Genuine Parts Co., a diversified distributor focused mostly on auto parts sold online and in stores, is operating in a “challenging sales environment” across three of its key industries: U.S. automotive, and worldwide office and electrical, president and CEO Phil Donahue says.
“Our third quarter profitability was impacted by lower gross margins and higher operating expenses,” he said in a statement issued last week along with the company’s financial statement for the quarter ended Sept. 30. Net income for the quarter dropped 14.5% year over year, to less than $160 million on a 3.9% increase in net sales to $4.1 billion.
But Donahue said he expects Genuine Parts to bounce back in the coming quarters with help from three companies it has agreed to acquire. Genuine Parts said last week it plans to acquire Rochester, N.Y.-based auto parts distributor Monroe Motor Parts and Apache Hose & Belting Co., a distributor of parts for agricultural and industrial markets.
Monroe Motor Parts offers online ordering through the Web Shop ordering system provided by Parts Plus, a division of the Automotive Distribution Network. The Web Shop online ordering system lets repair service dealers, corporate fleets and other clients research available inventory and place orders for products. The other divisions of the Automotive Distribution Network are Independent Auto Parts of America and Auto Pride.
Genuine Parts, also known as GPC, didn’t say what it agreed to pay for Monroe or Apache, but it said it expects Monroe to generate $25 million in annual revenue and Apache, which has customers in Europe and the U.S., $100 million. Apache will operate as part of GPC’s Motion Industries unit, a distributor of industrial parts. GPC said last month it had agreed to pay approximately $2 billion for Alliance Auto Group, a London-based distributor of auto parts.
Genuine Parts doesn’t break out web sales, but it maintains an extensive online presence on websites for each of its four operating units. They include:
NapaOnline.com—the e-commerce site for NAPA Auto Parts Stores, GPC’s flagship operation and part of its Automotive Products Group, which sells to commercial repair shops as well as individual consumers through a network of more than 6,000 stores in the United States as well as via e-commerce. 75% of its sales are to professional repair shops and mechanics, the rest to do-it-yourself customers.
MotionIndustries.com—the site for Motion Industries Inc., a distributor of industrial parts ranging from metal-cutting tools to air-compression equipment and motor vehicle transmission gears;
SPRdealerservices.com— a customer portal for S.P. Richards Co., a distributor of office supplies to other distributors and resellers;
EIS-inc.com— the site for EIS Inc., a distributor of electrical and electronic products.
GPC said sales in its S.P. Richards office products unit declined 4.7% year over year in the quarter, while sales in all other groups increased.
For the third quarter ended Sept. 30, Genuine Parts reported:
- Total net sales increased 3.9% to $4.094 billion for the third quarter ended Sept. 30, up from $3.941 billion in the year-earlier period.
- Gross profit of $1.227 billion, up 2.3% from $1.199 billion;
- Net income of $158.4 million, down 14.5% from $185.3 million.
For the nine months ended Sept. 30, Genuine Parts reported:
- Net sales of $12.102 billion, up 4.7% from $11.560 billion a year earlier;
- Gross profit of $3.622 billion, up 4.4% from $3.469
- Net income of $508.6 million, down 4.9% from $534.7 million.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes DigitalCommerce360.com, Internet Retailer and Internet Health Management. Follow B2BecNews editor Paul Demery on Twitter @pdemery.
Follow us on LinkedIn and be the first to know when new B2BecNews content is published.