Genuine Parts Company delivered a solid top-line performance in Q3 2025, with revenue of $6.26 billion, up 4.86% year over year and 1.55% sequentially. Gross profit rose 6.5% YoY to approximately $2.341 billion, translating to a gross margin of 37.40%. However, operating income and net income declined versus the prior year period, with operating income down 7.9% YoY and 20.9% QoQ to about $334.3 million, and net income down 0.18% YoY to $226.2 million (QoQ -11.3%). Diluted earnings per share were $1.62, up from prior limitations but down 10.9% QoQ to $1.63 (reported). This combination indicates a margin headwind despite healthier top-line growth, underscoring ongoing cost dynamics and mix effects within the portfolio.
The company maintains a strong balance sheet and cash flow profile, supported by an interest-coverage ratio of 8.29x and a payout ratio around 63.3%, with free cash flow per share of $1.73 and cash per share of $3.10. Liquidity is adequate but not overwhelming (current ratio 1.14, quick ratio 0.51; cash ratio 0.05). The working capital cycle remains elongated (days of inventory ~135; days of receivables ~38; days payable ~140; cash conversion cycle ~33 days), reflecting a capital-intensive distribution business with substantial inventory and supplier terms.
Strategically, Genuine Parts benefits from a diversified revenue base across Automotive Parts Group and Industrial Parts Group, scale advantages in North America and select international markets, and a track record of dividend discipline. Near-term performance will hinge on managing cost inflation, optimizing portfolio mix, and sustaining cash flow generation to fund dividends and potential buybacks, while pursuing opportunities in higher-growth aftermarket categories and international expansion.