Genuine Parts Company
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ITEM 1. BUSINESS.
Incorporated in the State of Georgia in 1928, Genuine Parts Company is a leading global service provider of automotive and industrial replacement parts and value-added solutions. We serve our customers from more than 10,800 locations, primarily in North America, Europe, and Australasia (primarily Australia and New Zealand). We offer outstanding service, an industry-leading assortment of replacement parts, extensive supply chain and distribution capabilities, and enhanced technology solutions.
As used in this report, "we," "us," "our," "GPC," and the “company” refers to GPC and its subsidiaries, except as otherwise indicated by the context; and the terms “automotive parts” and “industrial parts” refer to replacement parts in each respective category.
OUR BUSINESS
We operate in the automotive aftermarket and industrial parts distribution industries. We are a global company focused on being a preferred employer, supplier, and partner while delivering value to our shareholders. To achieve this, we prioritize excellent customer service, profitable growth, operational efficiency, and strong cash flow. In 2025, we had net sales of $24.3 billion, with revenues distributed approximately 74% in North America, 16% in Europe and 10% in Australasia.
We see attractive long-term growth potential across our markets. In the automotive aftermarket industry, growth is driven by increases in miles driven, a growing and aging vehicle fleet, rising complexity in vehicle technology, and expanding opportunities in electric and hybrid vehicles. In the industrial distribution industry, growth is supported by increased manufacturing activity across our diverse end markets, shifts in global supply chains, rising demand for automation and robotics, and an aging technical workforce. We are positioned competitively in attractive and fragmented industries that create value for shareholders.
Our competitive advantages include our strong brands, global footprint with leading positions in key markets, robust supply chain and distribution capabilities, and advanced technology solutions. Our financial strategy supports these advantages and includes strategic initiatives to grow revenue in excess of the market, improve operating margins, maintain a healthy balance sheet, generate strong cash flow, and allocate capital effectively.
PROPOSED SEPARATION OF AUTOMOTIVE AND INDUSTRIAL BUSINESS
On February 17, 2026, following a comprehensive strategic and operational review by our Board of Directors and management team, we announced our intention to separate the Company into two independent, publicly traded companies: one comprising our Automotive Parts Group (“Global Automotive”) and the other comprising our Industrial Parts Group (“Global Industrial”). The transaction is intended to qualify as a tax-free transaction for U.S. federal income tax purposes for the Company’s shareholders. The separation is targeted for completion in the first quarter of 2027, subject to certain customary conditions, including, among others, final approval by our Board of Directors, receipt of requisite regulatory clearances and compliance with applicable SEC requirements. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing. See Item 1A. “Risk Factors – Risks Related to the Proposed Separation – The proposed separation of our Automotive and Industrial businesses may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the separation, if completed, will achieve the intended financial, strategic and operational benefits.
OUR SEGMENTS
Effective December 31, 2025, we revised the aggregation of our operating segments to present three reportable segments: North America Automotive Parts Group (“North America Automotive”), International Automotive Parts Group (“International Automotive”), collectively "Automotive Parts Group" or "Global Automotive", and Industrial Parts Group (“Industrial” or "Global Industrial"). Financial information related to our reportable business segments is included in our Segment Data footnote in our Notes to Consolidated Financial Statements.
North America Automotive & International Automotive Segments
Business Overview
Our North America Automotive and International Automotive segments represent approximately 39% and 24% of total GPC net sales, respectively, and together they represent the largest global automotive network of parts and auto care. Our North America Automotive segment operates in the United States and Canada through our Napa Auto Parts (“NAPA”) subsidiaries, headquartered in Atlanta, Georgia, and UAP Inc., headquartered in Montreal, Canada. Our International Automotive segment operates in Europe and Australasia through our wholly-owned
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subsidiaries Alliance Automotive Group (“AAG”), headquartered in London, England, and GPC Asia Pacific, headquartered in Melbourne, Australia.
