Genuine Parts beats quarterly estimates boosted by cost cutting, new stores

Auto parts distributor Genuine Parts GPC reported first-quarter profit above market expectations on Tuesday, as cost cutting and acquisition of more stores offset weaker demand in the U.S. and Europe.

The company expects its 2024 and 2025 restructuring efforts, taken in response to weaker organic sales in the U.S. and Europe, to result in about $200 million of savings "when fully annualized by 2026."

It has also been increasing the number of stores it owns as part of the National Automotive Parts Association (NAPA), a retailers' cooperative distributing auto parts throughout North America.

Although U.S. President Donald Trump's stop-and-start tariffs have pushed the automotive industry into a whirlwind of uncertainty, CFO Bert Nappier said in a conference call with analysts that certain new tariffs during the first quarter was immaterial on the company.

The company also reaffirmed its full-year outlook, although the forecast did not include potential impacts from tariffs.

"We think the fact that (Genuine Parts) maintained guidance in the face of widespread negative investor sentiment is a positive," Garrett Nelson, senior equity analyst at CFRA Research, said in a note.

The retailer's adjusted net income per share of $1.75 for the three months ended March 31 came above analysts' expectations of $1.68, according to data compiled by LSEG.

Total first-quarter sales of $5.87 billion was also slightly higher than analysts' estimate of $5.83 billion.

Genuine Parts reaffirmed its expectations of annual sales growth of 2% to 4% and adjusted earning per share between $7.75 and $8.25 for the year ending December 31.

Shares of the company were trading 1% higher, after rising as much as 4% earlier in the session.