Welcome to the Genuine Parts Company Q4 2023 Earnings Conference Call. Today's call is being recorded on February 15, 2024. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. At this time, I would like to turn the conference over to Tim Walsh, Senior Director, Investor Relations. Please go ahead, sir. Thank you, and good morning, everyone. Welcome to Genuine Parts Company's Q4 2023 earnings call. Joining us on the call today are Paul Donahue, Chairman and Chief Executive Officer, Will Stengel, President and Chief Operating Officer, and Bert Nappier, Executive Vice President and Chief Financial Officer. In addition to this morning's press release, a supplemental slide presentation can be found on the Investors page of the Genuine Parts Company website. Today's call is being webcast, and a replay will be made available on the company's website after the call. Following our prepared remarks, the call will be open for questions, the responses to which will reflect management's views as of today, February fifteenth, 2024. If we're unable to get to your questions, please contact our Investor Relations Department. 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. Today's call also may involve forward-looking statements regarding the company and its businesses as defined in the Private Securities Litigation Reform Act of 1995. 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 filings, including this morning's press release. The company assumes no obligation to update any forward-looking statements made during today's call. With that, let me turn the call over to Paul. Thank you, Tim, and good morning. Welcome to our Q4 and full year 2023 earnings conference call. We are pleased to report that Genuine Parts Company delivered on our financial commitments in 2023 and finished the year with a solid Q4. Will and Bert will cover our results in more detail, but I'd like to share a few highlights. During 2023, total GPC sales topped $23 billion, an increase of nearly $1 billion from the prior year and in line with our expectations. We improved our total company segment profit margins by 50 basis points to nearly double digits, and we had our third consecutive year of double-digit earnings growth. And notably, we returned $788 million to our shareholders this year, and today we announce that our board approved the 68th consecutive annual increase to the dividend. Our teams around the globe delivered a strong performance while remaining focused on our long-term strategic initiatives to profitably grow our business and deliver value for our customers. I want to take this opportunity to thank our more than 60,000 GPC teammates across the world for their dedication and hard work. Our Q4 and full-year results again demonstrate the value of our complementary business mix, paired with our geographic diversity. At our Investor Day, back in March 2023, we showcased our strategic initiatives and announced long-term financial targets for the first time in our history, all focused on delivering for our customers and delivering shareholder value. Clearly, this past year had its share of challenges and opportunities, but our performance in 2023 was a good start to achieve our three-year goals, highlighted by the following: Our Motion team completed the integration of Kaman Distribution Group, and we exceeded our synergy target a full year ahead of plan. As an integrated business, Motion is a clear leader in their space, providing industrial aftermarket solutions with a compelling value proposition to more than 200,000 customers around the world. In addition, during 2023, Motion continued to roll out their fulfillment center strategy, which is driving cost efficiencies, inventory productivity, and improved customer service levels. During the Q4, I had a chance to visit our fulfillment center in Lakeland, Florida, and I can't say enough positive things about the team and their dedication to serving our customers. We're excited about the rollout of these facilities in 2024 and 2025. Within Automotive, our international automotive businesses outperformed our expectations in 2023. Our European team continues to expand their presence and gain market share through both strategic acquisitions and organic growth. In 2023, we expanded our presence in Spain, Europe's 5th-largest automotive market, with the acquisition of Gaudi, securing our position as the leader in this strategic market. And finally, the rollout of NAPA-branded product in the European market has continued to surpass our expectations, a testament to the strength of the NAPA brand....In Australasia, our team is profitably growing market share with their 4th consecutive year of double-digit profit growth on top of industry-leading sales growth. Our supply chain and investments in the region have improved the customer experience while driving productivity in our business. In North America, while results fell short of our expectations, we remain focused on our strategic initiatives and continue to make solid progress. We've undertaken a comprehensive review of the NAPA business to identify key issues, and we have taken action to improve the performance at NAPA. We are confident we are focused on the right initiatives to positively impact our performance in the quarters ahead. These initiatives, along with plans for long-term investments, were rolled out to our field leadership teams and across our independent owner group in December. The team's competitive drive and energy were on full display, and we know that the best days for NAPA are in front of us. And finally, as part of our long-term growth strategy, our teams continue to expand our footprint through bolt-on acquisitions. During the year, our global automotive store count expanded by 173 net new stores, up approximately 2% from 2022. We remain disciplined in our playbook for acquisitions and are confident in our ability to continue seamlessly integrating future businesses across all our segments and geographies to create value for our shareholders. As we look ahead to 2024, we are seeing supportive industry fundamentals in both the automotive and industrial end markets. Within our global automotive business, we continue to see an increase in miles driven, an aging and complex vehicle fleet, and high vehicle prices and financing costs, all supportive for the automotive aftermarket, and we remain uniquely positioned in this space with our global footprint. Within our industrial business, macro indicators like industrial production and the Purchasing Managers Index continue to show improvement after 15 months of contraction. We stand to benefit from a highly diversified portfolio of customers and end markets, and we are well positioned now and in the future to capitalize on reshoring trends. While industry fundamentals remain supportive, broader macroeconomic factors like high interest rates and persistent inflation in everyday purchases are pressuring the consumer and businesses alike. That said, the vast majority of parts and solutions we provide across both businesses are break-fix and