What Happened?

Shares of auto and industrial parts retailer Genuine Parts (NYSE:GPC) fell 20% in the afternoon session after the company reported disappointing third-quarter earnings results, with same-store sales and EPS coming in below expectations. Looking ahead, the company's EPS forecast for the full year missed Wall Street's expectations. Management attributed the performance to "weakness in market conditions in Europe and our Industrial business," and anticipates a challenging macro environment for the rest of the year. Overall, this was a softer quarter.

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What The Market Is Telling Us

Genuine Parts’s shares are not very volatile and have only had 1 move greater than 5% over the last year. Moves this big are rare for Genuine Parts and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 12.1% on the news that the company reported a "beat and raise" quarter. First quarter results beat Wall Street analysts' earnings expectations. Gross margin also improved and the company continued to generate positive cash flows. 

Looking ahead, its full-year earnings guidance exceeded Wall Street's estimates and was raised to $9.88 at the midpoint vs. the previous midpoint of $9.80. On the other hand, its revenue unfortunately missed analysts' expectations during the quarter. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track.

Genuine Parts is down 16.7% since the beginning of the year, and at $115.18 per share, it is trading 29.5% below its 52-week high of $163.38 from April 2024. Investors who bought $1,000 worth of Genuine Parts’s shares 5 years ago would now be looking at an investment worth $1,115.

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