GENUINE PARTS CO
For the period ended Sep 30, 2026. Filed Oct 20, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 20, 2026
GPC$122.80-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-21.
0000040987-26-000033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-20.
0000040987-26-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 107 current paragraphs.
53 unchanged; 49 reworded; 4 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
2025, respectively. The rate decreases in both periods were primarily driven by renewable energy investments tax credits, tax benefits associated with foreign tax credits, as well as the impact of the mix of foreign and domestic income.
Current report
North America Automotive EBITDA increased $15 million, or 2.8% for the nine months ended September 30, 2026 driven by the following factors. North America Automotive segment sales grew $247 million, or 3.4%, driven by a 2.2% increase in comparable sales and a 1.3% benefit from acquisitions. Gross profit increased $92 million or 3.3%, primarily due to higher sales and benefits from our pricing and sourcing initiatives. Operating expenses increased $77 million due to continued inflationary pressures in freight, healthcare, wages and rent expenses. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Current report
For the three months ended September 30, 2026, EBITDA margin was flat at 9.0% compared to the prior year period. Our gross margin increased 130 basis points, primarily driven by higher sales and benefits from our pricing and sourcing initiatives. These gains were offset by higher fuel and freight costs associated with the conflict in the Middle East, which resulted in reduced expense leverage during the period.
Current report
For the nine months ended September 30, 2026, EBITDA margin decreased 30 basis points to 9.2% from 9.5% compared to the prior year period. The decline primarily reflects higher fuel and freight costs associated with the conflict in the Middle East, which resulted in reduced expense leverage during both periods. Our higher sales and benefits from our pricing and sourcing initiatives drove an increase of 40 basis points in gross margin that partially offset the increase in operating expenses.
Removed paragraphs (4)
Previous report
Adjusted net income was $296 million for the three months ended June 30, 2026, an increase of 1.5% compared to the same prior year period. On a per share basis, adjusted net income was $2.15, an increase of 2.4% compared to $2.10 in the same prior year period.
Previous report
North America Automotive EBITDA increased $21 million, or 6.1% for the six months ended June 30, 2026 driven by the following factors. North America Automotive segment sales grew $191 million, or 4.1%, driven by a 2.4% increase in comparable sales, a 1.4% benefit from acquisitions, and a 0.3% favorable impact from foreign currency and other. Gross profit increased $72 million or 3.9%, primarily due to higher sales and benefits from our pricing and sourcing initiatives. Operating expenses increased $51 million due to continued inflationary pressures. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous report
For the three months ended June 30, 2026, EBITDA margin decreased 20 basis points to 9.4% from 9.6% compared to the prior year period. For the six months ended June 30, 2026, EBITDA margin decreased 50 basis points to 9.3% from 9.8% compared to the prior year period. The decline primarily reflects higher fuel and freight costs associated with the conflict in the Middle East, which resulted in reduced expense leverage during both periods. Gross margin was flat for the three months period and declined 20 basis points for the six months period, primarily due to the impact of businesses acquired after the second quarter of 2025 that operate at a slightly lower gross margin for the six month period. These impacts were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous report
As of June 30, 2026, total liquidity was $2.3 billion, consisting of $559 million in cash, $500 million available under the Delayed Draw Loan Facility, and $1.2 billion of available capacity under the company's $2.0 billion
Reworded paragraphs (49)
Previous wording
The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results for the year ended December 31, 2026.
Current wording
The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of results for the year ended December 31, 2026.
Previous wording
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including persistent inflation (including the direct and indirect impact of tariffs and retaliatory tariffs) or deflation, geopolitical uncertainty and unrest (including from the conflict involving the United States and Iran) and declining consumer confidence; our ability to successfully implement the separation of Global Automotive and Global Industrial and achieve the anticipated benefits of such transaction; volatility in oil prices; significant costs, such as elevated fuel and freight expenses; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our three business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to global trade regulations, environmental and social policy, infrastructure programs and privacy legislation and related uncertainties, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in its disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; disruptions caused by a failure or breach of our information systems; the success of our global restructuring efforts and the annualized cost savings arising therefrom, as well as other risks and uncertainties discussed in our 2025 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.