Through these two Automotive segments, we distribute automotive replacement parts, accessories, tools, equipment, and related solutions that help keep a wide range of vehicles running safely and efficiently. Together, these segments serve over one million customer locations including repair shops, dealerships, fleet operators, and retail consumers by delivering extensive product offerings with speed and reliability. Most orders are fulfilled quickly from well-stocked inventories, reducing vehicle downtime for our end customers.
We serve two primary customer types:
•Do-It-For-Me (DIFM): commercial customers including independent and national repair centers, dealerships, service stations, and public and private fleets.
•Do-It-Yourself (DIY): retail customers who shop through company-owned and independently-owned stores as well as digital platforms.
Our DIFM and DIY customers represent approximately 80% and 20%, respectively, of sales in the aggregate across our two Automotive segments.
Our Global Automotive network serves over one million commercial customer locations. We have a diverse commercial customer base with no specific customer type representing an outsized concentration of our overall business. Our network operates in large and fragmented markets with a combined total addressable market estimated to be over $200 billion. The majority of the automotive aftermarket is comprised of small, local competitors and our brands, scale, advanced technology, and distribution network and capabilities differentiate us from our competitors.
Our Products and Services
Inventory availability drives our success, and our teams use data and analytics designed to ensure that the right parts are available in the right locations at the right time. In North America, most products are distributed under the NAPA brand, which serves as a key competitive advantage. In Europe and Australasia, we offer a diverse range of brands, including NAPA, Repco and many other national brands. Our U.S. Automotive business offers over one million parts sourced from hundreds of suppliers, with approximately 55% of the 2025 U.S. Automotive inventory purchased from 10 major suppliers. Overall, our Global Automotive portfolio includes parts, accessories, tools, and equipment that cover nearly all vehicle types from passenger cars and trucks, including hybrids and electric vehicles, to motorcycles, buses, farm machinery, and heavy-duty equipment.
Key product categories include:
•Replacement parts such as brakes, batteries, filters, engine components, and fluids
•Accessories and specialty equipment for both automotive and heavy-duty vehicles
•Tools and diagnostic devices for repair and maintenance
•Paint, body care, and collision repair supplies (in select markets)
We believe we create value for our customers through:
•Advanced inventory management using data analytics to ensure product availability where it’s needed most
•Extensive distribution networks combined with omni-channel digital platforms for fast, reliable delivery
•Technical expertise and training programs that support customers and independent stores alike
•Programs such as the NAPA Auto Care network, which provide branding support, increased visibility, and supply benefits for independent repair centers
•Specialized services offered at select locations, including paint mixing, battery testing, hydraulic hose assembly, and key cutting
Together, these products and services enable us to meet the evolving needs of the global automotive aftermarket, helping keep vehicles running smoothly and minimizing downtime for our customers.
NAPA
We are the sole member of the National Automotive Parts Association, LLC, a voluntary group established in 1925 to promote the distribution of automotive parts. We distribute certain automotive products under the federally registered NAPA® brand, which is used in many of our distribution centers and stores across the U.S., Canada,
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Europe, and Australia. While we promote NAPA lines, we are not obligated to purchase specific quantities and may also source competitive products from various suppliers.
We fund NAPA’s advertising to build brand recognition and support product promotion.
Additionally, we comply with a consent decree, entered by the Federal District Court in Detroit, Michigan, on May 4, 1954 that prohibits certain anticompetitive practices, including exclusive manufacturer agreements, territorial restrictions, price fixing, and uniform policies regarding customer selection among former NAPA members.
Global Operations and Distribution
Our extensive logistics and distribution network supports nearly 10,000 company-owned and independently-owned stores worldwide. We have distribution centers strategically located around the globe to support our extensive store network. Our stores are positioned close to key commercial customers, primarily repair shops and auto care centers, enabling frequent deliveries and efficient order fulfillment.
