Genuine Parts grew Q2 2026 sales 6.0% to $6.54 billion, but restructuring and separation costs cut GAAP EPS to $1.65 from $1.83; adjusted EPS rose 2.4% to $2.15 as Industrial outpaced the automotive businesses.
Revenue
$6.5B
+6.0% YoY
Net income
$228M
-10.7% YoY
Diluted EPS
$1.65
-9.8% YoY
Operating margin
5.1%
Overview
Genuine Parts Company — the owner of NAPA Auto Parts and the industrial distributor Motion — grew second-quarter 2026 sales 6.0% to $6.54 billion, but GAAP net income fell 10.7% to $228 million ($1.65 per diluted share, down from $1.83). The gap between the two is almost entirely one-off costs: $76 million of restructuring charges (closing and consolidating distribution centers and stores, plus severance) and $16 million of costs to prepare for splitting the company in two. Stripping those out, adjusted earnings per share rose 2.4% to $2.15.
The quarter's story is a split between the two halves of the business that are about to become separate companies. The Industrial segment (Motion) grew comparable sales 6.1% and widened its margin; the automotive businesses grew more slowly, and International Automotive's headline growth came mostly from currency and acquisitions rather than more parts sold through existing locations.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$6,537M
$6,164M
+6.0%
Comparable sales growth
+3.4%
—
—
Gross margin
37.8%
37.7%
+0.1 pts
Operating margin*
5.1%
6.1%
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*GPC does not report an operating-income line. Operating margin here is our calculation: gross profit minus total operating expenses ($336M this year, $377M last year), divided by net sales. It includes the restructuring charges.
"Comparable sales" is GPC's measure of growth from its existing business — it strips out sales added by acquisitions and the effect of exchange-rate moves, so it shows whether the underlying business sold more. "Gross margin" is the share of each sales dollar left after paying for the parts sold.
Where the growth came from
The 6.0% total sales increase broke down as 3.4% comparable sales, 1.4% from favorable currency and 1.2% from acquisitions. The 10-Q says comparable sales in both the quarter and first half benefited from roughly 2.5% of price inflation, including tariff-related price increases — which means most of the 3.4% comparable growth came from higher prices rather than more units. Comparable sales did improve from the first quarter in all three segments, according to the filing.
Segment
Sales
Total growth
Comparable sales
Acquisitions
Currency
Segment EBITDA
EBITDA margin (Q2 2025)
North America Automotive
$2,537M
+3.8%
+2.6%
+1.3%
—
$208M (+6.0%)
8.2% (8.0%)
International Automotive
$1,588M
+8.2%
+0.6%
+2.7%
+4.9%
$150M (+6.0%)
9.4% (9.6%)
Industrial (Motion)
$2,412M
+7.1%
+6.1%
+0.2%
+0.8%
$316M (+9.8%)
13.1% (12.8%)
Segment EBITDA is earnings before interest, tax, depreciation and amortization, measured before corporate overhead and one-off charges — a rough gauge of each business's own operating profit.
Industrial was the standout. Gross profit rose 9.4% on 7.1% sales growth, and the segment's gross margin expanded 70 basis points (0.7 percentage points) on pricing and sourcing initiatives. The 10-Q points to US manufacturing activity, measured by the purchasing managers' index (PMI), posting "its strongest monthly expansions since May 2022" during the quarter.
North America Automotive (NAPA in the US, Canada and Mexico) grew comparable sales 2.6%, helped by stores acquired over the past year. Its gross margin slipped slightly because recently acquired businesses run at lower margins, but tighter headcount and cost control lifted the EBITDA margin by 20 basis points.
International Automotive (Europe and Australasia) is where the headline flatters the substance: of the 8.2% sales growth, 4.9 points came from a weaker dollar and 2.7 points from acquisitions, leaving just 0.6% comparable growth. Its margin fell 20 basis points, which the filing attributes mainly to higher fuel and freight costs linked to the conflict in the Middle East.
Costs: why GAAP profit fell
Operating expenses grew faster than sales. Selling, administrative and other expenses (SG&A — wages, rent, freight, IT and other running costs) rose 8.3% to $1.92 billion, reaching 29.3% of sales versus 28.7% a year earlier. The 10-Q attributes the increase to higher wages, freight, healthcare, rent and technology costs, costs of acquired businesses, about $30 million of currency translation, and $16 million of separation costs. It credits the restructuring program with a 30-basis-point benefit to SG&A and says targeted cost controls (less travel, limited merit raises in some regions, deferred technology projects) kept wages roughly flat as a share of sales.