nondiscretionary in nature. In our business, parts availability is paramount, and we are leveraging our enhanced data analytics and science to have the right part in the right place at the right time. As we continue to navigate the environment in 2024, it is imperative that we remain agile and move forward with a sense of urgency. Given current market conditions, we need to continuously take action to position our business for long-term success. This morning, we announced a global restructuring initiative to further simplify and streamline our business. Will and Bert will share more about the specific actions we are taking, along with the financial implications. So in closing, we are proud to have delivered on our financial commitments for 2023. We accomplished this while taking decisive actions to improve our NAPA business in the U.S., while at the same time investing in our strategic priorities to drive profitable growth. We believe the execution of our strategic initiatives, along with our team's relentless focus on our customers, will drive value for our customers and our shareholders, both now and for years to come. So with that, I'll turn the call over to Will. Thank you, Paul. Good morning, everyone. I want to start by adding my thanks to the global GPC team for another great year and for their ongoing dedication to serving our customers. In addition to delivering solid financial results for the year, we also made significant progress on our strategic initiatives, many of which we shared at our Investor Day last March. Globally, we align our strategic initiatives around five foundational priorities, which include talent and culture, sales effectiveness, technology, supply chain, and emerging technology, complemented by disciplined and value-creating M&A. Our focus around these priorities drives global team alignment as we continuously improve the customer experience and deliver profitable growth. Turning to our results by business segment. During the Q4, total sales for global industrial were $2.1 billion, an increase of 2%, with comparable sales growth of 1% versus the same period last year, and 18% on a 2-year basis. Average daily sales were essentially flat in October, with low single-digit growth in both November and December. Motion saw mixed results across its various end markets, similar to last quarter, with particular strength in iron and steel, chemicals, and mining. Categories like equipment and machinery and oil and gas were underperformers relative to the Q4 average. Motion continues to make excellent progress with initiatives, including sales excellence, pricing, e-commerce, technology, and supply chain strategies, that are helping to win profitable market share and improve productivity. For the full year, Motion sales grew $414 million, or 5%, with comparable sales of 5% and 22% on a 2-year basis. I'd like to take a quick moment to highlight our Motion team in Asia Pacific, who delivered a fantastic year. Sales and profit were up double digits in 2023, and the team continues to outperform our expectations. Industrial segment profit in the Q4 was $275 million, up 19% and 12.9% of sales, representing a 190 basis point increase from the same period last year. For the full year, Industrial segment profit was $1.1 billion, up 24% and 12.5% of sales, representing a 200 basis point increase from the same period last year and exceeding the 2025 target that we set at our Investor Day. Bert will take you through more detail on our outlook for the Industrial segment margin, but we're confident that our strategic initiatives can continue to deliver margin expansion. Throughout 2023, the profit improvement in Industrial was primarily driven by strategic pricing, excellent operating discipline, the execution of our productivity initiatives, and the accelerated integration of KDG. When we announced the acquisition of KDG in December of 2021, we set a target of approximately $50 million of synergies to be accomplished over a 3-year period. We're proud to say that the integration of KDG is complete, and we've realized $70 million of synergies a full year ahead of schedule. Turning to the Global Automotive segment. During the Q4, our international automotive businesses posted positive sales growth in local currency, while sales declined at U.S. Automotive. Total sales for Global Automotive increased approximately 1% for the quarter, with comparable store sales decreasing 3%. For the full year, total sales for the Global Automotive segment increased 4%, with comparable store sales increasing 2%, in line with our guidance. The moderation in the sales benefit from inflation continues to be a factor in our year-over-year comparisons. As expected, Global Automotive sales inflation moderated throughout the year and ended the year in the low single-digit range, compared to a high single-digit range in the Q4 of 2022. Global Automotive segment profit in the Q4 was $259 million, and segment operating margin was 7.5%, down 110 basis points. In the Q4, all of our international geographies delivered margin expansion, although Global Automotive segment margin was negatively impacted by the performance at US Automotive. For the full year, Automotive segment profit decreased approximately 1% versus the same period last year, and segment operating margin was 8.2%, down 50 basis points year-over-year. Now, let's turn to our Automotive business performance by geography. Starting in Europe, our Automotive team delivered another strong quarter, with total sales growth of 10% in local currency and comparable sales growth of 4%. For the year, total sales growth was 16% in local currency, with comparable sales growth of 8%. We're winning profitable market share gains across our European markets due to the ongoing execution of our initiatives and strategic value-creating acquisitions. During the Q4, we saw low single-digit to double-digit growth across each of our geographies, and for the year, we delivered mid single-digit to double-digit growth across each of our markets. This was driven by continued wins with key accounts, winning higher share of wallet with existing accounts, and expanding the NAPA brand, generating over EUR 400 million in the region, which exceeds our internal target for 2023. Congratulations to the entire AAG team for another outstanding year. In the Asia Pac Automotive business, sales in the Q4 increased 2% in local currency, with comparable sales growth of 1%. This compares to strong double-digit growth in the comparable period last year. Sales for both commercial and retail were up in the Q4. The team is executing well, converting the sales momentum in the quarter into strong operating margin expansion. For the year, sales increased 7% in local currency, and comparable sales increased 6%. Sales for both commercial and retail were up in the year, with commercial growth up mid-single digits and retail growth up high single digits. Our Asia Pacific team had another fantastic year and their fourth consecutive year of double-digit profit growth. They continue to drive market share