Good day, ladies and gentlemen. Welcome to the Genuine Parts Company Second Quarter 2022 Earnings Conference Call. Today's call is being recorded. If you need assistance, please signal a conference specialist by pressing star then zero. A question-and-answer session will follow the presentation, and instructions will be given at that time. At this time, I would like to turn the conference over to Sid Jones, Senior Vice President, Investor Relations. Please go ahead, sir. Good morning, and thank you for joining us today for the Genuine Parts Company Second Quarter 2022 Earnings Conference Call. With me today are Paul Donahue, our Chairman and Chief Executive Officer, Will Stengel, our President, and Bert Nappier, our Executive Vice President and Chief Financial Officer. As a reminder, today's conference call and webcast include a slide presentation that can be found on the Genuine Parts Company Investor Relations website. Please be advised, this call may include certain non-GAAP financial measures which may be referred to during today's discussion of our results as reported under generally accepted accounting principles. A reconciliation of these measures is provided in the earnings press release issued this morning, which is also posted in the investor section of our website. Today's call may also involve forward-looking statements regarding the company and its businesses. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest SEC filing, including this morning's press release. The company assumes no obligation to update any forward-looking statements made during this call. Now, I'll turn the call over to Paul for his remarks. Thank you, Sid, and good morning. Welcome to our second quarter 2022 earnings conference call. As Sid mentioned, I'm here with Will, as well as Bert, who is on his first earnings call as CFO. Welcome to the call, Bert. We are pleased to report continued strong results from Genuine Parts Company in the second quarter of 2022. The GPC team had another record quarter consisting of double-digit sales and earnings increases and a steady cadence of continued growth throughout April, May, and June. Total sales were $5.6 billion, up 17%, and adjusted earnings per share was $2.20, up 26% from last year. We continue to benefit from the resiliency of our automotive and industrial businesses and the strategic mix of our operations. We would like to thank our 53,000 talented GPC teammates for their exceptional work and commitment to excellence. A few highlights in the quarter include another quarterly sales record for GPC and our automotive and industrial segments. Segment operating margin expansion in both segments and for GPC overall. Record quarterly earnings and double-digit EPS growth for the eighth consecutive quarter, and strong cash flow generation and the further strengthening of our balance sheet. We continue to execute our key strategic initiatives to deliver market share gains and drive positive momentum in our top and bottom line results despite ongoing macroeconomic pressures. Our teams are doing an excellent job of navigating supply chain disruptions, enabling our business with the product we need to serve our customers and capture market share. For example, we are investing in our businesses to enhance forecast accuracy for product demand, improve fill rates, and optimize our network footprint. Our size and global scale continue to be an advantage as we work to have the right part in the right place at the right time. Likewise, our pricing strategies have proven valuable in substantially offsetting product inflation and rising freight costs. Our M&A strategy has also been effective. As you will hear from Will, the accelerated integration of KDG has been executed with a high degree of precision and has had a meaningful impact on our industrial performance. In addition, our global automotive teams have been active with ongoing strategic bolt-on acquisitions, such as the addition of Knoll, which rounds out our national footprint in Germany, the largest economy in Europe. We continue to explore a healthy pipeline of acquisition targets, and M&A remains an important part of our global growth strategy. Additionally, we are benefiting from ongoing initiatives such as accelerating the rollout of the NAPA brand in international markets, as well as further investing in B2B and B2C omni-channel enhancements to both our catalog data and technology platforms. We also continue to upgrade our pricing and product category management strategies to further extend our leadership positions in the global automotive and industrial markets. As we look at the operating environment more broadly, our automotive and industrial business are benefiting from several tailwinds. The continued increase in miles driven and the average age of vehicles, limited new car inventory and elevated used car prices are supporting demand in the automotive aftermarket and driving continued strength in the DIFM segment. In industrial, PMI continues to signal manufacturing expansion, and industrial production showed gains again in the second quarter, representing the eighth consecutive quarter of growth. We are closely monitoring potential consumer headwinds, including the effect of historically high inflation and its impact on gas prices, freight, and wages. However, we will stay focused on our strategic initiatives and remain agile in the execution of our business on a day-to-day basis. The enthusiasm and momentum in our business was on full display last week when, for the first time in seven years, we hosted our 2022 NAPA EXPO in Las Vegas. This gathering brought together more than 15,000 global attendees, including NAPA AutoCare customers, independent NAPA store owners, NAPA store managers, key suppliers, and leaders across our operations. It was an extraordinary event packed with seminars, insights, business-building