AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Inventory services, store support and actual onsite operations support limited workflow switching friction. Non-exclusive supply and substantial named competition prevent a stronger structural assessment.
durability · 2/4 · National-account agreement coverage persisted at approximately 45% across two annual disclosures, and a longstanding onsite relationship is documented. Agreement duration, renewal performance and exclusivity are not established.
customer dependency · 2/4 · Inventory management, repairs, onsite operations and rapid fulfillment address operational needs and create practical dependence for some customers. This is indirect evidence; neither customer-wide dependence nor inability to substitute is demonstrated.
erosion resilience · 2/4 · First-half 2026 comparable-sales growth in all segments and gross-margin expansion demonstrate resilience. International Automotive margin contraction, higher SG&A intensity and the realized supplier loss show meaningful limits. Competitive risk disclosures describe potential erosion, not proven customer losses.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Higher customer pricing was actually disclosed in first-half 2026, alongside 20 basis points of consolidated gross-margin expansion. Pricing and sourcing also benefited 2024 results, supporting demonstrated but bounded pricing capability. Their separate contributions and volume effects are unavailable.
retention · 2/4 · Ongoing national-account agreements, a longstanding onsite relationship and positive comparable sales support repeat demand indirectly. Comparable sales include pricing and do not establish unchanged customer counts or renewal rates; International Automotive growth was particularly modest.
margin resilience · 2/4 · Gross-margin expansion and improving Industrial and North America Automotive EBITDA margins coexist with International Automotive EBITDA-margin contraction and a 60-basis-point increase in consolidated SG&A intensity. Pricing and sourcing have helped, while full operating-cost protection remains uneven.
contractual freedom · 2/4 · Implemented higher customer prices demonstrate practical repricing ability. Competitive-price commitments constrain that freedom. Detailed customer contract restrictions and repricing provisions are absent, so the assessment is indirect and does not imply unrestricted contractual discretion.
Predictability99
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 6.09
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.34
Financial strength—
Missing required inputs: netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- interestCoverageGrade
- 44.32
- currentRatioGrade
- 26.35
- Debt / FCF (x)
- 11.39
- Interest coverage (x)
- 5.88
- Current ratio (x)
- 1.08
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -0.60
- 3-year average SBC / revenue (%)
- 0.21
- cashConversionGrade
- 88.68
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual investment and cash-flow disclosures permit assessment, but outcomes are mixed. In 2025, $891 million of operating cash flow fell short of combined acquisitions, capital spending and dividends. First-half 2026 operating cash flow improved to $464 million, including a $250 million receivables-sale benefit, while net debt proceeds supported spending. Acquisition returns and durable investment payback are not established.
incentive alignment · 2/4 · Actual three-year performance awards were earned at 42%, with EBITDA and ROIC conditions, demonstrating performance sensitivity. Annual working-capital metrics, ownership guidelines and anti-hedging rules support alignment. Exclusion of supplier-bankruptcy losses and additional time-based retention grants temper the assessment. Grant disclosures establish awards and conditions, not completed vesting or ownership compliance.
execution · 2/4 · Comparable-sales growth, higher segment EBITDA and realized restructuring savings demonstrate operational progress in first-half 2026. International margin pressure, prior inventory-liquidation charges and the supplier-related loss make the wider record mixed. Attribution to management is partly indirect; the proposed separation is not counted as an achieved benefit.
governance · 2/4 · Full disclosed Board and committee attendance in 2025, auditor-service approval controls and anti-hedging rules demonstrate functioning governance practices. The independence finding covers nine of eleven 2026 nominees and is not proof of subsequent election results. Compensation adjustments provide a counterweight; these disclosures do not establish exceptional oversight effectiveness.
Evidence
We provide our customers and deliver value through: •Onsite inventory management and vendor managed inventory ("VMI") 5 Table of Contents •Asset repair and tracking, including radio frequency identification ("RFID") asset management of our customers' inventories •Specialized repair services for gearboxes, fluid power systems, pumps, drive shafts, electrical panels, and hoses and gaskets •Advanced automation and motion control solutions through Motion AI •Integrated e-business capabilities through MiSupplierConnect, our advanced platform that seamlessly connects our IT systems with those of our suppliers.