gains, deliver strong operating leverage, and strategically invest for long-term success. Congratulations again to the Asia Pacific team on another great year. In Canada, sales grew approximately 1% in local currency during the Q4, with comparable sales decreasing approximately 1%. For the year, total sales grew 5% in local currency, with comparable sales increasing 4%. We're pleased with the Canadian team's growth this year and the execution of their strategic initiatives, despite a softer macroeconomic backdrop and a more cautious consumer in Canada. In the U.S., automotive sales declined 5.6% during the Q4, with comparable sales down 6.1%. A reminder that our comparable sales figure includes same-store sales out from our company-owned stores, as well as same-store sales into our independent-owned stores. In the quarter, sales to commercial customers were down low single digits, while sales to DIY customers were down mid-single digits. For commercial, NAPA Auto Care saw low single-digit growth, while major account sales were down mid-single digits. Let me provide an update on the priority actions we're taking at NAPA that we explained on our Q3 call. We detailed three key areas to improve, including operational rigor in our stores, addressing fill rates in key product categories, and working with our commercial teams to address growth opportunities in the field. First, we completed changes to certain key suppliers to improve fill rates. The changes have improved category trends in the Q4, and we're encouraged by the positive momentum. Second, our in-store service levels, measured by on-time delivery to customers, have significantly improved as a result of increased focus on last mile operating disciplines. Lastly, our commercial efforts are ongoing and were highlighted by the appointment of Tom Skov to a newly created role of EVP, Sales and Store Operations for NAPA. Previously serving as a Division Vice President in the West, Tom has over 20 years of field sales and operations experience with NAPA. He's an automotive parts expert and has a deep understanding of our customers, field sales, and store operations. We're excited for the strong leadership Tom will bring to our sales and store operations field teams. While these actions drove encouraging improvements, the Q4 results at NAPA still missed our expectations. As we mentioned previously, the Q4 and December, in particular, were difficult year-over-year sales comparisons for NAPA. Our average daily sales growth for NAPA in the Q4 of 2022 was 10%, which included approximately 8% benefit from inflation, with December 2022 sales up 13%. As expected, the benefit from inflation did not repeat in the Q4 of 2023. Further, December 2022 included the benefits of extreme winter weather for most of the U.S. With that context, as we look within the current Q4 for U.S. Automotive, the first two months of the quarter were in line with our outlook that we shared last quarter. December performance, however, was well below our expectations, driven by unseasonably warm weather and moderated purchases from our independent owners. We had the opportunity to be with many of our largest owners at a week-long meeting in December. It was a productive series of discussions with high energy and good engagement. The outlook for the market fundamentals remains positive. We reviewed areas of commercial focus and detailed key initiatives to deliver profitable growth together. The NAPA competitive spirit is certainly high. A theme from the owners' feedback highlighted ongoing efforts to manage their purchases as they balance operating costs in the current environment. Based on the session feedback, however, we remain optimistic that owners' purchasing behaviors return to more normal patterns in 2024, and we're encouraged by the performance in January, albeit it's only one month. As we reflect on 2023 and move forward, we will continue to evolve our operating model at U.S. Automotive. We will be more intentional about owning more stores. A higher mix of company-owned stores in targeted priority markets enables us to service our repair shop and commercial customers more consistently and completely. We are also working actively to better align incentives with our independent owners to partner and grow together. We have current and future opportunities to create value in both our owned and independent-owned locations. As an example, during the Q4, we made strategic acquisitions of 33 NAPA stores from our independent owners, ending the year with approximately 1,560 company-owned stores, up 20% versus 2021. While owner acquisitions have been a long-standing aspect of the business, these trends accelerated in the Q4 and H2 of 2023, and we would expect these accelerated trends to continue into 2024. The NAPA business navigated unexpected challenges in 2023, but the team adjusted and took decisive action to step up our operational intensity, simplify our priorities, and improve service to our customers. As we look back during the year, a few highlights. We brought in new leadership, with Randy Breaux now leading the team and a proven internal leader as the new CFO.... These seasoned executives got to work quickly, identifying opportunities, and improved our business clarity and priorities. We quickly assessed costs and took action to increase productivity and efficiency. We partnered with new suppliers to address poor fill rates in select key categories and surgically invested in inventory breadth and depth. We identified opportunities within our stores and DCs to improve our processes to ensure that we're delivering our customer commitments and executing locally. We accelerated progress on foundational talent, technology, and supply chain investments, including, as one example, a strategic global partnership with Google for analytics and search. And we're encouraged by some recent wins, including a structured inside sales program, planned introduction of new product lines, and recent traction with loyalty programs with key customers. In 2024, we believe that supportive industry fundamentals, combined with clear priorities and urgent action, position NAPA to deliver success. For GPC overall, our global teams are already actively executing 2024 priorities, focused on our key strategic initiatives across our businesses. We know evolving market environments require us to continuously evolve with them, and to that end, as Paul mentioned, we announced a coordinated restructuring program across each of our global geographies. The primary objective of the global program is to continue to simplify and streamline our operations, consistent with our overall business strategy. When we simplify, we increase the speed of local service, deliver operational productivity, improve the efficiency of our teams, and reduce our overall cost to serve. This program is a similar playbook to our previous GPC program, implemented in fall 2019, that delivered positive results. Aspects of the restructuring are already in flight, and some will take place in the months ahead. Bert will go over