strategies, and an extensive trade show featuring our global suppliers and key business partners. We took the opportunity to introduce our new NAPA brand campaign, Get Up and Go, and you could feel the positive energy and excitement for the future of NAPA and the automotive aftermarket overall. The biggest takeaway is that the NAPA team in the U.S. and across the globe is well-positioned for the future. During the quarter, we also had the opportunity to spend time in the field with our Motion leadership team. We visited our operations and customers across the Midwest and saw firsthand the momentum in our industrial business and the progress of the KDG acquisition. As we mentioned in our last call, we have been active in 2022, building on our commitment to responsible ESG business practices. This has included formalizing our carbon emission reduction strategy, as well as driving continued progress in DE&I. We look forward to providing additional details on our progress in these areas later this year as we publish our 2022 Corporate Sustainability Report. Again, we thank each of our GPC teammates for taking great care of our customers and delivering another quarter of record results. Now, I'll turn the call over to Will. Thank you, Paul. Good morning, everyone. I'd also like to thank the global GPC teams as well as our supplier partners for their ongoing commitment to serving our customers. We appreciate the team effort and hard work to deliver great results around the world. During the second quarter, we built on solid momentum and delivered strong results across both our automotive and industrial businesses. Our results were driven by team execution and disciplined focus on strategic initiatives. We continue to align our initiatives around five foundational priorities, including talent and culture, sales effectiveness, technology, supply chain, and emerging technology. We'll highlight select initiative examples as we review the business performance. Turning to the performance details by segment, total sales for our global automotive segment were $3.5 billion in the second quarter, an increase of approximately $271 million or 8.5% versus the same period last year. Sales growth was relatively consistent in all three months of the quarter, and on a comparable basis, sales growth for the quarter was +8%. Our global teams delivered mid-single-digit to low double-digit comp growth across each of our operations. As Paul mentioned, the automotive segment continues to be driven by solid industry fundamentals and focused team execution. Global automotive segment profit was $323 million, and segment operating margin was 9.3%, representing a 20 basis point increase from the same period last year. The improvement in segment profit was driven by strong operating discipline across our operations, despite a dynamic environment. During the second quarter, our automotive business experienced slightly higher product cost inflation compared to the mid-single digit experienced in the first quarter. The pricing environment remains rational, and we're pleased with the ongoing positive impact of our category management initiatives. Looking ahead, we believe current levels of inflation will continue through the second half of 2022. Now, turning to an overview of our automotive businesses by geography. In the U.S., automotive sales grew approximately 11% during the quarter, with comparable sales growth of 7%. Sales were solid across each U.S. region and broadly across product categories, with brakes, filters, and fluids all posting double-digit increases in the quarter. We continue to be pleased with market share growth with many of our categories. Sales to both commercial and retail customers were positive, with low double-digit commercial growth outpacing retail, which moderated to mid-single digit growth as expected. Our commercial business, representing approximately 80% of U.S. auto sales, saw broad-based strength across all customer segments. Digital channels across all customers also performed well with low double-digit sales growth during the second quarter, reflecting continued traction from investments in our omni-channel experience. Other select U.S. initiative examples to highlight include the rollout of an enhanced Prolink, our B2B digital commerce platform, new sales and marketing programs, including the new NAPA Get Up and Go brand campaign, pricing and sourcing analytics, inventory and forecasting tools, and DC productivity initiatives to name just a few. In Canada, sales grew approximately 16% in local currency during the second quarter. Comparable sales were up 14% and up 26% on a two-year stack, reflective of the continued strength of the reopening of the Canadian market and solid team execution. To highlight an example of emerging technology initiatives, during the second quarter, we officially launched NexDrive in Canada. Originally launched in Europe in 2020, NexDrive is a program that enables our network of automotive service centers to repair next generation hybrids and EV vehicles. As part of this program, we partner with our vast service center network to offer product, training, tools and technology. We currently have over 100 NexDrive service centers in the European market, and we're excited to bring this offering to the Canadian market. Our Emerging Technology Council, comprised of global strategic partners, also continues to help inform and advance our strategies. In Europe, our automotive team delivered a terrific quarter as well, despite the dynamic geopolitical environment. Sales in Europe increased 19% in local currency in the second quarter. Comparable sales increased 7% for the quarter and are up more than 40% on a two-year stack basis. Growth continues to be driven by continued focus on strategic initiatives. Initiative highlights in Europe include new account expansion, continued