Business — Industrial value-added services · Filed 20/02/2026
We offer our NAPA Auto Parts stores various management aids, marketing aids and service on topics such as selling and promotional tools, inventory control, pricing and cost analysis, as well as marketing conferences and seminars, sales and advertising manuals and training programs.
Business — NAPA store management and inventory support · Filed 21/02/2025
This system, which undergoes continuous analytical review, is an integral part of our inventory control procedures and comprises an important feature of the inventory management services that we make available to our NAPA Auto Parts stores.
Business — inventory classification system · Filed 21/02/2025
Motion has ongoing sales agreements with many of its national account customers which, collectively, represent 45% of its annual sales volume.
Business — Motion national-account sales agreements · Filed 21/02/2025
Motion has ongoing sales agreements with many of its national account customers which, collectively, represent approximately 45% of its annual sales volume.
Business — Motion national-account sales agreements · Filed 22/02/2024
The Company has a long-standing and ordinary course vendor relationship with Delta and, in connection therewith, maintains automotive parts and supply locations on-site at multiple Delta facilities to better serve Delta’s ground vehicles.
Corporate Governance — longstanding customer relationship and onsite operations · Filed 27/02/2026
Our stores are positioned close to key commercial customers, primarily repair shops and auto care centers, enabling frequent deliveries and efficient order fulfillment.
Business — proximity to commercial automotive customers · Filed 20/02/2026
Most orders are filled immediately from existing stock and deliveries are normally made within 24 hours of order receipt.
Business — Motion fulfillment and delivery · Filed 21/02/2025
We maintain non-exclusive distributor agreements with most suppliers.
Business — non-exclusive supplier agreements · Filed 20/02/2026
Key competitors in North America include AutoZone, Inc., O'Reilly Auto Parts, Inc., Advance Auto Parts, Inc., and LKQ Corporation, among others.
Competition — named North American automotive competitors · Filed 20/02/2026
Internationally, competitors include LKQ Corporation, which has a strong presence in Europe, and Bapcor in Australasia, among many others.
Competition — named international automotive competitors · Filed 20/02/2026
In industrial distribution, our main competitor is Applied Industrial Technologies, Inc., but we also compete against Fastenal Company, and W.W.
Competition — named industrial competitors · Filed 20/02/2026
Because we seek to offer competitive prices, we may be forced to reduce our prices if our competitors reduce their prices or increase promotional spending, which could result in a material decline in our revenues and earnings.
Risk Factors — competitive pricing constraints · Filed 20/02/2026
Consolidation among our competitors could further enhance their financial position, provide them with the ability to offer more competitive prices to customers for whom we compete, take advantage of acquisitions and other opportunities more readily, rapidly scale and invest in their businesses, more successfully utilize developing technology, including data analytics, artificial intelligence, and machine learning, and allow them to achieve increased efficiencies in their consolidated operations that enable them to more effectively compete for customers.
Risk Factors — potential effects of competitor consolidation · Filed 20/02/2026
As a result of these events and our on-going assessment of the credit quality of the vendor, we recorded a charge of $151 million to cost of goods sold in 2025.
Vendor incentives — realized supplier-related credit loss · Filed 20/02/2026
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.
MD&A — tariffs, product costs and customer pricing · Filed 21/07/2026
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.
MD&A — first-half 2026 gross-profit and gross-margin results · Filed 21/07/2026
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.
