As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the auto parts retailer industry, including Genuine Parts (NYSE: GPC) and its peers.
Cars are complex machines that need maintenance and occasional repairs, and auto parts retailers cater to the professional mechanic as well as the do-it-yourself (DIY) fixer. Work on cars may entail replacing fluids, parts, or accessories, and these stores have the parts and accessories or these jobs. While e-commerce competition presents a risk, these stores have a leg up due to the combination of broad and deep selection as well as expertise provided by sales associates. Another change on the horizon could be the increasing penetration of electric vehicles.
The 5 auto parts retailer stocks we track reported a satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.5% since the latest earnings results.
Genuine Parts (NYSE: GPC)
Largely targeting the professional customer, Genuine Parts (NYSE: GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Genuine Parts reported revenues of $6.26 billion, up 4.9% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ revenue estimates but full-year EPS guidance slightly missing analysts’ expectations.
"Our third quarter results were in line with our expectations and demonstrate the ongoing execution of our strategic initiatives," said Will Stengel, President and Chief Executive Officer.
Genuine Parts scored the biggest analyst estimates beat of the whole group. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 12.9% since reporting and currently trades at $122.69.
Is now the time to buy Genuine Parts? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Advance Auto Parts (NYSE: AAP)
Founded in Virginia in 1932, Advance Auto Parts (NYSE: AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats.
Advance Auto Parts reported revenues of $2.04 billion, down 5.2% year on year, outperforming analysts’ expectations by 0.7%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Advance Auto Parts achieved the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 12.9% since reporting. It currently trades at $48.
Is now the time to buy Advance Auto Parts? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: AutoZone (NYSE: AZO)
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
AutoZone reported revenues of $6.24 billion, flat year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ EBITDA estimates and a miss of analysts’ gross margin estimates.
As expected, the stock is down 10.8% since the results and currently trades at $3,664.
Read our full analysis of AutoZone’s results here.
Monro (NASDAQ: MNRO)
Started as a single location in Rochester, New York, Monro (NASDAQ: MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Monro reported revenues of $288.9 million, down 4.1% year on year. This print missed analysts’ expectations by 2.8%. Zooming out, it was actually a strong quarter as it put up an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Monro had the weakest performance against analyst estimates among its peers. The stock is down 15.5% since reporting and currently trades at $15.27.
Read our full, actionable report on Monro here, it’s free for active Edge members.
O'Reilly (NASDAQ: ORLY)
Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ: ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.
O'Reilly reported revenues of $4.71 billion, up 7.8% year on year. This result met analysts’ expectations. Aside from that, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a slight miss of analysts’ EBITDA estimates.
O'Reilly pulled off the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is down 6.5% since reporting and currently trades at $94.66.
Read our full, actionable report on O'Reilly here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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