the financial details of our restructuring in his remarks and update you on how it's reflected in our 2024 outlook. In closing, GPC delivered solid Q4 and full year results, and we achieved the plan we laid out for 2023. This was driven by the benefit of our strategic business mix and global geographic diversification. Most importantly, it was driven by incredible effort from our global teammates to take care of our customers, live our GPC values every day, and deliver performance. We're committed to our plans for long-term growth, and we're confident our teams are focused on the right strategic initiatives that will deliver solutions for our customers and create value. Thank you again to the entire GPC team for another great year. With that, I'll turn the call over to Bert. Thank you, Will, and thanks to everyone for joining us today. Our performance in the Q4 and full year continues to demonstrate our long history of delivering earnings and cash flow growth while maintaining a strong balance sheet. Our results, which include double-digit earnings growth in the Q4 and for 2023, were achieved while navigating through a dynamic and challenging year. Before I walk you through the key highlights of our Q4 and full year performance, I would like to note that we had no non-recurring items in the Q4 and 12 months of 2023. Our comparisons to prior year, however, exclude non-recurring items in 2022, primarily related to the integration of KDG and an adjustment in the Q4 related to a remeasurement of our product liability reserve. As we look at 2023, sales totaled $23.1 billion, up 4.5% from 2022, and consistent with our guidance. In the Q4, sales increased 1.1%, with a 2% contribution from acquisitions and a 0.3% favorable impact of foreign currency and other. These items were partially offset by 1.2% decrease in comparable sales. During the quarter, we experienced low single-digit levels of inflation in both our automotive and industrial segments, in line with our expectations. As Will outlined, our Q4 sales performance was highlighted by the growth in Europe, Australasia, and Industrial, offset by the decline in U.S. Automotive. During the Q4, our gross margin expanded by approximately 70 basis points, and for the year, our gross margin was 35.9%, an 80 basis point improvement from our adjusted gross margin in 2022. Our gross margin expansion was primarily driven by the execution of our strategic pricing and sourcing initiatives through investments in technology that enabled us to leverage data and analytics to ensure we have the right inventory for our customers to meet their needs. Total operating and non-operating expenses were 28.9% of sales in the Q4, an increase of approximately 20 basis points from total adjusted expenses in the prior year. For the year, total expenses were 28.4% of sales, a 50 basis point increase from adjusted expenses in 2022. During 2023, we anticipated 60 basis points of deleverage related to our planned investments in team members and increased spending in technology, both of which came in line with our expectations. These investments were partially offset by cost actions throughout the year, particularly at U.S. Automotive. Despite the deleverage in SG&A, our Q4 gross margin expansion drove segment profit margin up 10 basis points to 9.6%.... For the year, segment profit margin was 9.9%, a notable 50 basis point increase from 2022, highlighted by our team at Motion, driving an impressive 200 basis points of margin expansion on mid-single-digit sales growth, with Industrial now representing approximately 50% of GPC's profit pool. Our Q4 earnings were $2.26 per diluted share, compared to $2.05 per adjusted diluted share in the same period last year, an increase of 10.2%. For the full year, earnings were $9.33 per diluted share, compared to $8.34 per adjusted diluted share in 2022, an increase of 11.9%. Turning to our cash flows. For the year, we generated $1.4 billion in cash from operations and over $900 million in free cash flow, both in line with our guidance. During the quarter, we issued $800 million of senior unsecured notes and used $250 million of the proceeds to repay debt that matured in December 2023. We closed the year with $2.6 billion in available liquidity, and our debt to adjusted EBITDA ratio was 1.8x, which compares to our targeted range of 2x-2.5x. Our capital expenditures in 2023, which totaled approximately $500 million, or 2.2% of revenue, were focused on driving the strategic initiatives we showcased at our March 2023 Investor Day. For 2023, 60% of our CapEx was growth capital, centered on technology and supply chain capabilities, including projects related to distribution center expansion and modernization, fulfillment centers at Motion, and using technology to enhance our catalog and payment platforms. While modestly above our original expectations, the areas where we are investing are delivering good returns well above our cost of capital. We continued to make progress on the M&A front in 2023, a long-standing aspect of our growth strategy. During the year, we completed approximately 90 transactions, investing $309 million, with virtually all of these transactions in the Automotive segment. The blended EBITDA rate of the businesses acquired was over 9% on a pre-synergy basis and is accretive to our overall Automotive segment margin, demonstrating the discipline we have in the space. In 2023, we returned approximately $788 million, or 55% of our operating cash flows, to our shareholders in the form of dividends and share repurchases. This includes $527 million in cash dividends paid to our shareholders and $261 million in cash used to repurchase 1.8 million shares. Before we turn to our outlook for 2024, as you heard earlier from Paul and Will, this morning we announced a global restructuring designed to reduce our SG&A costs, improve efficiency, and accelerate investments. In 2024, we expect to incur costs of approximately $100 million-$200 million related to our restructuring efforts, and we will report this as a non-recurring expense. Through these efforts, we anticipate a benefit of $20 million-$40 million in 2024 and $45 million-$90 million on an annualized basis. Our current restructuring activities reflect our discipline to continuously refine and improve our business and ensure we are taking the necessary actions to position us to achieve our long-term targets. As we turn to 2024, we are balancing solid industry fundamentals, which remain supportive for long-term growth across our businesses, against a backdrop of mixed economic conditions, driven by high interest rates and persistent cost inflation. Despite this, we remain confident in the execution of our strategic initiatives and the benefits we expect to realize. For the year, we expect total sales growth to be in a range of 3%-5%. We anticipate a more moderated H1 and stronger H2 in 2024 for both Automotive and Industrial. Included in our outlook is the assumption that the benefit from inflation remains at more normalized levels, contributing less than 1% for both