NAPA rollout within and across the region, and technology and supply chain investments. The recent Lausan and Knoll acquisitions in Spain and Germany respectively are also exceeding our expectations, and we're encouraged by the opportunities we're working on to capture in these businesses. In the Asia Pac automotive business, sales in the second quarter increased 11% in local currency from last year. Comparable sales were up 8% from last year and up 26% on a two-year stack. Both commercial and retail sales performed well with Repco and NAPA growth driven by strong execution of complementary customer value propositions and robust demand. Our motorcycle accessories division also performed well, benefiting from ongoing store expansion. In addition, during the second quarter, our Asia Pac team completed the acquisition of STEDI, a leading Australian branded direct-to-consumer distributor of lighting products focused on the four-wheel drive market. The acquisition creates a differentiated product offering in a multibillion-dollar profitable high-growth segment in Australia and New Zealand. Turning to the global industrial segment. During the second quarter, total sales at Motion were $2.1 billion, an increase of approximately $547 million or 34.5%. The sales cadence was consistently strong throughout the quarter, and comparable sales, which exclude the benefit of KDG, increased 18% versus last year. This marks our fifth consecutive quarter of double-digit comparable growth, driven by the strong performance in our North American business. The strength in our North American industrial performance was broad-based, with double-digit sales growth across virtually all product categories and major industries served, with particular strength coming from equipment and machinery, aggregate and cement, and automotive customers. Industrial segment profit was $225 million, or 10.6% of sales, a new record for the industrial segment. This represents a 110 basis point increase from the same period last year. The improvement is a result of Motion's impressive growth and disciplined operating performance. For the second quarter, inflation in the industrial segment held in the low single-digit range, consistent with the levels we saw in the first quarter. The pricing environment remains rational, and we do not expect any significant shifts in product inflation in our industrial business through the balance of 2022. Select initiative highlights contributing to the strong performance in the industrial business include sales programs to capture profitable share of wallet with target accounts, data-driven strategic pricing and sourcing programs, technology investments to enhance the omnichannel experience, and inventory productivity and footprint optimization initiatives. As Paul mentioned, the KDG acquisition has added to the Motion team momentum. The teams are executing well-defined plans with customers, suppliers, and teammates to deliver growth and create value as a combined business. To provide a bit more commentary on the recent integration progress, the team successfully onboarded KDG associates to Motion HR programs, accelerated the realignment of functional support teams, integrated systems, and accelerated the co-location of overlapping branches. In addition, the team partnered with vendors to improve programs and product availability, utilized cross-functional field teams to sell services across shared customers, harmonized inventory strategies, and rebranded stores under the Motion banner. All major work streams are at or ahead of plan. We're extremely pleased with the momentum of the integration efforts and excited for the growth opportunities as one Motion team. As we execute on our global initiatives, we complement them with strategic bolt-on acquisitions to capture share in our fragmented markets and create shareholder value. The M&A pipeline continues to be active and we'll remain disciplined to pursue transactions that advance our strategy, deliver profitable growth and create long-term value. In summary, we had another terrific quarter, which resulted in record sales and profit for Genuine Parts Company. We acknowledge that the macro environment remains dynamic, but we learned as a team from the challenges presented by the pandemic. We continue to prioritize our customers as we analyze our business indicators, remain agile and strategically invest with discipline in initiatives that extend our global leadership positions. Thank you again to the entire GPC team for an exceptional quarter. With that, I'll turn the call over to Bert. Thank you, Will, and thanks to everyone for joining us today. As Paul and Will have shared, we had an excellent second quarter, and I'm pleased to walk you through the key highlights. Our comments this morning focus primarily on our adjusted quarterly results, which exclude non-recurring items that I will cover in more detail shortly. Total GPC sales were $5.6 billion in the second quarter, up $819 million or 17.1% from last year. Our increase in total sales reflects an 11.5% increase in comparable sales, including mid-single-digit inflation and an 8.8% contribution from acquisitions. These items were partially offset by a 3.3% unfavorable impact of foreign currency. Our gross margin was 35%, a 30 basis point decrease compared to the second quarter last year and in line with our expectations. Our gross margin in the second quarter was negatively impacted by headwinds from anticipated moderation in supplier incentives, foreign currency, and the timing of inflation in certain product categories. These headwinds were substantially offset by the ongoing favorable impact of strategic category management initiatives where we continue to leverage our growing global scale. As an example of our strategic initiatives in category management, our teams are utilizing technology, innovative data