The NAPA brand is integral to our North America and International operations, serving as a symbol of quality and reliability. Our Automotive segments continue to invest in digital sales platforms and omni-channel service capabilities to meet evolving customer preferences. Additionally, we are committed to sustainable business practices, including the distribution of recycled automotive parts through our Back2Car program in Europe, and ongoing innovation to support the growing electric and hybrid vehicle markets globally.
North America Automotive
Our North America Automotive segment represents approximately 39% of total net GPC sales. We serve our customers through 6,864 locations across the U.S. and Canada, with a mix of approximately 35% company-owned and 65% independently-owned stores. We serve customers through a broad network of stores, heavy vehicle outlets, and specialty paint and body care locations. Most products in North America are distributed under the trusted NAPA brand. Our heavy vehicle business operates under banners such as Traction, TruckPro, TW, and Cadel. In Canada, we operate specialty stores that provide paint and body care equipment under the NAPA/CMAX brand, as well as high-quality parts and lubricants for imported vehicles through the Altrom and Auto-Camping banners.
Independent stores operate under their own management but benefit from our distribution network, industry-leading assortment of replacement parts, marketing, and technical support. Our strategic acquisitions in recent years have increased our company-owned store count in key, priority markets to enhance operational synergies and growth potential.
The following table details the number of distribution centers, company-owned stores and independently-owned stores as of December 31, 2025.
| North America | |||||||
| Distribution centers | 76 | ||||||
| Company-owned stores | 2,471 | ||||||
| Independently-owned stores | 4,317 | ||||||
| Total locations | 6,864 | ||||||
Additionally, our repair center network includes over 20,000 locations across North America through programs like our independent NAPA Auto Care program. These programs offer affiliated repair shops brand recognition, purchasing power, and access to advanced technology, all while allowing them to maintain independent ownership and operation.
International Automotive
Our International Automotive segment operates in Europe and Australasia and represents approximately 24% of total net sales.
Our operations in Europe, managed through AAG, serve thousands of repair shops and collision centers through over 2,500 outlets supported by national and regional distribution centers. Our distribution network includes company-owned and independent affiliate stores and outlets, heavy vehicle outlets, and online and specialty outlets. We operate under numerous well-established local banners across Europe, such as:
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results for the year ended December 31, 2026.
Forward-Looking Statements
Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission (“SEC”), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as “expect,” “likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,” “should,” “position,” “will,” “project,” “intend,” “plan,” “on track,” “anticipate,” “to come,” “may,” “possible,” “assume,” or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year and our expectations regarding our ability to capitalize on these business and economic trends and our ability to successfully execute our strategic priorities, including our anticipated separation of Global Automotive and Global Industrial into two independent, publicly traded companies. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including persistent inflation (including the direct and indirect impact of tariffs and retaliatory tariffs) or deflation, geopolitical uncertainty and unrest (including from the conflict involving the United States and Iran) and declining consumer confidence; our ability to successfully implement the separation of Global Automotive and Global Industrial and achieve the anticipated benefits of such transaction; volatility in oil prices; significant costs, such as elevated fuel and freight expenses; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our three business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to global trade regulations, environmental and social policy, infrastructure programs and privacy legislation and related uncertainties, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in its disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; disruptions caused by a failure or breach of our information systems; the success of our global restructuring efforts and the annualized cost savings arising therefrom, as well as other risks and uncertainties discussed in our 2025 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.
Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.
Overview
Genuine Parts Company ("GPC") is a leading global service provider of automotive and industrial replacement parts and value-added solutions. We have a long history of growth and innovation dating back to our founding in Atlanta, Georgia, in 1928. Over nearly a century, we’ve built a reputation for delivering excellent customer service, profitable growth and strong cash flow generation.
For the six months ended June 30, 2026, we conducted business in North America, Europe and Australasia from more than 10,800 locations. Our Automotive businesses operated in the U.S., Canada, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand and accounted for 63% of total revenues for the six months ended June 30, 2026. Our Industrial business operated in the U.S.,
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Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues during this period.