Current wording
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including persistent inflation (including the direct and indirect impact of tariffs and retaliatory tariffs) or deflation, geopolitical uncertainty and unrest (including from the conflict involving the United States and Iran) and declining consumer confidence; our ability to successfully implement the separation of Global Automotive and Global Industrial and achieve the anticipated benefits of such transaction; volatility in oil prices; significant costs, such as elevated fuel and freight expenses; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our three business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to global trade regulations, environmental and social policy, infrastructure programs and privacy legislation and related uncertainties, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; disruptions caused by a failure or breach of our information systems; the success of our global restructuring efforts and the annualized cost savings arising therefrom, as well as other risks and uncertainties discussed in our 2025 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.
Previous wording
For the six months ended June 30, 2026, we conducted business in North America, Europe and Australasia from more than 10,800 locations. Our Automotive businesses operated in the U.S., Canada, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand and accounted for 63% of total revenues for the six months ended June 30, 2026. Our Industrial business operated in the U.S.,
Current wording
For the nine months ended September 30, 2026, we conducted business in North America, Europe and Australasia from more than 10,800 locations. Our Automotive businesses operated in the U.S., Canada, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand and accounted for 63% of total revenues for the nine months ended September 30, 2026. Our Industrial business operated in the U.S., Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues during this period.
Previous wording
We are closely monitoring geopolitical tensions in the Middle East, including the ongoing conflict involving the United States and Iran, and related regional instability. The conflict has and could continue to lead to significant disruption of fuel and energy supplies and increases in global fuel prices, heightened inflationary pressures, disruptions in global supply chains and adverse impacts on customer spending patterns. While we have no operations in the Middle East, the increase in fuel and related supply chain costs attributable to the conflict together with their effects on customer spending negatively impacted income before income taxes by approximately $20 million during the three months ended June 30, 2026, primarily in our International Automotive segment. We continue to evaluate and take actions to mitigate any impacts on our business, results of operations and financial condition. The long-term effects of the conflict remain uncertain.
Current wording
We are closely monitoring geopolitical tensions in the Middle East, including the ongoing conflict involving the United States and Iran, and related regional instability. The conflict has and could continue to lead to significant disruption of fuel and energy supplies and increases in global fuel prices, heightened inflationary pressures, disruptions in global supply chains and adverse impacts on customer spending patterns. While we have no operations in the Middle East, we did experience an increase in fuel and related supply chain costs attributable to the conflict, including higher freight costs, primarily in our International Automotive segment. We continue to evaluate and take actions to mitigate any impacts on our business, results of operations and financial condition. The ongoing effects of the conflict remain uncertain.
Previous wording
We continue to monitor the global trade environment, including tariffs on merchandise inventories sourced directly or indirectly from several countries, such as China, Canada, and Mexico, and their impact on our operations. During the six months ended June 30, 2026, tariffs continued to drive higher product costs and customer pricing, impacting our gross margin and SG&A expenses. We continue to manage these challenges through strategic pricing and sourcing initiatives, leveraging global supplier relationships and technology tools.
Current wording
We continue to monitor the global trade environment, including tariffs on merchandise inventories sourced directly or indirectly from several countries, such as China, Canada, and Mexico, and their impact on our operations. During the nine months ended September 30, 2026, tariffs continued to drive higher product costs and customer pricing, impacting our gross margin and SG&A expenses. We continue to manage these challenges through strategic pricing and sourcing initiatives, leveraging global supplier relationships and technology tools.
Previous wording
On February 20, 2026, the U.S. Supreme Court issued a decision invalidating certain tariffs imposed under the International Emergency Economic Powers Act. The financial impact of this ruling remains subject to ongoing administrative processes, including the extent and timing of refunds from U.S. Customs and Border Protection ("CBP"). Our exposure as the importer of record represents less than 0.5% of our total purchases. During the second quarter of 2026, we submitted refund claims related to these tariffs. The claims submitted and refunds received through June 30, 2026 were not material to our condensed consolidated financial statements. While we continue to take steps to manage tariff-related cost pressures, these actions may not fully offset increased costs in future periods.