analytics and AI to forecast supply chain lead times and changes in market demand to ensure optimal inventory levels. These actions, along with our pricing initiatives, positively impacted our gross margin in the second quarter. For the full year, we expect our gross margin rate to be consistent with 2021 as we are relentlessly managing the impact of product and supplier price increases in our costs. Our total operating and non-operating expenses, excluding non-recurring items, were approximately $1.5 billion, up 15% from 2021 and at 27.6% of sales compared to 28.1% of sales in the prior year. We continue to leverage our expenses despite ongoing inflationary pressures across all costs, particularly in freight and shipping charges. Our teams remain focused on further reducing expenses and driving operational efficiencies across the business. With our strong performance, segment profit was $548 million, up 24% and our segment profit margin was 9.8%, a 60 basis point increase from last year and up 160 basis points from 2019. With a very challenging operating environment over the past few years, ranging from the pandemic to current inflationary dynamics, we are very proud of the work our teams have done to improve our segment margin over the last three years. As outlined in our earnings release, our second quarter results include two non-recurring items. The first item relates to the sale of S.P. Richards real estate, which generated $140 million in cash proceeds and resulted in a non-recurring gain of $103 million. The S.P. Richards properties sold this quarter were not divested with that business in 2020, and we are extremely pleased to monetize these assets and reinvest this capital across the GPC portfolio. In addition, during the second quarter, we incurred approximately $25 million of costs related to our KDG acquisition, including a non-cash impairment charge of $17 million for legacy Motion brand names that will no longer be used as a result of the acquisition of KDG. Our second quarter adjusted net income, which excludes $59 million or $0.42 per diluted share in the non-recurring items I just discussed, was $313 million or $2.20 per diluted share. This compares to adjusted net income of $253 million or $1.74 per diluted share in the prior year, an increase of 26%. This strong growth is indicative of the crisp execution of our initiatives to deliver accelerated growth and profitability. As we turn to our balance sheet, at June 30th, our total accounts receivable balances were up 18%, with inventory up 17% and both in line with the increase in sales. Likewise, accounts payable increased 14% from 2021, which correlates to the increase in inventory. We continue to generate strong cash flows with $392 million in cash from operations in the second quarter and $791 million for the six months, up 12% from last year. For the full year, we continue to expect cash from operations to be in the $1.5 billion-$1.7 billion range, with free cash flow of $1.2 billion-$1.4 billion. We closed the second quarter with $2 billion in available liquidity, and our debt to adjusted EBITDA is 1.8x. This is slightly below our targeted range of 2x-2.5 x and highlights our financial strength and flexibility. The key priorities for capital allocation at GPC remain unchanged. As a reminder, these included reinvestment in our business through capital expenditures and M&A, and the return of capital to our shareholders through dividends and share repurchases. During 2022, we have invested $153 million in capital expenditures, including $75 million in the second quarter, and continue to plan for additional strategic investments through the balance of the year. These investments are primarily in technology and projects to further automate and consolidate our distribution networks and drive productivity throughout the business. Beyond CapEx, during 2022, we have also invested $1.6 billion for acquisitions and returned $366 million to shareholders in the form of dividends and share repurchases. This includes $243 million in cash dividends paid to our shareholders and $123 million in cash to repurchase 943,000 shares. As a reminder, we have increased the annual dividend for 66 consecutive years. Turning to our current outlook for 2022, we are updating our full year guidance previously provided in our first quarter earnings release. We are raising adjusted diluted earnings per share to a range of $7.80-$7.95, which represents an increase of 13%-15% from 2021 and up from our previous guidance of $7.70-$7.85. Our revised EPS guidance includes an incremental headwind of approximately $0.08 due to foreign currency relative to the outlook we provided in April. We expect total sales growth for 2022 to be in a range of 12%-14%, an increase from 10%-12% previously. By business segment, we are guiding to the following: 6%-8% total sales growth for the Automotive segment, an increase from 5%-7% previously. The new outlook reflects 6%-8% comp sales growth consistent with our previous estimate. For the Industrial segment, we are updating our total sales outlook to 26%-28%, an increase from our previous outlook of 21%-23%. The new outlook includes a 9%-11% comp sales increase, which is up from 5%-7% previously. We've had an exceptional first half of 2022, boosted by our Industrial business and the success of our acquisition of KDG, along with solid global automotive results. Our outlook for the full year reflects our ongoing confidence in our businesses to execute on our strategies despite a dynamic and uncertain external landscape. Our continued strong cash flow generation also provides us with full flexibility to continue to invest in the business and return cash to our shareholders through our dividend. We look forward to reporting on our progress in our third quarter call in October. Thank you, and we will now turn it back to the operator for your questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Today's first question comes from Chris Horvers at JP Morgan. Please go ahead. Thanks. Good, thanks. Good morning, everybody. A few questions from a top-line perspective. Focusing first on the U.S. NAPA business, it's interesting to note that your DIY business was up. Some of your peers talked about a late spring impacting the start of the quarter. Can you give us a sense of how consistent that comp cadence was for that customer during the quarter? Moreover, as you think about quarter to date, what are you seeing in the U.S.? Walmart pre-announced earlier this week, talking about pressures on the low-end consumer, and some other companies have said that as well. Just curious if you're seeing any variation in the DIY side of the business in the U.S. Yeah, Chris, good morning. It's Will here. Let me take a crack, and Bert and Paul jump in if you have anything to add. As you alluded to, generally speaking, U.S. Automotive combined do it for me, do it yourself, consistent through the quarter on a monthly basis. I would say on the do it yourself side, we did see some moderation through the quarter, as we expected, based on year-over-year comparables. I would say that we're not reading into a softness in the customer based on what we're seeing in our data. I'm not sure that we have the same takeaway that perhaps some of your traditional retailers are reading through in terms of the health of the consumer. I would, Chris, just add on to that. You kinda asked about the current quarter. Pleased to report that U.S. Automotive continues to be in good shape. The trends we're seeing in July are very similar to what we saw in Q2. All is positive on the U.S. Automotive front. Just to double click on that a little bit, the DIY moderation was really just anniversary and stimulus from April of last year? We agree. Separately on the Motion business, Motion is doing incredibly well. One of your peers in the industrial parts distribution business talked about some signs of moderation as they saw their quarter progress and into the current quarter. Curious if you had any comments on that side as well. Yeah, Chris, similarly, we saw very consistent strength through the quarter. As Paul alluded to kind of early looks and commentary around July, we're seeing that continued strength coming out of the quarter as well as we had in our prepared remarks. We saw broad strength across all of our end markets. We saw broad strength across all of our product categories, and we spend a lot of time in the field talking with customers. I would say the mood is cautious, but on the margin, quite positive. We're obviously watching it and cautiously optimistic, but we feel good about what we're seeing in the business. One last quick follow on. Obviously, a lot of questions about, you know, what's going on in Europe. How's that business holding up, as sort of the year's played out with the war and, you know, energy prices over in that region? Yeah, I'll take that, Chris. Our European business continues to be rock solid. We had another really good quarter. I could not be more proud of our European team, and we saw it across all of our markets. We saw really nice sales increase in Germany. Our Netherlands business is strong. Really pleased to see our business in France posting mid-single digits. All is good there. As you know, we're not in Russia or Ukraine and so not necessarily feeling that impact. You mentioned, you know, the energy issue, Chris, which obviously is getting a lot of press. We're watching it closely. We are not an energy-dependent business, so our DCs, our stores will continue to operate as they always have. We're watching it. Certainly, you know, we're concerned. We're a little concerned over the potential for some economic challenges, but again, pleased to say, really strong quarter by our team, and we're seeing that strength carry over into Q3 as well. Thanks very much. Best of luck. Yeah. Thank you, Chris. Thanks, Chris. Ladies and gentlemen, our next question comes from Michael Montani with Evercore ISI. Please go ahead. Hey, good morning. Thanks for taking the question. Just wanted to ask, if I could, about the sales guidance, which, you know, seems to imply to hit the midpoint for the full year, for example, in automotive, you know, 400-500 basis points of moderation and then, you know, a 10 percentage points plus slowdown for industrial. Just wanted to see if that's kinda more conservatism, if there's something, you know, in particular that you're seeing, how we should think about that, you know, in light of some of the traction that you've discussed for your initiatives. I'll take that one. It's Bert. Hey, Mike, good morning. Thanks for the question. Look, first, I'd just like to thank our teams for the tremendous work so far in the first half, and I'll try to give you some color on the guidance from there. Certainly exceeded our expectations in the first half. The business continues to be very resilient and balanced. But a number of factors were contemplated into how we raised guidance. Obviously, the sales numbers that I provided in my prepared comments, the outperformance in the first half and the momentum we see in the underlying businesses Paul and Will have talked about. We needed to balance that against, the fact that we just can't ignore, that there's tightening economic conditions that potentially could impact businesses in the second half. We're trying to balance the strength of the first half and our momentum exiting Q2 while being eyes wide open and prudent about what we see out there. Again, we've already talked about a few of these things with inflation, lingering COVID conditions, the geopolitical landscape, ongoing supply chain constraints. Look, on the back half guide for sales, our original plan for the year assumes some normalization of