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GPC: Industrial Off to a Strong Start in July

|Includes: Genuine Parts Company (GPC), GWW

WW Grainger recently reported its July daily sales were up 21%, or 16% excluding acquisitions, and 12% from second quarter (ex-acquisitions). This is an acceleration from June's 13% (ex-acquisitions) and is a good sign for Genuine Parts as the company's industrial division has generally tracked directionally with Grainger as I have written about before.  

In Genuine Parts' recently reported 2Q, the industrial division (Motion Industries) showed a strong 26% increase in sales. While this was much stronger than Grainger's sales gain, this was due to an easier comparison the year ago for Genuine Parts. The two year trends were more in line with each other (down 1%-2% for both companies). 

Genuine Parts is guiding to only 13%-15% growth in this division for the second half of this year. While July is only one month, the Grainger report suggests business has remained far more robust so far. 

Next week, the Industrial Production data will be released from the Federal Reserve. This has also been a good indicator for the strength of Genuine Parts' industrial business and therefore could reinforce that Genuine Parts' looks to be tracking ahead of plan so far in the third quarter. 

Disclosure: Long GPC