Current wording
On February 20, 2026, the U.S. Supreme Court issued a decision invalidating certain tariffs imposed under the International Emergency Economic Powers Act. The financial impact of this ruling remains subject to ongoing administrative processes, including the extent and timing of refunds from U.S. Customs and Border Protection ("CBP"). Our exposure as the importer of record represents less than 0.5% of our total purchases. Subsequent to the ruling, we submitted refund claims related to these tariffs. The claims submitted and refunds received through September 30, 2026 were not material to our condensed consolidated financial statements. While we continue to take steps to manage tariff-related cost pressures, these actions may not fully offset increased costs in future periods.
Previous wording
Our second quarter performance continued to reflect solid sales across our business segments and benefits from our global restructuring initiatives, despite a challenging operating environment. Net sales increased 6.0%, with comparable sales growth across all segments, along with contributions from acquisitions and foreign currency. Additionally, comparable sales growth sequentially improved from the first quarter across all segments. During the second quarter, we incurred additional restructuring and other costs and costs associated with our separation, which contributed to a 10.7% decline in net income. Excluding these items, adjusted net income increased 1.5%, driven by higher gross profit from increased sales, pricing and sourcing initiatives, and benefits from our global restructuring program.
Current wording
Our third quarter performance continued to reflect solid sales across our business segments and benefits from our global restructuring initiatives, despite a challenging operating environment. Net sales increased 4.2%, with comparable sales growth across all segments, along with contributions from acquisitions and foreign currency. During the third quarter, we incurred restructuring and other costs and costs associated with our planned separation, which contributed to a 0.8% decline in net income. Excluding these items, adjusted net income increased 3.8%, driven by higher gross profit from increased sales, pricing and sourcing initiatives, and benefits from our global restructuring program.
Previous wording
Our results of operations are summarized below for the three and six months ended June 30, 2026 and 2025.
Current wording
Our results of operations are summarized below for the three and nine months ended September 30, 2026 and 2025.
Previous wording
For the three months ended June 30, 2026, net sales increased 6.0% compared to 2025. The increase was driven by a 3.4% increase in comparable sales, a 1.4% benefit from favorable impact of foreign currency and other, and a 1.2% benefit from acquisitions.
Current wording
For the three months ended September 30, 2026, net sales increased 4.2% compared to 2025. The increase was driven by a 2.9% increase in comparable sales, a 0.9% benefit from acquisitions, and a 0.5% benefit from favorable impact of foreign currency and other.
Previous wording
For the six months ended June 30, 2026, net sales increased 6.4% compared to 2025. We experienced a 2.9% increase in comparable sales, a 2.3% benefit from favorable impact of foreign currency and other, and a 1.2% benefit from acquisitions.
Current wording
For the nine months ended September 30, 2026, net sales increased 5.6% compared to 2025. We experienced a 2.9% increase in comparable sales, a 1.7% benefit from favorable impact of foreign currency and other, and a 1.1% benefit from acquisitions.
Previous wording
Net sales for the three months ended June 30, 2026, for North America Automotive were $2.5 billion, an increase of 3.8% from 2025. The increase is primarily attributable to a 2.6% increase in comparable sales and a 1.3% increase from acquisitions.
Current wording
Net sales for the three months ended September 30, 2026, for North America Automotive were $2.5 billion, an increase of 2.2% from 2025. The increase is primarily attributable to a 1.7% increase in comparable sales and a 1.1% increase from acquisitions, offset by a 0.6% unfavorable impact of foreign currency and other.
Previous wording
Net sales for the six months ended June 30, 2026, for North America Automotive were $4.9 billion, an increase of $191 million from 2025. The increase is primarily attributable to a 2.4% increase in comparable sales, a 1.4% increase from acquisitions and a 0.3% favorable impact from foreign currency and other.
Current wording
Net sales for the nine months ended September 30, 2026, for North America Automotive were $7.4 billion, an increase of $247 million, or 3.4%, from 2025. The increase is primarily attributable to a 2.2% increase in comparable sales and a 1.3% increase from acquisitions. Impacts from foreign currency and other were relatively flat.