growth rates in the second half, and our views are really unchanged on that. When you look at a year ago, the outperformance we had in the second half was quite significant, and we just can't expect a year-for-year repeat of that level of outperformance. We moderated that a little bit. Look at a normalized growth rate in the second half. As I mentioned in my prepared comments, we do have some FX headwinds that are incremental to our guide in April, about $0.08 as we look at that. Look, we're gonna stay focused, look for additional growth opportunities in the second half, stay disciplined on cost, and look for efficiency gains. At the end of the day, we're gonna improve operating margin, and have operating margin expansion for the full year, and we think that's a pretty good outcome. Got it. Thank you. If I could follow up, just on the cost side. One question, a bit housekeeping, but just how to think about interest expense in light of some of the move-up in interest rates. Secondly, on gross margins, you know, given the strong organic growth and then inorganic increases, kind of why the supplier incentive pressure there? Would think you guys might have had some incremental benefits going on there. Yeah, I'll take, I guess I'll take both of those. Look, I think, you know, we're really in a positive spot on our capital structure. We're at 1.8 x levered. That's below our range of 2x -2.5x. We have a very strong investment-grade rating. And we look at our debt structure, it's nearly 100% fixed, with some episodic borrowing against our revolver, usually intra-month. But when you look at that, I don't see a lot of volatility there. We've got a weighted average interest rate of 2.3%. The only place that we've seen a little bit of pressure is in our AR securitization program, in operating expenses. It's still very, very attractive capital source for us, and really not anything of consequence to call out there. In terms of gross margin, back to your question on that. Look, you know, we landed at 35% for the quarter. That was in line with our own expectations. The underlying execution from our teams, which has been absolutely tremendous, and core activities around category management and pricing has driven significant margin improvement, as I mentioned in my prepared remarks. Unfortunately, that's a bit hard to see this quarter. We got three big factors masking that. Some expected moderation in supplier rebates, as you mentioned, and I'll talk about that here shortly, foreign currency and inflation. When you look at the supplier rebates, those moderated from a year ago. We had some heightened supply chain challenges in the prior year that you're all intimately aware of, and those impacted the amounts we received from our suppliers. That's abated a bit. If you recall, we had a 40 basis point margin expansion from those a year ago, and so that's, as anticipated, moderated. The great part about that, the flip side of that, is we have more inventory to get to our customers, and we've got a better level of availability to be able to drive through to the business. I'll just land that point with. We expect gross margin for the full year to be consistent with 2021, and again, we think that's a great outcome in this very dynamic environment. Thank you, and good luck. Thank you, Mike. Our next question today comes from Liz Suzuki at Bank of America. Please go ahead. Great. Thank you. Just on, you know, inflation, which is the kind of topic du jour, what do you think pricing and margins could look like when inflation ultimately moves in the other direction? As in, if we find ourselves in a deflationary environment, can you hold on to price actions you've taken, or do you think the competitive environment has changed such that it might get more challenging to keep pricing sticky? Hey, Liz, it's Bert. How you doing? Hope you're having a good summer. Thanks for the question. Look, I'll take that one a bit. Look, the inflationary environment has persisted, and it's no doubt a tough dynamic out there for everyone. Requires very intense focus from everyone, and our teams are doing a great job of managing it and have been able to generally pass along, as you pointed out, price increases to mitigate the impact. Our strategy there has been to protect gross margin rate. So that's our focus. As you look at the downside of that, we wouldn't expect to see the environment pull back on pricing. Obviously, that would take some time to work through, but we wouldn't see an immediate pullback in the environment. We'll stay competitive on that front, and watch the marketplace. Again, I think the bottom line is we wouldn't see a big pullback in terms of pricing or the pricing environment in general. Obviously, cost changes take quite some time to work through the supply chain. Great. Thank you. Just how much of the comp growth in each of your segments, do you think will be attributable to inflation or, you know, SKU for SKU inflation for the year? As you look out into, you know, next year, do you expect that to moderate? I think I'll start with the back half of your question and just say, for the back half of the year, we really, as Will mentioned in his remarks, expect inflation levels to stay, where they are, from here for the rest of the year. That's how we contemplated it in our guide. That's a slight uptick from what we saw in the first quarter. Then if you look at it all up for GPC consolidated, we see the impact kind of mid-single digits on the top line within the Motion industrial business that's low single digits on the top line. For the auto business globally, we see that in the high single digits on the top line for the rest of the year. Great. Thank you. Of course. Ladies and gentlemen, our next question today comes from Scot Ciccarelli with Truist Securities. Please go ahead. Good morning, guys. Scot Ciccarelli. Just a