MD&A — attribution of gross-margin expansion · Filed 21/07/2026
Segment Information North America Automotive Segment The following table presents a summary of our reportable North America automotive segment financial information: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net sales $ 2,537,236 $ 2,444,377 $ 4,900,268 $ 4,709,158 Cost of goods sold 1,547,497 1,486,192 3,001,844 2,882,809 Gross profit 989,739 958,185 1,898,424 1,826,349 Operating expenses 781,411 761,685 1,533,891 1,482,854 EBITDA $ 208,328 $ 196,500 $ 364,533 $ 343,495 Gross margin (1) 39.0 % 39.2 % 38.7 % 38.8 % Operating expenses as a percentage of net sales 30.8 % 31.2 % 31.3 % 31.5 % EBITDA margin (2) 8.2 % 8.0 % 7.4 % 7.3 % International Automotive Segment The following table presents a summary of our reportable international automotive segment financial information: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net sales $ 1,588,112 $ 1,467,904 $ 3,173,628 $ 2,868,011 Cost of goods sold 854,023 789,057 1,720,350 1,549,264 Gross profit 734,089 678,847 1,453,278 1,318,747 Operating expenses 584,098 537,355 1,158,442 1,038,743 EBITDA $ 149,991 $ 141,492 $ 294,836 $ 280,004 Gross margin (1) 46.2 % 46.2 % 45.8 % 46.0 % Operating expenses as a percentage of net sales 36.8 % 36.6 % 36.5 % 36.2 % EBITDA margin (2) 9.4 % 9.6 % 9.3 % 9.8 % Industrial Segment The following table presents a summary of our reportable industrial segment financial information: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net sales $ 2,411,603 $ 2,252,144 $ 4,727,995 $ 4,453,325 Cost of goods sold 1,659,459 1,564,815 3,264,793 3,100,409 Gross profit 752,144 687,329 1,463,202 1,352,916 Operating expenses 435,697 399,191 832,635 786,067 EBITDA $ 316,447 $ 288,138 $ 630,567 $ 566,849 Gross margin (1) 31.2 % 30.5 % 30.9 % 30.4 % Operating expenses as a percentage of net sales 18.1 % 17.7 % 17.6 % 17.7 % EBITDA margin (2) 13.1 % 12.8 % 13.3 % 12.7 % 12 Table of Contents (1)Gross margin is gross profit as a percentage of net sales.
Segment Information — first-half 2026 segment results and margins · Filed 21/07/2026
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.
MD&A — first-half 2026 SG&A expense leverage · Filed 21/07/2026
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.
MD&A — North America Automotive first-half sales components · Filed 21/07/2026
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.
MD&A — International Automotive first-half sales components · Filed 21/07/2026
The increase in sales primarily reflects a 5.0% increase in comparable sales and a 1.0% favorable impact from foreign currency.
MD&A — Industrial first-half sales components · Filed 21/07/2026
Our global restructuring initiatives provided a 30 basis point benefit to SG&A for both the three and six months ended June 30, 2026.
MD&A — realized restructuring benefit to SG&A · Filed 21/07/2026
6 Table of Contents GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, (in thousands) 2026 2025 Operating activities: Net income $ 416,093 $ 449,272 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 265,744 238,453 Share-based compensation 29,698 24,180 Other operating activities, including changes in operating assets and liabilities (247,421) (542,790) Net cash provided by operating activities 464,114 169,115 Investing activities: Purchases of property, plant and equipment (205,391) (248,822) Proceeds from sale of property, plant and equipment 17,884 19,451 Acquisitions of businesses (37,613) (111,973) Proceeds from divestitures of businesses 6,718 59 Other investing activities (9,604) 23,335 Net cash used in investing activities (228,006) (317,950) Financing activities: Proceeds from debt 791,217 21,405 Payments on debt (926,328) (522,637) Net proceeds of commercial paper 338,853 916,587 Shares issued from employee incentive plans (13,254) (15,254) Dividends paid (287,972) (277,306) Other financing activities (26,679) (20,268) Net cash provided by (used in) financing activities (124,163) 102,527 Effect of exchange rate changes on cash and cash equivalents (30,006) 24,310 Net increase (decrease) in cash and cash equivalents 81,939 (21,998) Cash and cash equivalents at beginning of period 477,179 479,991 Cash and cash equivalents at end of period $ 559,118 $ 457,993 See accompanying Notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Cash Flows — six months ended June 30 · Filed 21/07/2026
We also had a $250 million benefit to operating cash flow from our A/R Sales Agreement.
MD&A — receivables-sale contribution to operating cash flow · Filed 21/07/2026
In addition, we had net proceeds of debt of approximately $204 million, which includes $339 million under our commercial paper program to support these investments.
MD&A — net debt proceeds supporting investments · Filed 21/07/2026
29 Table of Contents Cash Flow Activity During 2025, net cash provided by operating activities was $891 million, a decrease of $360 million, or 28.8%, from 2024 that was driven by lower net income, higher interest payments, and changes in working capital.