We are focused on being the preferred employer, supplier, and partner while delivering value to our shareholders. This focus drives our strategic financial objectives which are growing revenue in excess of the market, improving operating margins, maintaining a healthy balance sheet, generating strong cash flows, and allocating capital effectively. As we look to the future, we are leaning into modernizing our supply chain and technology through digital innovation, and data-driven strategies to enhance our competitive edge. By optimizing supply chains and leveraging technology, we are empowering our teams with cutting-edge tools to continue our focus on delivering exceptional customer service and driving sustainable growth. At the heart of it all is our commitment to excellence, supported by a culture of continuous improvement and a legacy of strong leadership that has guided us for nearly a century.
Proposed Separation of Automotive and Industrial Businesses
On February 17, 2026, we announced our intention to separate the Company into two independent, publicly traded companies: one comprising our Automotive Parts Group (“Global Automotive”) and the other comprising our Industrial Parts Group (“Global Industrial”). The separation is targeted for completion in the first quarter of 2027, subject to certain customary and regulatory conditions.
Key Performance Indicators
We consider a variety of performance and financial measures in assessing our business, and the key performance indicators used to measure our results are Comparable Sales, Gross Profit and Gross Margin, Selling, Administrative and Other Expenses ("SG&A"), Segment EBITDA and Segment EBITDA Margin, and Net Income and EBITDA along with their adjusted measures. For more information regarding our key performance indicators please reference the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Trends Affecting our Business
We are navigating through several external factors that create uncertainty and volatility in our operating results. These factors, and any changes to these factors, among others, could have a material adverse impact on customer behavior and our future operating results. For additional discussion regarding these external factors and other risks, refer to Risk Factors in Item 1A of Part I within our Annual Report on Form 10-K for the year ended December 31, 2025.
Middle East Geopolitical Developments
We are closely monitoring geopolitical tensions in the Middle East, including the ongoing conflict involving the United States and Iran, and related regional instability. The conflict has and could continue to lead to significant disruption of fuel and energy supplies and increases in global fuel prices, heightened inflationary pressures, disruptions in global supply chains and adverse impacts on customer spending patterns. While we have no operations in the Middle East, the increase in fuel and related supply chain costs attributable to the conflict together with their effects on customer spending negatively impacted income before income taxes by approximately $20 million during the three months ended June 30, 2026, primarily in our International Automotive segment. We continue to evaluate and take actions to mitigate any impacts on our business, results of operations and financial condition. The long-term effects of the conflict remain uncertain.
Tariffs and Other Trade Policy Matters
We continue to monitor the global trade environment, including tariffs on merchandise inventories sourced directly or indirectly from several countries, such as China, Canada, and Mexico, and their impact on our operations. During the six months ended June 30, 2026, tariffs continued to drive higher product costs and customer pricing, impacting our gross margin and SG&A expenses. We continue to manage these challenges through strategic pricing and sourcing initiatives, leveraging global supplier relationships and technology tools.
On February 20, 2026, the U.S. Supreme Court issued a decision invalidating certain tariffs imposed under the International Emergency Economic Powers Act. The financial impact of this ruling remains subject to ongoing administrative processes, including the extent and timing of refunds from U.S. Customs and Border Protection ("CBP"). Our exposure as the importer of record represents less than 0.5% of our total purchases. During the second quarter of 2026, we submitted refund claims related to these tariffs. The claims submitted and refunds received through June 30, 2026 were not material to our condensed consolidated financial statements. While we continue to take steps to manage tariff-related cost pressures, these actions may not fully offset increased costs in future periods.
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Results of Operations
Our second quarter performance continued to reflect solid sales across our business segments and benefits from our global restructuring initiatives, despite a challenging operating environment. Net sales increased 6.0%, with comparable sales growth across all segments, along with contributions from acquisitions and foreign currency. Additionally, comparable sales growth sequentially improved from the first quarter across all segments. During the second quarter, we incurred additional restructuring and other costs and costs associated with our separation, which contributed to a 10.7% decline in net income. Excluding these items, adjusted net income increased 1.5%, driven by higher gross profit from increased sales, pricing and sourcing initiatives, and benefits from our global restructuring program.
