Auto and industrial parts retailer Genuine Parts (NYSE: GPC) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 4.9% year on year to $6.26 billion. Its non-GAAP profit of $1.98 per share was 0.6% below analysts’ consensus estimates.
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Genuine Parts (GPC) Q3 CY2025 Highlights:
- Revenue: $6.26 billion vs analyst estimates of $6.13 billion (4.9% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.98 vs analyst expectations of $1.99 (0.6% miss)
- Management lowered its full-year Adjusted EPS guidance to $7.63 at the midpoint, a 1.6% decrease
- Operating Margin: 8.6%, up from 5.4% in the same quarter last year
- Free Cash Flow Margin: 3.8%, down from 6% in the same quarter last year
- Same-Store Sales rose 2.3% year on year (-0.8% in the same quarter last year)
- Market Capitalization: $18.33 billion
"Our third quarter results were in line with our expectations and demonstrate the ongoing execution of our strategic initiatives," said Will Stengel, President and Chief Executive Officer.
Company Overview
Largely targeting the professional customer, Genuine Parts (NYSE: GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $24.06 billion in revenue over the past 12 months, Genuine Parts is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. To expand meaningfully, Genuine Parts likely needs to tweak its prices or enter new markets.
As you can see below, Genuine Parts’s 5.1% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was tepid.
This quarter, Genuine Parts reported modest year-on-year revenue growth of 4.9% but beat Wall Street’s estimates by 2.2%.
Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months, a slight deceleration versus the last six years. This projection is underwhelming and suggests its products will see some demand headwinds.
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Store Performance
Number of Stores
Genuine Parts opened new stores at a rapid clip over the last two years, averaging 7% annual growth, much faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Note that Genuine Parts reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Genuine Parts’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. Genuine Parts should consider improving its foot traffic and efficiency before expanding its store base.
In the latest quarter, Genuine Parts’s same-store sales rose 2.3% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.
Key Takeaways from Genuine Parts’s Q3 Results
We liked that Genuine Parts beat analysts’ revenue expectations this quarter. On the other hand, its EPS missed and its full-year EPS guidance slightly missed after being lowered. Overall, we think this quarter could have been better. The stock remained flat at $131.81 immediately after reporting.
Genuine Parts may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