MD&A — 2025 operating cash-flow decline · Filed 20/02/2026
In 2025, we deployed $318 million for acquisitions, $470 million for capital expenditures, and $564 million for dividends.
MD&A — 2025 acquisitions, capital expenditures and dividends · Filed 20/02/2026
2026 Proxy Statement 22 •The performance-based restricted stock units granted in 2023, which are earned based on achievement of a cumulative three-year Adjusted EBITDA target (weighted at 85%) and a three-year average Return on Invested Capital (ROIC) target (weighted at 15%) were earned at 42% for each NEO.
Executive Compensation — actual three-year performance-award outcome · Filed 27/02/2026
For 2025, performance metrics under our Annual Incentive Plan were Adjusted EBITDA, net sales and working capital goals for all named executive officers.
Executive Compensation — adopted 2025 annual incentive metrics · Filed 27/02/2026
The current guidelines as determined by the Committee include: (i) CEO — ownership equal to seven times prior year’s salary; (ii) Named Executive Officers — ownership equal to three times prior year’s salary; and (iii) Corporate Senior Vice Presidents and Subsidiary Presidents — ownership equal to one times the prior year’s salary.
Executive Compensation — stock ownership guidelines · Filed 27/02/2026
In calculating Adjusted EBITDA for purposes of the 2025 Annual Incentive Plan, the Committee excluded the impact of losses associated with the bankruptcy of a key supplier to the Company’s Global Automotive division, which the Committee determined was an exceptional item not reflective of operational performance or indicative of ongoing operating results, given both the unusual circumstances and timing of the bankruptcy, which materially increased the challenges of mitigating the impact on results of the
Executive Compensation — supplier-bankruptcy exclusion from annual incentive calculation · Filed 27/02/2026
2026 Proxy Statement 24 In addition to the annual long-term incentive opportunity set forth above, each NEO also received a grant of retention RSUs with a grant date value of $3 million for Mr.
Executive Compensation — additional retention RSU grants · Filed 27/02/2026
Stengel and $1.5 million for each other NEO, each subject to a three-year cliff vesting period.
Executive Compensation — retention grant values and cliff-vesting condition · Filed 27/02/2026
During 2025, the Board of Directors held five meetings, all of which were attended by our directors.
Corporate Governance — actual 2025 Board attendance · Filed 27/02/2026
All committee members attended all of the committee meetings on which they served.
Corporate Governance — actual 2025 committee attendance · Filed 27/02/2026
Non-audit services may be approved by the Chair of the Committee and reported to the full Audit Committee at its next meeting but may not be approved by the Company’s management.
Auditor Oversight — approval authority for non-audit services · Filed 27/02/2026
The Board has affirmatively determined that nine of the eleven director nominees have no direct or indirect material relationships with the Company that would impair their independence and therefore are independent directors according to the NYSE rules and the Company's Corporate Governance Guidelines.
Corporate Governance — independence determination for 2026 director nominees · Filed 27/02/2026
The Company prohibits hedging and pledging of Company stock by executive officer and directors.
Executive Compensation — prohibition on executive and director hedging and pledging · Filed 27/02/2026
The separation is targeted for completion in the first quarter of 2027, subject to certain customary and regulatory conditions.
General Basis of Presentation — proposed separation timing and conditions · Filed 21/07/2026
There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.
General Basis of Presentation — uncertainty of separation completion · Filed 21/07/2026
The year over year declines in these metrics are primarily due to $221 million in restructuring and other costs, $62 million in inventory liquidation charges, and higher SG&A expenses driven by inflationary pressures and investments in technology.
MD&A — 2024 restructuring, inventory liquidation and expense pressures · Filed 21/02/2025
These impacts were partially offset by improved gross profit and margin from acquisitions and pricing and sourcing initiatives and the benefits from the restructuring program.
MD&A — 2024 pricing, sourcing and restructuring benefits · Filed 21/02/2025
Increased competition among distributors of automotive and industrial parts, including increased availability among digital and e-commerce providers across the markets in which we do business, could cause a material adverse effect on our results of operations.
Risk Factors — digital and e-commerce competition · Filed 20/02/2026