Previous wording
Net sales for the three months ended June 30, 2026 for International Automotive were $1.6 billion, an increase of 8.2% from 2025. The increase is attributable to a 4.9% favorable foreign exchange impact, a 2.7% increase from acquisitions and a 0.6% increase in comparable sales.
Current wording
Net sales for the three months ended September 30, 2026 for International Automotive were $1.6 billion, an increase of 4.5% from 2025. The increase is attributable to a 1.7% increase from acquisitions, 1.7% favorable foreign exchange impact, and a 1.1% increase in comparable sales.
Previous wording
Net sales for the six months ended June 30, 2026 for International Automotive were $3.2 billion, an increase of 10.7% from 2025. The increase is attributable to a 7.8% favorable foreign exchange impact, a 2.5% increase from acquisitions and a 0.4% increase in comparable sales.
Current wording
Net sales for the nine months ended September 30, 2026 for International Automotive were $4.7 billion, an increase of 8.5% from 2025. The increase is attributable to a 5.5% favorable foreign exchange impact, a 2.1% increase from acquisitions and a 0.9% increase in comparable sales.
Previous wording
Net sales for the three months ended June 30, 2026 for Industrial were $2.4 billion, an increase of 7.1% compared to 2025. The increase in sales primarily reflects a 6.1% increase in comparable sales and a 0.8% favorable impact from foreign currency.
Current wording
Net sales for the three months ended September 30, 2026 for Industrial were $2.4 billion, an increase of 6.1% compared to 2025. The increase in sales primarily reflects a 5.5% increase in comparable sales and a 0.5% favorable impact from foreign exchange.
Previous wording
Net sales for the six months ended June 30, 2026 for Industrial were $4.7 billion, an increase of 6.2% compared to 2025. The increase in sales primarily reflects a 5.0% increase in comparable sales and a 1.0% favorable impact from foreign currency.
Current wording
Net sales for the nine months ended September 30, 2026 for Industrial were $7.1 billion, an increase of 6.1% compared to 2025. The increase in sales primarily reflects a 5.1% increase in comparable sales and a 0.8% favorable impact from foreign exchange.
Previous wording
During the second quarter of 2026, economic activity in the U.S. manufacturing sector, measured by PMI, marked its strongest monthly expansions since May 2022, supporting sales demand in our Industrial segment.
Current wording
During the third quarter of 2026, economic activity in the U.S. manufacturing sector, measured by PMI, continued its run of expansion, with eight of the first nine months of 2026 reflecting expansion; supporting sales demand in our Industrial segment.
Previous wording
Gross profit increased $146 million, or 6.3%, with gross margin increasing approximately 10 basis points to 37.8% during the three months ended June 30, 2026, compared to the same prior year period. Gross profit increased $312 million, or 6.9%, with gross margin increasing approximately 20 basis points to 37.6% during the six months ended June 30, 2026, compared to the same prior year period. The increases in gross profit are primarily driven by increased sales, and our margin expansion reflects our ongoing pricing and sourcing initiatives, partially offset by the impact of tariffs and Middle East conflict-driven inflation in product costs.
Current wording
Gross profit increased $143 million, or 6.1%, with gross margin increasing approximately 70 basis points to 38.1% during the three months ended September 30, 2026, compared to the same prior year period. Gross profit increased $454 million, or 6.6%, with gross margin increasing approximately 30 basis points to 37.7% during the nine months ended September 30, 2026, compared to the same prior year period. The increases in gross profit are primarily driven by increased sales, and our margin expansion reflects our ongoing pricing and sourcing initiatives, partially offset by the impact of tariffs and Middle East conflict-driven inflation in product costs.
Previous wording
SG&A expenses increased $146 million, or 8.3%, during the three months ended June 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 60 basis points.
Current wording
SG&A expenses increased $139 million, or 7.7%, during the three months ended September 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 100 basis points.
Previous wording
SG&A expenses increased $293 million, or 8.4%, during the six months ended June 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 60 basis points.
Current wording
SG&A expenses increased $432 million, or 8.2%, during the nine months ended September 30, 2026 compared to the same prior year period, and, as a percentage of sales, increased 70 basis points.
