Results

Industrial Parts: At GPC’s Industrial Parts business unit — which does business as Motion — 4Q23 sales totaled $2.1 billion, up 2.1% year-over-year, following growth of 0.6% in 3Q, 5.9% in 2Q and 11.9% in 1Q. GPC said Motion’s 4Q sales gain reflected a 1.2% increase in comparable sales, a 0.5% benefit from acquisitions and no currency translation impact. 

• North America 4Q23 sales grew 1.3% year-over-year, while Australasia sales grew 9.5%.
• Industrial segment profit of $275 million increased 19.3% year-over-year on margin of 12.9% that was up 190 basis points from a year earlier. It was the segment’s 14th consecutive quarter of margin expansion.
• GPC noted the Industrial segment’s continued progress with sales excellence, pricing, eCommerce and other initiatives that “are helping win profitable market share and improve profitability.”
• The company also noted the successful integration of the January 2022 acquisition of Kaman Distribution Group exceeded its “synergy target” by approximately $20 million, and one year ahead of schedule.

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.

Automotive: At GPC’s Automotive Parts Group — which does business as NAPA Auto Parts — 4Q sales totaled $3.5 billion, up 0.8% year-over-year. The overall result was driven by a 2.9% benefit from acquisitions and a 0.6% benefit from foreign currency, partially offset by a 2.7% decrease in comparable sales. 

• Automotive segment profit of $259 million fell 12.2% year-over-year on margin of 7.5% that was down 110 bps.

Overall: GPC had 4Q23 sales of $5.6 billion, up 1.1% year-over-year, driven by a 2.0% benefit from acquisitions and a 0.3% benefit from foreign currency, partially offset by a 1.2% decrease in comparable sales. Gross margin of 36.4% improved 70 bps year-over-year and EBITDA of $523 million increased 6%. 4Q23 operating profit was $534 million on margin of 9.6%, up 2.0% and 10 bps, respectively, from a year earlier.

GPC’s 4Q23 net profit was $317 million, up 25.8% year-over-year.

Full-Year 2023

Industrial Parts: Full-year sales of $8.8 billion increased 4.9% vs. 2022, with comparable sales up 4.8%. Segment profit of $1.1 billion jumped 24%, while segment margin of 12.5% increased 200 bps.

Automotive: Full-year sales of $14.2 billion increased 4.2% vs. 2022, with comparable sales up 2.1%. Segment profit of $1.2 billion slid 1%, while segment margin of 8.2% fell 50 bps.

Overall: GPC had full-year sales of $23.1 billion, up 4.5% vs. 2022. Gross margin of 35.9% improved 80 bps; EBITDA of $2.2 billion improved 8%; Segment profit of $2.3 billion increased 10%, while net profit of $1.32 billion increased 11.3%.

2024 Outlook

In 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%.