GPC reports declines at SPR

GPC reports declines at SPR

(FEBRUARY 20, 2020) Fourth quarter sales at business products wholesaler S.P. Richards (SPR) fell by more than 6%, parent company Genuine Parts (GPC) has reported.
SPR’s Q4 revenue was $428.1 million versus $456.8 million in the fourth quarter of 2018, a decrease of 6.3%. Speaking on the quarterly earnings conference call, GPC CEO Paul Donahue said the decline was due to continuing softening demand for traditional office supplies and technology products, industry dynamics and lower sales to national accounts customers. On a positive note, the facilities, breakroom and safety (FBS) segment was up and now represents approximately 35% of SPR’s total sales.
In a separate interview, SPR CEO Rick Toppin added: “In addition to the positive growth in the FBS category that Paul mentioned in his comments, we also saw a positive Q4 sales comp in the independent dealer, the internet reseller and the jan/san distributor channels – all of which are important growth segments for us.”
For the full year, SPR’s revenue of $1.88 billion represented a comparable decline of 1.7%.
Fourth quarter operating profit at SPR was $14 million, a year-on-year decline of 46%, while full-year operating profit was $77.7 million, a decrease of 12.5% compared with 2018. Q4 2019 operating margin was 3.3% (Q4 2018: 5.7%) and full year operating margin was 4.1% (FY2018: 4.6%).
GPC CFO Carol Yancey also confirmed an $82 million non-cash impairment charge at the Business Products Group in Q4. “Several factors that developed in the quarter, including greater uncertainty associated with the longer-term industry trends as well as a competitive environment, led us to this decision,” she said during the conference call, adding that this “effectively eliminates the goodwill for this business segment”.
In its 2020 outlook, GPC forecast a sales decline at SPR of between 1-2%, excluding the impact of the recent GCN and SPR Canada divestitures. - (OPI)