Previous wording
SG&A expenses increased in both periods primarily due to higher salaries and wages, freight, healthcare, rent, and IT costs, as well as additional operating expenses associated with recent acquisitions. In addition, SG&A expenses increased due to foreign currency exchange impacts of approximately $30 million and $100 million for the three and six months ended June 30, 2026, respectively. We also incurred costs of $16 million and $34 million related to the planned separation of our Global Automotive and Global Industrial businesses for the three and six months ended June 30, 2026, respectively. Our global restructuring initiatives provided a 30 basis point benefit to SG&A for both the three and six months ended June 30, 2026.
Current wording
SG&A expenses increased in both periods primarily due to higher salaries and wages, freight, healthcare, rent, and IT costs, as well as additional operating expenses associated with recent acquisitions. In addition, SG&A expenses increased due to foreign currency exchange impacts of approximately $10 million and $110 million for the three and nine months ended September 30, 2026, respectively. We also incurred costs of $21 million and $55 million related to the planned separation of our Global Automotive and Global Industrial businesses for the three and nine months ended September 30, 2026, respectively.
Previous wording
As a percentage of net sales, SG&A increased approximately 60 basis points for both the three and six month period primarily due to inflationary pressures on freight, healthcare, rent, ongoing planned investments in technology, and separation costs. In response to ongoing inflationary cost pressures, during the six months ended June 30, 2026, we implemented targeted cost-control initiatives, including reductions in discretionary travel, limited merit-based compensation adjustments in certain regions, and the strategic deferral of select technology and other projects. As a result of some of these actions, salaries and wages as a percentage of net sales during the three and six month periods were roughly flat.
Current wording
As a percentage of net sales, SG&A increased approximately 100 basis points for the three month period and approximately 70 basis points for the nine-month period primarily due to inflationary pressures on freight, healthcare, rent, ongoing planned investments in technology, and separation costs. Separation costs contributed 30 basis points of the SG&A increase as a percentage of net sales for the three and nine months ended September 30, 2026.
Previous wording
As part of our global restructuring plan, which was approved and initiated in February 2024, we incurred $71 million and $129 million associated with facility closures and additional severance costs during the three and six months ended June 30, 2026, respectively. For additional details, refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements.
Current wording
As part of our global restructuring plan, which was approved and initiated in February 2024, we incurred $65 million and $193 million associated with facility closures and additional severance costs during the three and nine months ended September 30, 2026, respectively. For additional details, refer to the Restructuring and Other Costs Footnote in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Depreciation and amortization expenses increased $12 million and $27 million for the three and six months ended June 30, 2026, respectively, related to planned investments in technology and supply chain initiatives.
Current wording
Depreciation and amortization expenses increased $10 million and $37 million for the three and nine months ended September 30, 2026, respectively, related to planned investments in technology and supply chain initiatives.
Previous wording
We incurred $43 million in net non-operating expense during the second quarter of 2026, a $4 million change from $38 million in net non-operating expense in the prior year period. We incurred $83 million in net non-operating expense during the six months ended June 30, 2026, a $9 million change from $75 million in net non-operating expense in the prior year period. This category primarily includes net interest expense, investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").
Current wording
We incurred $50 million in net non-operating expense during the third quarter of 2026, a $7 million change from $43 million in net non-operating expense in the prior year period. We incurred $133 million in net non-operating expense during the nine months ended September 30, 2026, a $16 million change from $117 million in net non-operating expense in the prior year period. This category primarily includes net interest expense, investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement").
Previous wording
Our effective income tax rates were 22.6% and 24.7% for three months ended June 30, 2026 and 2025, respectively. Our effective income tax rates were 22.8% and 23.9% for six months ended June 30, 2026 and 2025, respectively. The rate decreases for both periods are primarily due to domestic investment tax credits, partially offset by reduced tax benefits related to our share-based compensation.
