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| For the year, segment profit margin was 9.9%, a notable 50 basis point increase from 2022 and highlighted by our team at Motion driving an impressive 200 basis points of margin expansion on mid-single-digit sales growth with industrial now representing approximately 50% of GPC's profit pool |
| I'll just kind of stick with where we are, not focus on 1 month since 1 month doesn't make a quarter but we're encouraged by January, particularly in the NAPA business, it improved sequentially from December and better expectations to start the quarter |
| We are pleased to report that Genuine Parts Company delivered on our financial commitments in 2023 and finished the year with a solid fourth quarter |
| And so I would just say that we feel really good about the thoughtfulness that was put in by our teams of how to make sure that we strike the balance here between continuing to serve our customers and deliver every single day, but at the same time, do the right thing for the business for the long term and streamline some of our costs |
| We improved our total company segment profit margins by 50 basis points to nearly double digits, and we had our third consecutive year of double-digit earnings growth |
| We've got the best team in the industry, and I have no doubt they'll deliver for us in Q1 as well |
| Our teams around the globe delivered a strong performance while remaining focused on our long-term strategic initiatives to profitably grow our business and deliver value for our customers |
| And I think as Bert mentioned in his prepared remarks, we're looking for really a strong -- much stronger second half |
| So on balance, we're encouraged by the sequential improvement versus third quarter and even in the 5 of 14 that are declining, we saw 3 of those 5 improve in the fourth quarter versus the third quarter |
| Our performance in the fourth quarter and full year continues to demonstrate our long history of delivering earnings and cash flow growth, while maintaining a strong balance sheet |
| Most importantly, it was driven by incredible effort from our global teammates to take care of our customers, live our GPC values every day and deliver performance |
| As an integrated business, Motion is a clear leader in their space, providing industrial aftermarket solutions with a compelling value proposition to more than 200,000 customers around the world |
| In addition, during 2023, Motion continued to roll out their fulfillment center strategy, which is driving cost efficiencies, inventory productivity and improved customer service levels |
| NAPA AutoCare, which we're incredibly excited about the progress we're seeing in NAPA AutoCare |
| Within Automotive, our International Automotive businesses outperformed our expectations in 2023 |
| In closing, GPC delivered solid fourth quarter and full year results and we achieved the plan we laid out for 2023 |
| In 2024, we believe that supportive industry fundamentals combined with clear priorities and urgent action position NAPA to deliver success |
| And finally, the rollout of NAPA branded product in the European market has continued to surpass our expectations, a testament to the strength of the NAPA brand |
| In Australasia, our team is profitably growing market share with their fourth consecutive year of double-digit profit growth on top of industry-leading sales growth |
| Our supply chain investments in the region have improved the customer experience while driving productivity in our business |
| We have got a great balance sheet a lot of financial strength and flexibility to be able to lean in here and we'll have the ability to do that |
| We are confident we are focused on the right initiatives to positively impact our performance in the quarters ahead |
| The good news, Bret, is that even when we look within our independent owner network and our company-owned network we've got great operations out there for us to replicate |
| And that's just going to benefit the top line, which will benefit the overall business |
| We identified opportunities within our stores and DCs to improve our processes to ensure that we're delivering our customer commitments and executing locally |
| We remain disciplined on our playbook for acquisitions and are confident in our ability to continue seamlessly integrating future businesses across all our segments and geographies to create value for our shareholders |
| As we look ahead to 2024, we are seeing supportive industry fundamentals in both the Automotive and Industrial end markets |
| Within our global Automotive business, we continue to see an increase in miles driven and aging and complex vehicle fleet and high vehicle prices and financing costs all supportive for the Automotive aftermarket, and we remain uniquely positioned in this space with our global footprint |
| And for the year, our gross margin was 35.9%, an 80 basis point improvement from our adjusted gross margin in 2022 |
| We stand to benefit from a highly diversified portfolio of customers and end markets and we are well positioned now and in the future to capitalize on reshoring trends |
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| December performance, however, was well below our expectations, driven by unseasonably warm weather and moderated purchases from our independent owners |
| Global Automotive segment profit in the fourth quarter was $259 million and segment operating margin was 7.5%, down 110 basis points |
| For the full year, automotive segment profit decreased approximately 1% versus the same period last year and segment operating margin was 8.2%, down 50 basis points year-over-year |
| While these actions drove encouraging improvements, the fourth quarter results at NAPA still missed our expectations |
| In the US, automotive sales declined 5.6% during the fourth quarter, with comparable sales down 6.1% |
| As we mentioned previously, the fourth quarter and December in particular, were difficult year-over-year sales comparisons for NAPA |
| Categories like equipment and machinery and oil and gas were underperformers relative to the fourth quarter average |
| As we consider our sales guidance for automotive, our growth rate will be negatively impacted in 2024 and by approximately 100 basis points from new incentive programs associated with changes to certain supplier arrangements we previously announced in the U.S |
| In the quarter, sales to commercial customers were down low single digits, while sales to DIY customers were down mid-single digits |
| While industry fundamentals remain supportive, broader macroeconomic factors like high interest rates and persistent inflation in everyday purchases are pressuring the consumer and businesses alike |
| And then you commented that December, in particular, you saw independent volumes down or purchasing down |
| Perhaps that's 1 area where you've seen some of the most pressure on your business |
| But as I just talked about, moderated first half, stronger second half and a few things specifically for Q1, we'll have some interest rate headwind -- interest expense headwind, excuse me, and a difficult comp promotion, they comped at 12% last year |
| How they finished destocking from your perspective so that we should see more pressure on comps from that effect? Will Stengel Yes, I think we're expecting 2024 to be a more normal year coming off of 2023, which was clearly challenged and different than our expectations |
| Beyond that, you know the macro environment is pretty choppy |
| The moderation in the sales benefit from inflation continues to be a factor in our year-over-year comparisons |
| What I would tell you, Q1 will be our toughest comp of the year, Daniel |
| Our outlook assumes that SG&A will deleverage between 20 and 30 basis points from further investments in technology |
| For commercial, NAPA Auto Care saw low single-digit growth while major accounts sales were down mid-single digits |
| During 2023, we anticipated 60 basis points of deleverage related to our planned investments in team members and increased spending in technology, both of which came in line with our expectations |
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