Our results of operations are summarized below for the three and six months ended June 30, 2026 and 2025.
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands) | $ | % of Sales | $ | % of Sales | $ Change | % Change | |||||||||||||||||||||||||||||
| Net sales | $ | 6,536,951 | 100.0 | % | $ | 6,164,425 | 100.0 | % | $ | 372,526 | 6.0 | % | |||||||||||||||||||||||
| Cost of goods sold | 4,066,244 | 62.2 | % | 3,840,037 | 62.3 | % | 226,207 | 5.9 | % | ||||||||||||||||||||||||||
| Gross profit | 2,470,707 | 37.8 | % | 2,324,388 | 37.7 | % | 146,319 | 6.3 | % | ||||||||||||||||||||||||||
| Operating expense: | |||||||||||||||||||||||||||||||||||
| Selling, administrative and other expenses | 1,917,508 | 29.3 | % | 1,771,195 | 28.7 | % | 146,313 | 8.3 | % | ||||||||||||||||||||||||||
| Depreciation and amortization | 134,716 | 2.1 | % | 123,018 | 2.0 | % | 11,698 | 9.5 | % | ||||||||||||||||||||||||||
| Provision for doubtful accounts | 10,998 | 0.2 | % | 7,625 | 0.1 | % | 3,373 | 44.2 | % | ||||||||||||||||||||||||||
| Restructuring and other costs | 71,149 | 1.1 | % | 45,712 | 0.7 | % | 25,437 | 55.6 | % | ||||||||||||||||||||||||||
| Total operating expense | 2,134,371 | 32.7 | % | 1,947,550 | 31.6 | % | 186,821 | 9.6 | % | ||||||||||||||||||||||||||
| Non-operating (income) expense: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | 45,800 | 0.7 | % | 40,211 | 0.7 | % | 5,589 | 13.9 | % | ||||||||||||||||||||||||||
| Other | (3,294) | (0.1) | % | (1,930) | — | % | (1,364) | 70.7 | % | ||||||||||||||||||||||||||
| Total non-operating expense | 42,506 | 0.7 | % | 38,281 | 0.6 | % | 4,225 | 11.0 | % | ||||||||||||||||||||||||||
| Income before income taxes | 293,830 | 4.5 | % | 338,557 | 5.5 | % | (44,727) | (13.2) | % | ||||||||||||||||||||||||||
| Income taxes | 66,272 | 1.0 | % | 83,677 | 1.4 | % | (17,405) | (20.8) | % | ||||||||||||||||||||||||||
| Net income | $ | 227,558 | 3.5 | % | $ | 254,880 | 4.1 | % | $ | (27,322) | (10.7) | % | |||||||||||||||||||||||
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| Three Months Ended June 30, | |||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Diluted EPS | $ | 1.65 | $ | 1.83 | $ | (0.18) | (9.8) | % | |||||||||||||||
| Adjusted diluted EPS | $ | 2.15 | $ | 2.10 | $ | 0.05 | 2.4 | % | |||||||||||||||
| North America Automotive segment EBITDA | $ | 208,328 | $ | 196,500 | $ | 11,828 | 6.0 | % | |||||||||||||||
| International Automotive segment EBITDA | $ | 149,991 | $ | 141,492 | $ | 8,499 | 6.0 | % | |||||||||||||||
| Industrial segment EBITDA | $ | 316,447 | $ | 288,138 | $ | 28,309 | 9.8 | % | |||||||||||||||
| Corporate EBITDA | $ | (107,813) | $ | (78,632) | $ | (29,181) | 37.1 | % | |||||||||||||||
| Total adjusted EBITDA | $ | 566,953 | $ | 547,498 | $ | 19,455 | 3.6 | % | |||||||||||||||
| North America Automotive segment EBITDA margin | 8.2 | % | 8.0 | % | |||||||||||||||||||
| International Automotive segment EBITDA margin | 9.4 | % | 9.6 | % | |||||||||||||||||||
| Industrial segment EBITDA margin | 13.1 | % | 12.8 | % | |||||||||||||||||||
| Corporate EBITDA margin | (1.6) | % | (1.3) | % | |||||||||||||||||||
| Total adjusted EBITDA margin | 8.7 | % | 8.9 | % | |||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands) | $ | % of Sales | $ | % of Sales | $ Change | % Change | |||||||||||||||||||||||||||||