Current wording
Our effective income tax rates were 19.5% and 22.5% for three months ended September 30, 2026 and 2025, respectively. Our effective income tax rates were 21.7% and 23.4% for nine months ended September 30, 2026 and
Previous wording
Net income was $228 million for the three months ended June 30, 2026, a decrease of 10.7% compared to $255 million during the second quarter of 2025. Diluted earnings per share ("EPS") was $1.65 for the second quarter of 2026, down $0.18 compared to $1.83 during the prior year period.
Current wording
Net income was $224 million for the three months ended September 30, 2026, a decrease of 0.8% compared to $226 million during the third quarter of 2025. Diluted earnings per share ("EPS") was $1.62 for the third quarter of 2026, unchanged compared to $1.62 during the prior year period.
Previous wording
Net income was $416 million for the six months ended June 30, 2026, a decrease of 7.4% compared to $449 million during the same prior year period. Diluted earnings per share ("EPS") was $3.01 for the six months ended June 30, 2026, down 6.8% compared to $3.23 during the same prior year period.
Current wording
Net income was $641 million for the nine months ended September 30, 2026, a decrease of 5.2% compared to $675 million during the same prior year period. Diluted earnings per share ("EPS") was $4.64 for the nine months ended September 30, 2026, down 4.3% compared to $4.85 during the same prior year period.
Previous wording
Adjusted net income was $541 million for the six months ended June 30, 2026, an increase of 1.1% compared to the same prior year period. On a per share basis, adjusted net income was $3.92, an increase of 2.1% compared to $3.84 in the same prior year period. Adjusted net income increased primarily due to gross profit increases from sales growth and pricing and sourcing initiatives, and benefits from our global restructuring program and cost actions, which are discussed above in more detail.
Current wording
Adjusted net income was $286 million for the three months ended September 30, 2026, an increase of 3.8% compared to the same prior year period. On a per share basis, adjusted net income was $2.07, an increase of 4.5% compared to $1.98 in the same prior year period. Adjusted net income was $827 million for the nine months ended September 30, 2026, an increase of 2.0% compared to the same prior year period. On a per share basis, adjusted net income was $5.99, an increase of 2.9% compared to $5.82 in the same prior year period. Adjusted net income increased in both periods primarily due to gross profit increases from sales growth, our pricing and sourcing initiatives, and benefits from our global restructuring program and cost actions, which are discussed above in more detail.
Previous wording
North America Automotive EBITDA increased $12 million, or 6.0% for the three months ended June 30, 2026, driven by the following factors. North America Automotive segment sales grew $93 million, or 3.8%, primarily driven by a 2.6% increase in comparable sales and a 1.3% benefit from acquisitions. Gross profit increased $32 million, or 3.3%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives. Operating expenses increased $20 million due to continued inflationary pressures. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Current wording
North America Automotive EBITDA decreased $6 million, or 2.9% for the three months ended September 30, 2026, driven by the following factors. North America Automotive segment sales grew $56 million, or 2.2%, primarily driven by a 1.7% increase in comparable sales and a 1.1% benefit from acquisitions. Gross profit increased $20 million, or 2.1%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives. Operating expenses increased $26 million due to continued inflationary pressures in freight, healthcare, wages and rent expenses. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous wording
For the three months ended June 30, 2026, EBITDA margin improved 20 basis points to 8.2% from 8.0% compared to the prior year period. For the six months ended June 30, 2026, EBITDA margin improved 10 basis points to 7.4% from 7.3% compared to the prior year period. Our margin expansion in both periods was driven by the benefits of disciplined headcount management and our on-going cost control initiatives which improved operating expense leverage on higher sales volumes, despite continued inflationary pressures and incremental expenses associated with acquired businesses. These improvements more than offset the slight contraction in gross margin in both periods, primarily due to the impact of businesses acquired after the second quarter of 2025 that operate at slightly lower gross margins.
Current wording
For the three months ended September 30, 2026, EBITDA margin decreased 40 basis points to 7.6% from 8.0% compared to the prior year period. Our margin compression was largely driven by continued inflationary pressures and incremental expenses associated with acquired businesses, coupled with slight contraction in gross margin, primarily due to the impact of businesses acquired after the third quarter of 2025 that operate at slightly lower gross margins. For the nine months ended September 30, 2026, EBITDA margin was flat at 7.5% compared to the prior year period.
