AI Takeaway
In Q2 FY2026, GPC increased revenue 6.0% to $6.5B and expanded gross margin modestly, but GAAP net income declined 10.7% to $227.6M as SG&A, restructuring, separation, and other costs rose faster than sales. Source: 10-Q Item 2 MD&A, p.21
Revenue
$6.54B
++6.04% YoY
EPS (Basic)
$1.65
-9.84% YoY
Gross Margin
37.8%
++0.09% YoY
Filed · Source: SEC EDGAR 10-Q filing
Genuine Parts (GPC) reported Q2 FY2026 revenue of $6.54B, up 6.0% year over year. The company posted net income of $227.56M, down 10.7% from a year earlier, with diluted EPS of $1.65. Gross margin was 37.8%.
Q2 FY2026 net sales increased 6.0% to $6.5B, including 3.4% comparable-sales growth, a 1.4% favorable foreign-currency-and-other contribution, and a 1.2% acquisition contribution. Management estimates that approximately 2.5% of comparable-sales growth reflected price inflation, including tariff-related effects.
Source: Source: 10-Q Item 2 MD&A, pp.21-23
Industrial sales rose 7.1% in Q2 FY2026, driven by 6.1% comparable-sales growth, while segment EBITDA increased 9.8% to $316.4M and its EBITDA margin improved 30 basis points to 13.1%. Management cited stronger U.S. manufacturing activity, pricing and sourcing initiatives, restructuring benefits, and cost controls.
Source: Source: 10-Q Item 2 MD&A, pp.23, 25-26
Net income fell 10.7% to $227.6M and diluted EPS fell 9.8% to $1.65. Management attributed the decline primarily to planned-separation costs, higher restructuring and other costs, and higher Middle East conflict-related costs; adjusted diluted EPS, which excludes specified items, increased 2.4% to $2.15.
Source: Source: 10-Q Item 2 MD&A, pp.21, 24, 27
SG&A increased 8.3%, or $146M, and rose 60 basis points as a percentage of sales to 29.3%, exceeding the 6.0% sales-growth rate. Management cited higher salaries and wages, freight, healthcare, rent, IT, acquisition-related operating costs, approximately $30M of foreign-exchange impact, and $16M of planned-separation costs; restructuring initiatives provided a 30-basis-point SG&A benefit.
Source: Source: 10-Q Item 2 MD&A, p.23
GPC announced on February 17, 2026 its intention to separate Global Automotive and Global Industrial into two independently publicly traded companies, targeted for completion in the first quarter of 2027, subject to customary and regulatory conditions. Separation-related costs were $16.2M in Q2 FY2026 and $33.7M for the first six months of 2026.
Source: Source: 10-Q Item 2 MD&A, pp.19, 23, 27
Q2 FY2026 SG&A expense increased 8.3%, faster than revenue growth of 6.0%, and GAAP net income declined 10.7% to $227.6M. Continued cost growth relative to sales could further pressure operating profitability.
Source: Source: 10-Q Income Statement (XBRL)
Long-term debt increased 6.2% year over year to $4.0B, while stockholders' equity declined 3.8% to $4.5B. This combination increased the long-term-debt-to-equity relationship to approximately 0.88x, which may reduce balance-sheet flexibility if earnings or cash generation weaken.
Source: Source: 10-Q Balance Sheet (XBRL)
Current assets were $11.1B and current liabilities were $9.5B, resulting in a current ratio of 1.16x. The company has a positive working-capital position, but the modest cushion means changes in inventory, receivables, or vendor-payment timing could affect short-term liquidity.
Source: Source: 10-Q Balance Sheet (XBRL)
Basic and diluted EPS both declined 9.8% year over year to $1.65 in Q2 FY2026, reflecting the decline in GAAP net income. Persistently lower earnings per share could constrain internally generated capital available after dividends and investment needs.
Source: Source: 10-Q Income Statement (XBRL)
Reported EPS of $2.15 versus the $2.10 analyst consensus — a +2.6% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $6.54B | $6.16B | +6.04% |
Cost of Revenue | $4.07B | $3.84B | +5.89% |
Gross Profit | $2.47B | $2.32B | +6.29% |
Net Income | $227.56M | $254.88M | -10.72% |
EPS (Basic) | $1.65 | $1.83 | -9.84% |
EPS (Diluted) | $1.65 | $1.83 | -9.84% |
SG&A Expense | $1.92B | $1.77B | +8.26% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $21.06B | $20.43B | +3.07% |
Current Assets | $11.07B | $10.47B | +5.65% |
Current Liabilities | $9.55B | $9.21B | +3.64% |
Stockholders' Equity | $4.53B | $4.7B | -3.76% |
Long-Term Debt | $3.98B | $3.74B | +6.21% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $464.11M | $169.12M | +174.44% |
Investing Cash FlowYTD | $-228.01M | $-317.95M | +28.29% |
Financing Cash FlowYTD | $-124.16M | $102.53M | -221.10% |
Dividends PaidYTD | $287.97M | $277.31M | +3.85% |
D&AYTD | $265.74M | $238.45M | +11.45% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 37.8% | 37.7% | +0.09% |
Net Margin | 3.5% | — | — |
ROE | 5.0% | — | — |
ROA | 1.1% | — | — |
Current Ratio | $1.159 | — | — |
Expected release date, analyst estimates & what to watch
GPC reported Q1 2026 revenue of $6.26B (+6.8% YoY) driven by top-line growth, but net income declined 3.0% to $188.5M as SG&A expenses surged 8.6%, compressing profitability despite a modest gross margin improvement.
GPC's FY2025 revenue grew 3.5% to $24.3B, but net income collapsed 92.7% to $65.9M, driven by a sharp rise in SG&A expenses and elevated debt, signaling significant profitability pressure despite modest top-line growth.
GPC reported Q2 FY2026 revenue of $6.5B, up 6.0% year over year, with 3.4% comparable-sales growth. However, GAAP net income fell 10.7% to $227.6M and diluted EPS fell to $1.65 as SG&A, restructuring, separation, and other costs increased. Source: 10-Q Item 2 MD&A, pp.21-24
GPC's revenue increased 6.0% to $6.5B in Q2 FY2026. Growth consisted of 3.4% comparable-sales growth, a 1.4% favorable foreign-currency-and-other contribution, and a 1.2% benefit from acquisitions; management estimated that about 2.5% of comparable-sales growth came from price inflation. Source: 10-Q Item 2 MD&A, pp.21-23
GAAP net income decreased by $27.3M, or 10.7%, to $227.6M, while diluted EPS decreased $0.18 to $1.65. Management cited separation costs, increased restructuring and other costs, and higher costs associated with the Middle East conflict, partly offset by higher gross profit from sales growth and pricing actions. Source: 10-Q Item 2 MD&A, pp.21, 24
Industrial showed the strongest operating performance: sales rose 7.1%, comparable sales rose 6.1%, and segment EBITDA increased 9.8% to $316.4M. Its EBITDA margin improved 30 basis points to 13.1%, while North America Automotive EBITDA grew 6.0% and International Automotive EBITDA grew 6.0%. Source: 10-Q Item 2 MD&A, pp.21, 23, 25-26
GPC had $11.1B of current assets and $9.5B of current liabilities, for a 1.16x current ratio, and generated $464.1M of operating cash flow in the cumulative six months ended June 30, 2026. Long-term debt was $4.0B, up 6.2% year over year, while stockholders' equity was $4.5B, down 3.8%, which warrants monitoring alongside the company's liquidity position. Source: 10-Q Balance Sheet and Cash Flow Statement (XBRL)