| Net sales | $ | 12,801,891 | 100.0 | % | $ | 12,030,494 | 100.0 | % | $ | 771,397 | 6.4 | % | |||||||||||||||||||||||
| Cost of goods sold | 7,992,220 | 62.4 | % | 7,532,422 | 62.6 | % | 459,798 | 6.1 | % | ||||||||||||||||||||||||||
| Gross profit | 4,809,671 | 37.6 | % | 4,498,072 | 37.4 | % | 311,599 | 6.9 | % | ||||||||||||||||||||||||||
| Operating expense: | |||||||||||||||||||||||||||||||||||
| Selling, administrative and other expenses | 3,774,338 | 29.5 | % | 3,480,874 | 28.9 | % | 293,464 | 8.4 | % | ||||||||||||||||||||||||||
| Depreciation and amortization | 265,744 | 2.1 | % | 238,453 | 2.0 | % | 27,291 | 11.4 | % | ||||||||||||||||||||||||||
| Provision for doubtful accounts | 18,101 | 0.1 | % | 13,480 | 0.1 | % | 4,621 | 34.3 | % | ||||||||||||||||||||||||||
| Restructuring and other costs | 128,881 | 1.0 | % | 100,482 | 0.8 | % | 28,399 | 28.3 | % | ||||||||||||||||||||||||||
| Total operating expense | 4,187,064 | 32.7 | % | 3,833,289 | 31.9 | % | 353,775 | 9.2 | % | ||||||||||||||||||||||||||
| Non-operating (income) expense: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | 89,753 | 0.7 | % | 77,427 | 0.6 | % | 12,326 | 15.9 | % | ||||||||||||||||||||||||||
| Other | (6,369) | — | % | (2,838) | — | % | (3,531) | 124.4 | % | ||||||||||||||||||||||||||
| Total non-operating expense | 83,384 | 0.7 | % | 74,589 | 0.6 | % | 8,795 | 11.8 | % | ||||||||||||||||||||||||||
| Income before income taxes | 539,223 | 4.2 | % | 590,194 | 4.9 | % | (50,971) | (8.6) | % | ||||||||||||||||||||||||||
| Income taxes | 123,130 | 1.0 | % | 140,922 | 1.2 | % | (17,792) | (12.6) | % | ||||||||||||||||||||||||||
| Net income | $ | 416,093 | 3.3 | % | $ | 449,272 | 3.7 | % | $ | (33,179) | (7.4) | % | |||||||||||||||||||||||
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| Six Months Ended June 30, | |||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Diluted EPS | $ | 3.01 | $ | 3.23 | $ | (0.22) | (6.8) | % | |||||||||||||||
| Adjusted diluted EPS | $ | 3.92 | $ | 3.84 | $ | 0.08 | 2.1 | % | |||||||||||||||
| North America Automotive segment EBITDA | $ | 364,533 | $ | 343,495 | $ | 21,038 | 6.1 | % | |||||||||||||||
| International Automotive segment EBITDA | $ | 294,836 | $ | 280,004 | $ | 14,832 | 5.3 | % | |||||||||||||||
| Industrial segment EBITDA | $ | 630,567 | $ | 566,849 | $ | 63,718 | 11.2 | % | |||||||||||||||
| Corporate EBITDA | $ | (227,338) | $ | (169,757) | $ | (57,581) | 33.9 | % | |||||||||||||||
| Total adjusted EBITDA | $ | 1,062,598 | $ | 1,020,591 | $ | 42,007 | 4.1 | % | |||||||||||||||
| North America Automotive segment EBITDA margin | 7.4 | % | 7.3 | % | |||||||||||||||||||
| International Automotive segment EBITDA margin | 9.3 | % | 9.8 | % | |||||||||||||||||||
| Industrial segment EBITDA margin | 13.3 | % | 12.7 | % | |||||||||||||||||||
| Corporate EBITDA margin | (1.8) | % | (1.4) | % | |||||||||||||||||||
| Total adjusted EBITDA margin | 8.3 | % | 8.5 | % | |||||||||||||||||||
Net Sales
For the three months ended June 30, 2026, net sales increased 6.0% compared to 2025. The increase was driven by a 3.4% increase in comparable sales, a 1.4% benefit from favorable impact of foreign currency and other, and a 1.2% benefit from acquisitions.