Previous wording
International Automotive EBITDA increased $8 million, or 6.0% for the three months ended June 30, 2026 driven by the following factors. International Automotive segment sales grew $120 million, or 8.2%, driven by a 4.9% benefit from favorable foreign currency exchange, a 2.7% contribution from acquisitions, and a 0.6% increase in comparable sales. Gross profit increased $55 million, or 8.1%, in-line with the increase in sales. Operating expenses increased $47 million due to continued inflationary pressures impacting personnel costs, rent and freight. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Current wording
International Automotive EBITDA increased $6 million, or 4.7% for the three months ended September 30, 2026 driven by the following factors. International Automotive segment sales grew $67 million, or 4.5%, driven by a 1.7% benefit from favorable foreign currency exchange and a 1.7% contribution from acquisitions, and a 1.1% increase in comparable sales. Gross profit increased $52 million, or 7.6%, primarily impacted by higher sales and the positive impact on our pricing and sourcing initiatives. Operating expenses increased $46 million due to continued inflationary pressures impacting personnel costs, rent and freight. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous wording
International Automotive EBITDA increased $15 million, or 5.3% for the six months ended June 30, 2026 driven by the following factors. International Automotive segment sales grew $306 million, or 10.7%, driven by a 7.8% benefit from favorable foreign currency exchange, a 2.5% contribution from acquisitions, and a 0.4% increase in comparable sales. Gross profit increased $135 million, or 10.2%, in-line with the increase in sales. Operating expenses increased $120 million driven primarily by inflationary pressures impacting personnel costs, rent and freight. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Current wording
International Automotive EBITDA increased $21 million, or 5.1% for the nine months ended September 30, 2026 driven by the following factors. International Automotive segment sales grew $373 million, or 8.5%, driven by a 5.5% benefit from favorable foreign currency exchange, a 2.1% contribution from acquisitions, and a 0.9% increase in comparable sales. Gross profit increased $187 million, or 9.3%, in-line with the increase in sales. Operating expenses increased $165 million driven primarily by inflationary pressures impacting personnel costs, rent and freight. These cost pressures were partially offset by the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous wording
Industrial EBITDA increased $28 million, or 9.8%, for the three months ended June 30, 2026 driven by the following factors. Industrial segment sales increased by $159 million or 7.1%, for the three months ended June 30, 2026, primarily driven by a 6.1% increase in comparable sales and a 0.8% favorable impact of foreign currency. Gross profit increased $65 million, or 9.4%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives.
Current wording
Industrial EBITDA increased $32 million, or 11.2%, for the three months ended September 30, 2026 driven by the following factors. Industrial segment sales increased by $138 million or 6.1%, for the three months ended September 30, 2026, primarily driven by a 5.5% increase in comparable sales and a 0.5% positive impact from foreign currency. Gross profit increased $71 million, or 10.4%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives.
Previous wording
Industrial EBITDA increased $64 million, or 11.2%, for the six months ended June 30, 2026 driven by the following factors. Industrial segment sales increased by $275 million, or 6.2%, for the six months ended June 30, 2026, primarily driven by a 5.0% increase in comparable sales and a 1.0% favorable impact of foreign currency. Gross profit increased $110 million, or 8.2%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives.
Current wording
Industrial EBITDA increased $96 million, or 11.2%, for the nine months ended September 30, 2026 driven by the following factors. Industrial segment sales increased by $413 million, or 6.1%, for the nine months ended September 30, 2026, primarily driven by a 5.1% increase in comparable sales and a 0.8% positive impact from foreign currency. Gross profit increased $182 million, or 8.9%, primarily driven by higher sales and benefits from our pricing and sourcing initiatives.
Previous wording
For the three months ended June 30, 2026, EBITDA margin improved 30 basis points to 13.1% from 12.8% compared to the prior year period. For the six months ended June 30, 2026, EBITDA margin improved 60 basis points to 13.3% from 12.7% compared to the prior year period. Our margin expansion in both periods was driven by the benefits our strategic pricing and sourcing initiatives which drove gross margin expansion of 70 and 50 basis points for the three and six month periods, respectively, and the continued benefits of our global restructuring and disciplined cost control initiatives.