clarification on that same SKU inflation concept in the U.S. Are we basically seeing that units are fairly steady or flat with the comp gains coming from rising prices, or is there another lever in there we have to be cognizant of? Hey, Scot, thanks for the question. It's Bert. I'm on a roll here. I'll keep taking these. Yeah, I think, you know, the best way to characterize it is how you couched it there. We'd see the environment to flattish in terms of how the U.S. auto business is performing. Got it. Then pivot to the European business once again. You know, we know what our experience in the U.S. has been. You know, when you have a spike in gas prices, people tend to often drive less. They need a little less, you know, maintenance because there's less wear and tear on the vehicles. Since you have an energy-centric challenge for a lot of countries that you guys are operating in Europe, and what could become a lot worse in the next, call it, six, nine months, what is your view and what does your history say regarding those markets? Do they act any differently than what we see in the U.S., or is it, you know, pretty consistent kind of geography to geography? Hey, Scot. This is Paul. I'll take that. Look, the environment we see in Europe. In our five years now in that market is very consistent with what we see in the U.S. You know, look, it's steady. As we've seen in the U.S., the automotive aftermarket is incredibly resilient. If there is a recession, which many are predicting, but it remains to be seen, we expect our business to continue to move in a positive direction. We're very pleased with our team, with our performance, with our footprint, which excludes Eastern Europe, and with our performance to date, which has been very strong. As you heard in the quarter, Scot, we expanded our footprint first quarter into Spain and certainly expanded our footprint in Germany this past quarter. We're in a good place with a great team and with a positive outlook for the balance of the year. Great. Thanks a lot, guys. You bet. Our next question today comes from Bret Jordan at Jefferies. Please go ahead. Hey, good morning, guys. Hey, Bret. Hey, Bret. I think you mentioned fill rates improving, but could you talk about sort of where you are on supply chain improvement? Obviously, a year ago, first half of 2021, there were a lot of supply constraints, but maybe where are we versus you know sort of target or normal levels? Yeah. It's Will here. I'll take that one. I would characterize global supply chain as stable to slightly improved over the last 100 days. We've seen a moderation in our ocean freight rates. I would say that the ports continue to be more congested than average, in particular on the East Coast now relative to what we saw early in the year on the West Coast. The suppliers aren't experiencing problems obtaining vessel space, which is a positive development. Lockdowns are moderating over in Asia, which is a positive development. I think for us, as we've thought through and worked through these developments, we've improved actually how we execute. We've rebalanced some of our port activity, we've rebalanced some of our supplier geographies, and we're gaining some nice traction there. The one thing that I would call out is the transport from port to final destination. That is still challenged, whether we're talking rail or freight logistics. Net-net, we're slightly improved relative to where we were 100 days ago. Okay, great. I think you talked about the cadence of the quarter from a sales standpoint. Did you say anything interesting regionally? Is there any real dispersion in U.S. Auto? We saw nice strength down the eastern half of the United States. You know, one could make the case that fuel prices on the West Coast impacted that, given they're so much more elevated relative to the national average. The Northeast to Southeast and our Atlantic region showed nice strength through the quarter. Okay, great. Final, you know, I guess any sign of trade down, you talked about stable consumer demand, but is there any kind of a mix shift, you know, particularly around the lower-end consumer, where they're looking for the lower price point option? Hey, Bret, it's Bert. I'll take that one. Look, we're not seeing much evidence of consumers trading down, customers trading down at all. I think the customer's been pretty resilient, despite the rising fuel prices and other inflationary pressures. You know, when you look at the auto business, it's nondiscretionary to a large degree. You need your car fixed in this environment, particularly with the shortage of new cars and higher, you know, used car prices as well. Customers are focusing on availability and service, which is our sweet spot. You know, we've got product readily available. Same on the industrial side. We're not seeing a pullback there. The momentum continues as you saw in our Q2 results. We just really continue to focus on, as Will talked about, supply chain, inventory management, and having the right product in the right place. Great. Thank you. Thank you. Our next question today comes from Daniel Imbro with Stephens Inc. Please go ahead. Yeah, good morning, guys. Thanks. I wanted to circle back on the pricing backdrop. Obviously, it's been topical with some of your big peers investing in price. Sounds like you guys aren't really feeling the impact of that yet. I guess first, is it still true you guys really aren't feeling any discernible impact? Then Will, if not using price, you talked through a number of initiatives in your prepared remarks on the auto side. Can you talk about which of those, you know, you expect to drive the most share gains or kind of what you guys are leaning into as you look out to next year and you know, get back to share gains, not just recouping, you know, some of the underperformance during COVID? Yeah, Daniel, let me see if I