business segments. We are targeting full year gross margin expansion of approximately 20-40 basis points, primarily driven by our continued focus on our strategic sourcing and pricing initiatives. Our outlook assumes that SG&A will deleverage between 20-30 basis points from further investments in technology. Our technology investments are key to enabling our strategic initiatives. We expect diluted earnings per share to be in the range of $8.95-$9.15, and adjusted diluted earnings per share to be in the range of $9.70-$9.90, which represents an increase of 4%-6% to last year. Our adjusted earnings per share guidance includes approximately $0.10 of EPS benefit related to our restructuring initiatives, which represents about half of the savings we are targeting for 2024. The successful execution of all our restructuring initiatives in 2024 provides an additional $0.05-$0.10 EPS benefit, not included in our guidance. By business segment, we are guiding to the following: 2%-4% total sales growth for the Automotive segment, with comparable sales growth in the 1%-3% range. As we consider our sales guidance for automotive, our growth rate will be negatively impacted in 2024 by approximately 100 basis points from new incentive programs associated with changes to certain supplier arrangements we previously announced in the U.S. automotive business. Historically, these programs have been managed by our suppliers. Under the new arrangements, these will be managed by our U.S. automotive team. The new arrangements will be accounted for as a reduction of revenue, however, have a corresponding reduction of cost of goods sold, and as a result, have no negative impact to gross profit. For global automotive segment margin, we expect 20-40 basis points of expansion year-over-year. For the industrial segment, we expect total sales growth of 3%-5%, with comparable sales growth in the 2%-4% range. For 2024, we anticipate global industrial segment margin to expand by approximately 10-20 basis points year-over-year, after finishing 2023 at 12.5%. Our performance in 2023 exceeded our long-term target of 12%, driven in part by our outstanding work to integrate KDG a year ahead of schedule. We will revisit our long-term target for industrial in the future, but we see further opportunities for margin expansion in 2024 and beyond. Finally, we are targeting corporate expense to be approximately 1.5%-2% of sales. Turning to a few other items of interest. With our strong balance sheet and cash flows, we are well positioned to take advantage of opportunities that fit with our long-term growth strategies, regardless of the economic backdrop. In 2024, we will continue our long history of balanced capital allocation with four priorities: capital expenditures, M&A, our dividend, and share repurchases. During the Q4, we added a new capability and further flexibility to pursue strategic investments with our commercial paper program, launched in December. Our cash flows will remain strong in 2024, as we expect cash from operations to be in a range of $1.3 billion-$1.5 billion, with free cash flow of $800 million-$1 billion. As we outlined at Investor Day, investments in our supply chain and IT capabilities are central to our success. For 2024, we expect CapEx to be approximately $500 million, or 2% of revenue, consistent with 2023. As we look at 2024, the growth capital we are deploying, which is approximately 55% of our forecast, will drive modernization of our supply chain through automation and new DCs and fulfillment locations that are partnered with technology that enhances our customer experience, like our investments in catalog and search platforms through our partnership with Google. As we look at M&A, our global pipeline remains robust, and we continue to remain disciplined, pursuing opportunities that create value. Our strong track record of success, combined with our ability to put our balance sheet to work, positions us well to further grow our global scale and footprint. In maintaining our focus on shareholder returns, this morning, our board approved a $4 per share annual dividend for 2024, representing our 68th consecutive increase to our annual dividend. This represents a 5.3% increase from the $3.80 per share paid in 2023. In closing, our teams managed the business through a dynamic environment in 2023, including navigating unexpected pressures in our U.S. automotive business while achieving mid-single-digit sales growth, gross margin expansion, segment margin expansion, and double-digit earnings growth. As we look ahead to 2024, we will continue to strategically invest in our business for the long term while taking actions to better align our assets in the near term and maintain our strong balance sheet. We look forward to updating you on our progress as we move throughout the year. Thank you, and we will now turn it back to the operator for your questions. We will now begin the question and answer session. Your first question comes from Chris Horvers with JPMorgan. Please go ahead. Thanks. Good morning, guys. So my first question is, regarding the independent versus the company-operated stores. Can you talk at a high level, what the comp look like between those two segments? And, you know, more importantly, you know, do you have a sense of what POS is versus inventory at those independents? Presumably, you know, the deferral can only last so long, and would you expect that catch up to happen relatively quickly? Morning, Chris. Thanks for the question. I'll take your first part there to start. The independent owners and company-owned stores for NAPA through the quarter were relatively similar, with the exception of December, where we saw a tailoff, as we noted in our prepared remarks, from the independent owner purchases. So I would say largely similar through the quarter, with the exception of December. On the inventory levels, and purchasing relative to sales out- We did see a positive inflection as we went through the quarter towards the end of the year, and so we are encouraged that as we come into 2024, those inventory levels will better reflect the sales out activity. Got it. And then I guess as a, you know, follow-up and thinking about that, you, there was bad weather in December, good weather in January, so and you had the destock, restock. So I guess in light of that, can you talk about how you're thinking about the, the trend of the business? You know, what's January? Should we look at those two months together? And how does that inform the, the cadence of U.S. NAPA over the year?. Hey, Chris, it's Bert. Good morning. I'll take that one a little bit and maybe pull it up first before I talk specifically about January and getting into 2024. But in terms of guidance, as you heard in my prepared remarks, we're looking for $9.70-$9.90 for the full year, 5% at the midpoint. Just to give you a little bit more color, we think the H1 is a bit more moderated on both segments than the H2. H2, we think, will be a bit stronger. And that's really around how we're thinking about the interest rate environment, perhaps