Genuine Parts Company (NYSE:GPC) Q3 2023 Earnings Call Transcript

Daniel Imbro: Great. That’s helpful. And then just to clarify, Bert, I guess, you said you had one fewer selling day in the quarter. I guess, how did that happen? Was it timing of a holiday and what month did that fall in as we think about the cadency laid out? And then if there any makeup, if there are one more selling day in any quarter coming up, we should be aware of as a model.

Bert Nappier: So, Dan I missed the very beginning of your question. Can you give that back to me one more time?

Daniel Imbro: You said one fewer selling day. Was it a holiday timing or kind of what drove that. And then what month did it fall into as we think about the cadence you gave us at month-to-month comps?

Bert Nappier: I’d rather not get into — get into parsing out the quarter by month. The quarter year over year in the US, for both Motion and for US Automotive was impacted by one day. We’ll just leave it there. And then, in fourth quarter, we’re going to be flat on operating days.

Daniel Imbro: Got it. Thanks so much.

Operator: Our last question comes from Kate McShane of Goldman Sachs. Please go ahead.

Kate McShane: Hi. Thanks for taking our question. We had two quick ones. First, is there a way to delineate between the pockets of where inventory is maybe a little light versus some of the execution issues that you highlighted in automotive. And is there a timeline of when inventory availability improves?

Will Stengel: Yeah. There is we have great information, on where we’ve got our opportunities as we’ve talked about the last 12 to 24 months, investing in analytics, and in particular around inventory analytics has been an area of focus. So, I think that’s made us better to know precisely where we have, opportunities. And the opportunities are not just availability, but it’s movement. And again, there’s nothing – there’s not a new thought here. It’s just better execution. That’s taking the inventory that we have and getting into the right spot at the right time and making sure that you’ve got enough of the stuff that’s moving fast. We’ve got a lot of visibility into that. And it’s an ongoing effort. I mean, we’ve been working on this topic probably forever. And we’re just stepping up our urgency. So, we’ll, the teams that are urgent, they’re focused on it, and we’re going to make progress each and every day.

Paul D. Donahue: And Kate, I would just tag out to what Will said. Specific categories that were problematic for us, during the pandemic and even post pandemic, those new programs are rolling out as we speak. So, we would expect to see improvements in those product categories here going forward.

Kate McShane: Okay. Thank you. And then our last question is just around the 340-basis point headwind in the quarter. Was that anticipated when you were originally guiding 4% to 6% same store sales in automotive? And if so, what is bringing that original comp guide of 4% to 6% down to 2% to 4%? Is it more what’s being anticipated in Q4?

Bert Nappier: Yeah, Kate, it’s Bert. Of course, we knew the expo headwind and the selling day was there. So that wasn’t a surprise to us at all. Remember, we don’t guide to quarters. So, we weren’t thinking about through that – through a Q3 lens. We were thinking about our guidance through the full year. And we, you know, as we guided, thought we would sell through that. And again, we’ve reaffirmed our top line guide for the year this morning. We did lower the comp guide for automotive. I think that’s just being smart, about having to factor in. The slower and softer performance for US Automotive year to date and what it’s going to mean for the full year. But at the end of the day, as we thought about expectations, sales recovery didn’t progress quite as quickly as we thought in Q3, Will has given you a lot detail around the execution things we’re working on. And again, we’ve reaffirmed our full year top line this morning.