Current wording
For the three months ended September 30, 2026, EBITDA margin improved 60 basis points to 13.2% from 12.6% compared to the prior year period. For the nine months ended September 30, 2026, EBITDA margin improved 60 basis points to 13.3% from 12.7% compared to the prior year period. Our margin expansion in both periods was driven by the benefits our strategic pricing and sourcing initiatives which drove gross margin expansion of 120 and 80 basis points for the three and nine month periods, respectively, and the continued benefits of our global restructuring and disciplined cost control initiatives.
Previous wording
Corporate EBITDA amounted to losses of $108 million, or 1.6% of net sales, and $227 million, or 1.8% of net sales, for the three months ended June 30, 2026 and six months ended June 30, 2026, respectively, compared to losses of $79 million, or 1.3% of net sales, and $170 million, or 1.4% of net sales, in the prior year periods. The increased losses were primarily driven by inflationary pressures impacting personnel costs and health insurance.
Current wording
Corporate EBITDA amounted to losses of $104 million, or 1.6% of net sales, and $331 million, or 1.7% of net sales, for the three months ended September 30, 2026 and nine months ended September 30, 2026, respectively, compared to losses of $93 million, or 1.5% of net sales, and $263 million, or 1.4% of net sales, in the prior year periods. The increased losses were primarily driven by inflationary pressures impacting personnel costs and health insurance.
Previous wording
Other unallocated costs for both periods represent restructuring and other costs, separation costs, and acquisition and integration related costs and other. For the six months ended June 30, 2026, we incurred $134 million of restructuring and other costs and $34 million of separation costs.
Current wording
Other unallocated costs for both periods represent restructuring and other costs, separation costs, and acquisition and integration related costs and other. For the nine months ended September 30, 2026, we incurred $193 million of restructuring and other costs and $55 million of separation costs.
Previous wording
EBITDA was $474 million for the second quarter of 2026, a decrease of 5.5% from $502 million during the same prior year period. Adjusted EBITDA was $567 million in the second quarter of 2026, an increase of 3.6% from $547 million during the same prior year period. The increase in adjusted EBITDA was primarily driven by improved segment operating performance and continued execution of strategic pricing, sourcing, and cost control initiatives
Current wording
EBITDA was $462 million for the third quarter of 2026, an increase of 0.6% from $460 million during the same prior year period. Adjusted EBITDA was $549 million in the third quarter of 2026, an increase of 4.2% from $526 million during the same prior year period. The increase in adjusted EBITDA was primarily driven by improved segment operating performance and continued execution of strategic pricing, sourcing, and cost control initiatives.
Previous wording
EBITDA was $895 million for the six months ended June 30, 2026, a decrease of 1.3% from $906 million during the same prior year period. Adjusted EBITDA was $1.1 billion for the six months ended June 30, 2026, an increase of 4.1% from $1.0 billion during the same prior year period. The increase in adjusted EBITDA reflects higher segment EBITDA across North America Automotive, International Automotive and Industrial, supported by comparable sales growth, acquisition contributions, strategic pricing actions and benefits from our global restructuring and cost initiatives.
Current wording
EBITDA was $1.4 billion for the nine months ended September 30, 2026, a decrease of 0.6% from $1.4 billion during the same prior year period. Adjusted EBITDA was $1.6 billion for the nine months ended September 30, 2026, an increase of 4.2% from $1.5 billion during the same prior year period. The increase in adjusted EBITDA reflects higher segment EBITDA across North America Automotive, International Automotive and Industrial, supported by comparable sales growth, acquisition contributions, strategic pricing actions and benefits from our global restructuring and cost initiatives.
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Current report — wording carried from elsewhere
In response to ongoing inflationary cost pressures, during the nine months ended September 30, 2026, we continued our targeted cost-control initiatives, including reductions in discretionary travel and the strategic deferral of select technology and other projects.
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Previous report — wording carried elsewhere
Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 37% of total revenues during this period.