what could happen there in the H2, and rebounding and improving industrial activity in the H2 as well for the Motion business. Beyond that, you know, the macro environment is pretty choppy. We've got high interest rates, stubborn inflation. We've got a lot of geopolitical considerations we're looking at, including an election here, here in the U.S. On the other side, we've got some of our own headwinds, with some interest rate expense headwind for the year, and we'll be normalizing, as I said in my prepared remarks on inflation benefits, against 2023. And looking at the cadence of the quarters, I don't want to give quarterly guidance, but as I just talked about, moderated H1, stronger H2. And a few things specifically for Q1. We'll have some interest rate headwind, interest expense headwind, excuse me, and a difficult comp for Motion. They comped at 12% last year. Still strong industrial production, Q1 of 2023. We'll come up against that here in the Q1 of 2024. For the NAPA US auto business, we'll be looking at a comp against some high single-digit inflation from Q1 a year ago. Taking all that together, long answer here, but taking all that together, we do expect the NAPA business to improve sequentially from Q4 on a reported basis, even with that headwind from inflation. And we're encouraged, as Will said, with what's happening in January. We really feel like we're off to a good start, met our expectations for what we were looking for in January. As you also look at the cadence of the year, I still expect Q1 to be our weakest earnings quarter of 2024, but remain very confident in our full year guidance. Just a finer point on that: so would you expect both Motion and industrial and U.S. NAPA to be negative in one Q on an organic comp basis? Well, look, I don't want to get into giving you intra-quarter guidance. Since I'm not going to give you the quarterly guidance, I'll just kind of stick with where we are, not focus on one month, since one month doesn't make a quarter. But we're encouraged by January, particularly in the NAPA business. It improved sequentially from December and met our expectations to start the quarter. Got it. Thanks very much. Thank you, Chris. Your next question comes from Scott Ciccarelli with Truist. Please go ahead. Hey, good morning. This is Josh Young on for Scott. So if we look at the performance of the U.S. auto business, you know, why do you guys think you're, you're losing so much share there? And what do you need to do to gain back share, given that it's typically pretty difficult to drive meaningful share shifts in this industry? Yeah, thanks for the question. Listen, I think we've shared, both last quarter and this quarter, a lot of specificity about the work that we're doing. Proud of the progress that we're making. The script laid out a lot of the actions that we've taken specifically around operational intensity, inventory, technology investments, field leadership, store operations. It's a big body of work, and we're highly confident that the team's going to turn it around as we move forward. So there's a lot to like. We know we've got opportunities to get better, and we've got a lot of confidence in the team. Hey, Josh, I would just tag on to what Will said. You know, look, we own our results for 2023. We've touched on that. It's now behind us. We've got new leadership at NAPA. We've got an improved supply chain. We've got improved search capabilities, new sales structure in the field, and we're confident that business, as I think I said in my prepared remarks, our best days are in front of us. So, we're encouraged, as Bert said, by the early days and early weeks of 2024, and again, looking for better days ahead. Yeah, that's helpful. And then just one on margin. So if we think about the targets you outlined last year, you know, obviously, you're running above that on industrial, and you're talking about expansion for next year. But given what we've seen in auto for 2023, how are you thinking about the target you laid out there? Yeah, on the automotive segment margin, we're guiding to 20-40 basis points of improvement for the coming year. We're building off of a continued strength in Europe and Australasia. We've got great businesses there with great share and good growth opportunities. As Will outlined, we're optimistic about where both of those businesses are headed. When we turn back to the U.S., we've got a lot of actions in flight and we're bullish on the things that are happening. Will's outlined all of those, so I don't want to be repetitive. But January is off to a good start for NAPA. We're encouraged by the result there. And we think that business improves, as I said, as we move throughout 2024. I would couple that with our restructuring. Our restructuring activities that we announced this morning are intended to streamline the business and improve our efficiency, and we expect to get good benefits there as well. Yeah, that's helpful. Thanks, guys. Your next question comes from Michael Lasser with UBS Securities. Please go ahead. Good morning. Thank you so much for taking my question. On the industrial segment, where do you think margins can go now that you've experienced such significant growth over the last few years? And is there any reason to believe that you should give some of the growth back in the coming years? Hey, thanks, Michael. Good morning. Look, we got into 10-20 basis points of margin expansion for industrial in 2024, coming off of 12.5% in 2023 and 200 basis points of improvement this past year. I would just say the last two years have just delivered exceptional margin expansion for that business. We had good industrial production over that period, and most importantly, we had an outstanding execution of the integration of KDG. We got that a year earlier than we expected and at a higher level of synergy than we expected. So, so that helped the result in 2023 be a little bit outsized versus probably what's a normal run rate for the business. As we look at 2024, we'll operate in a little tighter economic environment. We'll have a little less top line in the H1, than, than we did a year ago in the H1, and we're also going to be lapping those same KDG benefits that I just mentioned a moment ago. So 2024, we see a little bit of a recalibration for industrial back to what would be more historical for GPC in terms of growth, always committing to that 10-20 basis points of improvement. But having said all that, we see a long runway here. The industrial business is something we love. That team is just executing at a very high level. Will mentioned their operating discipline, they're focused on gross margin, and we expect that to continue, which is why we've guided to more improvement this year, and we'll see that as we move in 2024 and beyond. Michael, I would just tag on to what Bert said. We've been able to accomplish this while in the midst of the longest contraction on the PMI numbers, I think since about 2008. So we fully expect... Well, we're encouraged by the move in the right direction in the PMI numbers. We'll