For the six months ended June 30, 2026, net sales increased 6.4% compared to 2025. We experienced a 2.9% increase in comparable sales, a 2.3% benefit from favorable impact of foreign currency and other, and a 1.2% benefit from acquisitions.
Our comparable sales growth in both periods reflected pricing benefits and gains from our strategic initiatives. We estimate that comparable sales for both periods benefited from approximately 2.5% of price inflation, including tariff related impacts.
North America Automotive
Net sales for the three months ended June 30, 2026, for North America Automotive were $2.5 billion, an increase of 3.8% from 2025. The increase is primarily attributable to a 2.6% increase in comparable sales and a 1.3% increase from acquisitions.
Net sales for the six months ended June 30, 2026, for North America Automotive were $4.9 billion, an increase of $191 million from 2025. The increase is primarily attributable to a 2.4% increase in comparable sales, a 1.4% increase from acquisitions and a 0.3% favorable impact from foreign currency and other.
Our sales growth within North America Automotive reflected favorable execution in company-owned operations and strong contributions from our stores that were acquired over the last twelve months, which enhanced our ability to reach and serve our customers.
International Automotive
Net sales for the three months ended June 30, 2026 for International Automotive were $1.6 billion, an increase of 8.2% from 2025. The increase is attributable to a 4.9% favorable foreign exchange impact, a 2.7% increase from acquisitions and a 0.6% increase in comparable sales.
Net sales for the six months ended June 30, 2026 for International Automotive were $3.2 billion, an increase of 10.7% from 2025. The increase is attributable to a 7.8% favorable foreign exchange impact, a 2.5% increase from acquisitions and a 0.4% increase in comparable sales.
Industrial
Net sales for the three months ended June 30, 2026 for Industrial were $2.4 billion, an increase of 7.1% compared to 2025. The increase in sales primarily reflects a 6.1% increase in comparable sales and a 0.8% favorable impact from foreign currency.
Net sales for the six months ended June 30, 2026 for Industrial were $4.7 billion, an increase of 6.2% compared to 2025. The increase in sales primarily reflects a 5.0% increase in comparable sales and a 1.0% favorable impact from foreign currency.
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During the second quarter of 2026, economic activity in the U.S. manufacturing sector, measured by PMI, marked its strongest monthly expansions since May 2022, supporting sales demand in our Industrial segment.
Gross Profit and Gross Margin
Gross profit increased $146 million, or 6.3%, with gross margin increasing approximately 10 basis points to 37.8% during the three months ended June 30, 2026, compared to the same prior year period. Gross profit increased $312 million, or 6.9%, with gross margin increasing approximately 20 basis points to 37.6% during the six months ended June 30, 2026, compared to the same prior year period. The increases in gross profit are primarily driven by increased sales, and our margin expansion reflects our ongoing pricing and sourcing initiatives, partially offset by the impact of tariffs and Middle East conflict-driven inflation in product costs.
Selling, Administrative and Other Expenses
SG&A expenses increased $146 million, or 8.3%, during the three months ended June 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 60 basis points.