can break down your questions. First piece was, are we seeing any impact from competitive pricing strategies in the market? I would tell you that we're not seeing an impact from anything that's been announced by competitors as it relates to pricing. The market continues to be rational. As we've talked a lot about here, we're doing our own strategic work around pricing to be agile and react to the market, and super proud of the team there. The second part of your question was which part of our initiative stack is driving share gains near term and recently. All of our work around sales force effectiveness, obviously, is turning into nice momentum. The pricing work is turning into nice momentum. All of our technology investments that's improving the customer experience and making us easier to do business with. While I talk about, I think your question was U.S. Auto specific, all of those initiatives are relevant as we look around the globe. We have flavors and versions of all of those same initiatives, which I think is contributing to very nice global broad-based strength. Yeah. That's helpful. Paul, let me follow up on the industrial piece. You guys talked about momentum continuing through the second quarter across all of your end markets. Is it still true about half that business is contracted, so you guys have good visibility into the back half of this year? Just within those end markets in quarter to date, are you seeing any signs of weakness among different end markets or any particular concerns you see there? No, you are correct, Daniel. It is about half of our business is under contract, and pleased to say we are not seeing any signs of slowdown in our business segments. Certainly we could call out a few that we're continuing to see accelerate as we go into the second half. Yeah, the industrial is performing incredibly well as you've heard throughout this call. Got it. I'll leave it there. Best of luck. Thank you. Thanks, Daniel. Ladies and gentlemen, we have time for one more question, and today's final question comes from Seth Basham with Wedbush Securities. Please go ahead. Thanks a lot, and good morning, guys. Hey, Seth. My first question is just around the outlook for especially the U.S. NAPA business. Just thinking about the trends in miles driven as gas prices are still very elevated. Do you expect pressure on your business units declining perhaps on a comparable store basis in the U.S. in the back half of the year as we see some of the moderation in key leading indicators for your business? Hey, Seth. It's Bert. I'll take that. Maybe Will can have a little perspective to add to it as well. But look, I think our guidance assumes that we continue to perform, as Paul said, well in the U.S. Auto business. It's a dynamic environment out there. You see gas prices dropping and over the last several weeks, so that's a positive in terms of miles driven. We continue to look at that very closely. Miles driven were up a little over 1% in May, most recent data we've seen. I think the underlying fundamentals remain very robust for that market. You got the average age of a car up for the fifth consecutive year. You've got all-time low scrap rates. You have pent-up demand for travel, I think, across the U.S. in terms of people wanting to get out and take vacations. I think the underlying fundamental for the marketplace is there to continue to perform well, and our guide reflects that. I would just add on to that, Seth, you know, Bert mentioned gasoline is coming down, and it's coming down quickly. It's down, I think I heard this morning, $0.17 in the past week. What we're seeing is an incredibly resilient consumer. We heard from our friends at AAA, 88% of travelers over the July 4th weekend, which, you know, gasoline was well over $5 a gallon in that timeframe, 88% of travelers were on the road in their vehicles. As always, the automotive aftermarket is incredibly resilient. I think our consumers are pretty resilient. We're feeling good about our NAPA business in the second half. Got it. Thanks. A follow-up question on a competitive environment and some of the big competitors price investments, you're not seeing any major impact. As the supply situation improves for WDs, do you expect that to change the competitive environment at all? I don't think we do, Seth. You know, it remains to be seen, Seth. Look, I think the improvements we're seeing in our NAPA business. We saw it firsthand last week. We had 15,000 of our NAPA store owners, AutoCare Centers. The positive momentum we have coming out of that conference, the positive momentum that I hear from our teams and our independent owners, our NAPA AutoCare Centers, our major accounts. Our guys are in a good place, and I expect that to continue in the second half of the year. Seth, I would also add, you know, I think this is a market where scale really matters. I think we've talked about that before. As product comes into the market, you know, I think your scale and your global relationships make a difference. So, we feel like that's a nice tailwind for us as we move forward. Good to hear. Thank you very much. Okay. Thank you. Ladies and gentlemen, so no further questions. I'd like to turn the call back over to the management team for any final remarks. Yeah. Thanks, Rocco. To all of our participating analysts out there, thanks for your questions. Thanks for participating. Look, I'll just close with our teams are doing great work. We couldn't be more proud of the results we turned in in Q2. As we look ahead to Q3 and the balance of 2022, we continue to believe GPC is really well-positioned with the financial strength to continue to support our growth plan. Listen, thanks again for your interest in GPC. Enjoy your summer, and we'll see you in October. Thanks. Thanks, everyone. Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines and have a wonderful day.