see industrial production, I think today comes out. But we're expecting that manufacturing to shift back to a positive in sometime in 2024, and that's just gonna benefit the top line, which will benefit the overall business. Got you. My follow-up question is on North American auto business. What have you assumed for market growth for 2024 within that segment? Just so we can get a sense for how you're assuming your market share will trend in the year ahead. And have you made any assumptions around acquisitions within your growth expectations for this year? Thank you. Yeah, Michael, it's Bert. So we gave comp sales guidance for global automotive segment of 2-4. I don't wanna get into too much geographic difference, but, we'll say that the market, when you take all of our geographies together, is somewhere between flat to 2% up. We've already talked about inflation. That'll be about a point or so, and we're assuming that we'll get a point or so from acquisitions as we look at the automotive segment when we move through 2024. So hopefully that gives you a little bit of color on the breakdown of how we're thinking about sales growth. Got it. All right. Thank you very much, and good luck. Thank you, Michael. Your next question comes from Bret Jordan with Jefferies. Please go ahead. Hey, good morning, guys. Morning, Bret. Could you talk a bit more about the strategy of expanding the NAPA company-owned store base? I mean, it sounds like you've added reasonably substantially to that. And are there either sort of a profile of the target acquisition by market or size? And sort of how do we think about that from a CapEx and margin impact going forward? Yeah, I'll take the first part, and then I'll pass it to Bert. Look, I think, in 2023, as we mentioned in our prepared remarks, we reflected deeply on where we've got opportunities, in the NAPA business here in the U.S. And part of that reflection was, the strategic impact of owning more stores relative to independent owners, and that was accelerated, as we talked about, based on some of the feedback that we heard from owners as they worked through this kind of higher cost inflation and higher interest rate environment. And that led us to be very specific and strategic about market prioritization, categorizing specific markets into different categories, and then thinking about our operating model through that prism. So the benefits of that, obviously, is take some variation out of our network. It simplifies our network when we invest in initiatives. The execution of those initiatives become easier throughout the network, and so I think there's a lot of qualitative and quantitative benefits that come from an evolution. The evolution will take time, obviously, but we think it's the right thing for us to do as we move forward. The good news, Bret, is that even when we look within our independent owner network and our company-owned network, we've got great operations out there for us to replicate. And so while we will evolve over time, the value creation and operational opportunity in front of us is to get on both sides of the house, the underperforming stores up to, you know, best-in-class. So that's a very actionable body of work. As it relates to capital allocation, I'll ask Bert to make a few comments. Hey, Bret, good morning. Look, on the capital allocation side, this will show up as M&A. These are, you know, small acquisitions, and so that won't really be a CapEx number, but more of an M&A number. And look, they're very attractive to us. We have got a great balance sheet, a lot of financial strength and flexibility to be able to lean in here, and we'll have the ability to do that. These are attractive in terms of being accretive, almost immediately as we capture some of the margin we were sharing previously with an independent owner. We get to reduce some of the structural costs and the way we serve our customers. We'll capture some SG&A synergies, particularly on the IT side and with some of the team members in the overhead and back office ranks. And we'll drive some incremental sales, as Will mentioned. We really have an ability to partner our commercial activities, where also with an independent owner, they may not be fully NAPA sourced. We'll be able to increase that as well. These are asset deals, and always and generally in high-performing markets. So, we like to lean here, and we think there's a lot to love. Great. And then you mentioned that, that December, in particular, you saw independent volumes down or purchasing down. Is there anything? Was that a weather impact? Was that a sort of compounding effect of high rates on their cost to carrying inventory? Sort of what do you attribute that air pocket in the independents to? Bret, I think you nailed it. I think it was a cumulative effect of both of those. Cumulative effect of rates through the year, getting to year-end, you know, closing the books, if you will, softer weather, and then just getting ready for maybe a more robust 2024. So as we said in our comments, we're encouraged by the first three or four weeks of the year here and hoping for a more normal 2024 as we move forward. Great. Thank you. Thanks, Bret. Your next question comes from Greg Melich with Evercore. Please go ahead. Hi, thanks. I'd like to circle back on the restructuring activity. So, Bert, could you help us understand the $100 million-$200 million? Is it cash, non-cash? What's the portion there? And in terms of the synergies, what segments do they show up? Where will we see that in the P&L over time? Yeah, I'll start maybe with the second part of that. So in terms of where will they show up in the P&L, this is a global restructuring, so we'll have all the business units participating. In terms of breakdown of where you'll see things, you know, the biggest part of our SG&A cost is people cost, and so you'll see the vast majority of the benefit. About two-thirds of the benefit we expect to get will come out of the people side. It'll be about half of the cost. It starts already, so we've announced last week a voluntary retirement program here in the U.S. That is the preponderance of the activity, and you'll see that show up in our U.S. business results as we move forward. The offer period for that closes here in the Q1, so we won't expect any Q1 benefits of that, but you'll see those build as we get through the H2 or last three quarters of the year. In terms of cash, non-cash, I would say it's predominantly cash. We do have D.C. and facility consolidation. Some of that will be a non-cash charge, but I would say at this point, particularly with the voluntary retirement offer in the U.S., it's predominantly cash. We will report it all as a non-recurring expense as we move forward and call that out for you guys. Got it. No, appreciate that. And I guess back on the business, could you just level set us now? I know we're up to the 1,500 stores that are company-owned. Could you level set us on what isn't company-owned? Well, how many independents there are, what's company-owned, and then also the mix of business