On top of that:
Restructuring and other costs were $76 million pre-tax ($71 million on the restructuring line plus $5 million booked in cost of goods sold), up from $46 million, as the restructuring initiative begun in February 2024 continued to close facilities and cut roles.
Middle East conflict: GPC has no operations in the region, but the 10-Q estimates that higher fuel and supply-chain costs, and their effect on customer spending, reduced pre-tax income by about $20 million in the quarter, mostly in International Automotive. This cost is not excluded from adjusted EPS.
Corporate costs (headquarters functions not charged to segments) rose to $108 million from $79 million, or 1.6% of sales versus 1.3%, on personnel and health-insurance inflation.
Interest expense rose to $46 million from $40 million, and depreciation and amortization rose $12 million on technology and supply-chain investment.
A lower tax rate (22.6% versus 24.7%, mainly from domestic investment tax credits) partly cushioned the drop in net income.
Takeaway: Underlying profit growth is thin and uneven. Adjusted EPS rose only 2.4% on 6.0% sales growth, and roughly 2.5 points of the 3.4% comparable sales gain was price inflation. Industrial is carrying the improvement; International Automotive is growing mainly through currency and acquisitions while absorbing about $20 million of fuel and freight costs from the Middle East conflict.
The planned separation
On February 17, 2026, GPC announced it would split into two independent, publicly traded companies — Global Automotive and Global Industrial — targeted for completion in the first quarter of 2027, subject to customary and regulatory conditions. The Q2 earnings release says the company remains "on track" for that date. Separation costs (mainly legal and professional fees and executive incentive costs) were $16 million in the quarter and $34 million in the first half.
A September 9, 2026 8-K filed after the quarter added detail: after the split the automotive business will keep the Genuine Parts Company name and the industrial business will operate as Motion. Board member Court Carruthers was named CEO-elect of the automotive company, Chairman and CEO Will Stengel will lead Motion, and the two businesses will hold separate investor days on December 8 and December 9, 2026.
Cash flow and balance sheet
Operating cash flow for the first half was $464 million, up from $169 million a year earlier; the 10-Q attributes this to better working capital (the money tied up in inventory and receivables net of what is owed to suppliers), partly offset by tax-planning payments. It also notes a $250 million boost from GPC's program for selling customer receivables to banks, which pulls cash forward rather than generating it from operations.
Free cash flow (operating cash flow minus capital spending) was $259 million, against negative $80 million in the first half of 2025.
Total debt was about $4.98 billion at June 30 (short-term borrowings plus current and long-term debt), up from about $4.80 billion at year-end. Liquidity was $2.3 billion, including $559 million of cash.
GPC paid $288 million in dividends in the half after raising its quarterly dividend 3.2% in February — its 70th consecutive year of dividend increases. No shares were bought back under its repurchase authorization in the quarter.
Outlook
Management reaffirmed its 2026 adjusted EPS guidance of $7.50 to $8.00 and total sales growth of 3% to 5.5%, but reshuffled the pieces:
2026 guidance
Previous
Updated
Total sales growth
3% to 5.5%
3% to 5.5%
North America Automotive sales growth
3% to 5%
2.5% to 4.5%
International Automotive sales growth
3% to 6%
5% to 8%
Industrial sales growth
3% to 6%
3% to 6%
Diluted EPS (GAAP)
$6.10 to $6.60
$5.90 to $6.40
Adjusted diluted EPS
$7.50 to $8.00
$7.50 to $8.00
Operating cash flow
$1.0B to $1.2B
$1.0B to $1.2B
Free cash flow
$550M to $700M
$550M to $700M
The lower GAAP EPS range now includes the separation costs incurred year to date, per the release. The raised International Automotive range lines up with the currency and acquisition tailwinds seen in the first half (7.8 points of that segment's 10.7% first-half growth came from exchange rates), not with a pickup in underlying demand, while the trimmed North America Automotive range is a modest downgrade to the core NAPA business.
Our read: First-half adjusted EPS was $3.92, so reaching the $7.50 low end requires about $3.58 in the second half — below the first-half pace, which leaves some room for the fuel-cost drag to continue. The bigger question is the quality of growth: with price inflation doing most of the work in comparable sales and restructuring charges recurring every quarter ($134 million in the first half), the separation will leave two companies on different trajectories — an Industrial business with volume momentum and expanding margins, and an automotive business where underlying growth is modest and International margins are under pressure.
Source: Genuine Parts Company Form 10-Q for the quarter ended June 30, 2026, and the Q2 2026 earnings release (Form 8-K, Exhibit 99.1, July 21, 2026). Separation leadership details from Form 8-K filed September 9, 2026.