SG&A expenses increased $293 million, or 8.4%, during the six months ended June 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 60 basis points.
SG&A expenses increased in both periods primarily due to higher salaries and wages, freight, healthcare, rent, and IT costs, as well as additional operating expenses associated with recent acquisitions. In addition, SG&A expenses increased due to foreign currency exchange impacts of approximately $30 million and $100 million for the three and six months ended June 30, 2026, respectively. We also incurred costs of $16 million and $34 million related to the planned separation of our Global Automotive and Global Industrial businesses for the three and six months ended June 30, 2026, respectively. Our global restructuring initiatives provided a 30 basis point benefit to SG&A for both the three and six months ended June 30, 2026.
As a percentage of net sales, SG&A increased approximately 60 basis points for both the three and six month period primarily due to inflationary pressures on freight, healthcare, rent, ongoing planned investments in technology, and separation costs. In response to ongoing inflationary cost pressures, during the six months ended June 30, 2026, we implemented targeted cost-control initiatives, including reductions in discretionary travel, limited merit-based compensation adjustments in certain regions, and the strategic deferral of select technology and other projects. As a result of some of these actions, salaries and wages as a percentage of net sales during the three and six month periods were roughly flat.
Restructuring and Other Costs
As part of our global restructuring plan, which was approved and initiated in February 2024, we incurred $71 million and $129 million associated with facility closures and additional severance costs during the three and six months ended June 30, 2026, respectively. For additional details, refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements.
Depreciation and Amortization
Depreciation and amortization expenses increased $12 million and $27 million for the three and six months ended June 30, 2026, respectively, related to planned investments in technology and supply chain initiatives.
Non-Operating Expenses and Income
We incurred $43 million in net non-operating expense during the second quarter of 2026, a $4 million change from $38 million in net non-operating expense in the prior year period. We incurred $83 million in net non-operating expense during the six months ended June 30, 2026, a $9 million change from $75 million in net non-operating expense in the prior year period. This category primarily includes net interest expense, investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").
Income Taxes
Our effective income tax rates were 22.6% and 24.7% for three months ended June 30, 2026 and 2025, respectively. Our effective income tax rates were 22.8% and 23.9% for six months ended June 30, 2026 and 2025, respectively. The rate decreases for both periods are primarily due to domestic investment tax credits, partially offset by reduced tax benefits related to our share-based compensation.
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Net Income, Adjusted Net Income and Segment EBITDA
Net income was $228 million for the three months ended June 30, 2026, a decrease of 10.7% compared to $255 million during the second quarter of 2025. Diluted earnings per share ("EPS") was $1.65 for the second quarter of 2026, down $0.18 compared to $1.83 during the prior year period.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-26 | Galla Christopher T | SVP, GC, and Corp. Secretary | Sell | -2,333 | $115.00 | -$268,295 |
| 2026-05-05 | Howe James F. | President, Motion | Sell | -415 | $104.33 | -$43,297 |
| 2026-05-04 | Howe James F. | President, Motion | Sell | -1,392 | $104.09 | -$144,893 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-20 10-Q expected by 2026-11-08 (in 82 days)
- ~2027-02-19 10-K expected by 2027-02-28 (in 204 days)
- ~2027-04-20 10-Q expected by 2027-05-09 (in 264 days)
- ~2027-07-20 10-Q expected by 2027-08-08 (in 355 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-07-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-21 10-Q Quarterly Report
- 2026-04-28 8-K Material Agreement Entered; Material Financial Obligation; Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2026-04-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-21 10-Q Quarterly Report
- 2026-03-20 8-K Officer/Director Change
- 2026-02-20 10-K Annual Report
- 2026-02-17 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-01-15 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-17 8-K Other Events; Financial Statements and Exhibits
- 2025-10-21 10-Q Quarterly Report
- 2025-10-21 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-04 8-K Material Agreement Entered; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-12 8-K Other Events; Financial Statements and Exhibits
- 2025-07-22 10-Q Quarterly Report