that's NAPA Auto Care, major accounts, and then up and down the street. Yeah. So, today, Greg, for the NAPA business here in the U.S., it's about 25%-30% company-owned, and the balance independent-owned. We have over 2,000 independent owners, roughly. So that gives you some perspective. In total, we've got 6,000 stores in the U.S., so that gives you all the math there. As you look around the world, we have the independent owner model in Europe. Obviously, it's about 1/3-2/3 company-owned to independent-owned, and about that same ratio in our Canadian business. And then we're 100% company-owned in our Asia Pac business. Hey, Greg, it's this is Paul. I'll jump in on the second part of your question regarding the, you know, the business breakdown. Major accounts, roughly, in the high teens, 20% range. NAPA Auto Care, which we're incredibly excited about the progress we're seeing in NAPA Auto Care. We've had a big surge in memberships over the last 90 days. That's about 20% of our overall commercial business. You mentioned small, you know, kind of mom and pop up and down the street. We've got a program as well in place where we're focusing in on getting back some of that business, that's about 20%, roughly. Then you've got government and fleet, which, you know, for us, Greg, that's a significant part of our commercial business and one that we have long been incredibly strong in. That's about the balance of your 40% of your commercial business. So I hope, I hope that helps. It does. Thanks, and, and good luck, guys. Thank you. Thanks, Greg. Your next question comes from Seth Basham with Wedbush. Please go ahead. Thanks a lot, and good morning. My question is on sell-in versus sell-through to independents in 2024. So as we sit here today, are you anticipating your guidance those to be pretty equivalent? Seth, I'm not sure I fully follow that. Say-- run that by us one more time. Sell-in versus sell-out for your independents. Have they finished destocking from your perspective so that we should see no more pressure on comps from that effect? Yes, Seth, I think we're expecting 2024 to be a more normal year, coming off of 2023, which was clearly challenged and different than our expectations. Got it. And then my follow-up is, Paul, you talked about the up and down the street customer. Perhaps that's one area where you've seen some of the most pressure on your business. Are there competitive dynamics there that you didn't anticipate? And what are your plans for getting back that business specifically? So, I think Will mentioned, Seth, in his prepared remarks, he made some comments about our sales force restructuring, more of a and also taking an opportunity to learn a bit from our industrial team with an inside sales group, that is focused on that type customer. There's nothing new on the competitive set. Look, we, Seth, we've got great competitors, and they're tough, and they ultimately raise the bar on us and make us better, and that's exactly how we're responding. So we think there's an opportunity to go back and capture some of that business, and we've got programs, incentives, and people in place to make that happen. So again, encouraged, six weeks into the year, early days, but we are encouraged with what we're seeing. Got it. Thank you. Thank you. Your next question comes from Daniel Imbro with Stephens. Please go ahead. Yeah. Hey, good morning, everybody. Thanks for taking the questions. Morning, Daniel. Daniel. Well, I want to start on the industrial side. I did get disconnected during Q&A, so apologies if you said this, but obviously, industrial growth continues to outperform, I think, the broader market. I guess, what end markets are showing the most relative strength, and, and is that just share gains? And then when we look at the monthly cadence, you know, this low single digit, is that the right exit rate as we think about 1Q and organic growth on the industrial side? Hey, Daniel, I'll take the first part of your, your question. I think, you know, previously we've shared some commentary with you on the end markets that we track here internally. There are about 14 of them. As I said in my prepared remarks, it's a mixed mosaic as it relates to kind of growth versus contraction. Having said that, just maybe a few additional data points. As we look at the Q4 relative to the Q3 across those 14, in the Q4, we have 9 of 14 in growth mode, which is an increase of two versus the prior quarter. And if you decomp that growth, we've got low single digits in three of them, mid single digits in two of them, high single digits in one of them, and double-digit growth in three of them. So on balance, we're encouraged by the sequential improvement versus Q3. And even in the 5 of 14 that are declining, we saw three of those five improve in the Q4 versus the Q3. So hopefully, that gives you a little bit of perspective of, you know, call it the last six months trends on all things end markets. And then, Daniel, you asked about Q1. As you know, we don't, we don't give out quarterly guides, but I would tell you, Q1 will be our toughest comp of the year, Daniel. And I think as Bert mentioned in his prepared remarks, we're looking for really a much stronger H2. But I will tell you this, our industrial team is focused. You hit it in your question. I do believe we're taking share. We got the best team in the industry, and I have no doubt, they'll deliver for us in Q1 as well. Great. I appreciate that. And then from a follow-up, I wanted to follow up on the restructuring. You talked about in a previous question, maybe, where we're going to see it in the reported numbers. But I'm curious if we dig into, like, what kind of jobs are we actually reducing across the business, and then how do you weigh that against the risk of service levels? It feels like some of your auto peers are investing into stores and into distribution. And so curious how you guys think about the competitive dynamics and how you view that risk in 2024 as you try to, you know, maybe gain back some of the share. Thanks. Hey, Daniel, thanks for the question. Look, I would tell you that, you know, the big construct here is to protect the field, customer-facing, selling organization. It's super important to how we go to market, how we can stay very competitive. And so, as we look at the voluntary program in the U.S., which is, as I said earlier, the substantial majority of all the activity we're taking, that voluntary program is very thoughtful. It's targeted to those that are closer to retirement, which is why it's a voluntary retirement offer, and mostly focused on management and back-office spans and layers. So I would just say that we feel really good about the thoughtfulness that was put in by our teams of how to make sure that we strike the right balance here between continuing to serve our customers and deliver every single day, but at the same time, do the right thing for the business for the long term and streamline some of our costs. Thanks, Bert. Good luck, y'all. Thanks, Daniel. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.