Greg Melich

Bert confirmed back-half top-line inflation around 2%, with SG&A pressure from rent and freight running mid-single digits; answered directly.

Will reaffirmed the two-company separation as the primary path while noting the bolt-on M&A pipeline remains active; direct.

Will described separation as amplifying collaborative culture rather than disrupting it. Cross-functional, cross-business, global project team meeting weekly. Consistent culture geographically and across business units is special sauce that will carry forward.

Bert quantified Q2 EBITDA headwind at $10-20M net negative from conflict. Headwind from increased COGS and freight partially offset by pricing pass-through but muted by demand softness. Full-year pricing expected to remain around 2% split between tariffs and general inflation. April started steady.

Bert deferred detailed capital allocation policies to future disclosure. Confirmed focus on investment-grade ratings for both businesses, balanced shareholder returns, and no change to GPC dividend for 2026 with 3.2% increase announced.

Bert confirmed 2% full-year inflation assumption with about half from tariffs. Pricing benefits more compressed in H2 as tariff benefits lapped. Not materially different between auto and industrial segments. Will added tariff supplier discussions have moderated to ordinary-course commercial cadence.

Will cited acceleration in sales effectiveness, technology investment, and supply chain from working as one team. Strategic review underway with full executive off-site conducted. Update planned for 2026 Investor Day.

Bert confirmed no unusual factors beyond acquisition anniversary lapping. Gross margin expansion driven by continued sourcing and pricing execution.

Bert confirmed approximately 300bp H2 inflation implied by full-year 200bp guidance. H2 margin improvement driven by better top line, accelerating restructuring benefits, full-year impact of prior year actions, and acquisition synergies gating.

Bert confirmed additional restructuring focused on IT, global efficiencies, and European operations streamlining. Combined 2024-2025 actions already benefiting current year at $0.18/share in Q2, tracking to over $200 million annualized benefit into 2026.

Will confirmed 44 stores acquired in Q1 but pace moderating from 2024. Focus shifting to running great stores and sales excellence.

Bert confirmed rational market pricing power in inflationary periods. Will noted guidance range is wide enough for upside if tariff situation resolves quickly.

Will gave a nuanced answer saying it varies by category between protecting dollars vs rate, noting gross margin rate is important to financial expression.

Bert confirmed starting below the 2-4% range with back-half weighting to reach the full-year target.

Kirby said everything is on the table in supplier negotiations and reaffirmed the margin guide, but did not quantify any energy cost offset.

Kirby corrected the premise directly, explaining the supplier-as-importer model means refunds show up in negotiated cost of goods rather than as rebate checks.

Jeremy confirmed 3% same-SKU inflation assumption unchanged for full year, explaining they don't speculate on future price movements without clarity on what they've already seen.

Brad declined to quantify specific tax refund impact but acknowledged both tax refunds and weather were tailwinds, with potential pent-up demand contributing.

Brad noted Q4 DIY pressure was similar to Q3 on larger ticket jobs but showed improvement in December with winter weather. Tax season impact is still to be determined across income levels. Jeremy added DIY trends have stabilized and are now consistent with the broader pattern seen across 2025 into 2026.

Jeremy confirmed the gap between same-SKU inflation and average ticket is more basket mix than items-per-basket pressure, driven by strong performance in lower-ticket maintenance categories which naturally carry smaller basket sizes.

Jeremy confirmed mid-single-digit same SKU expected in Q4/Q1 but most cost increases from the current tariff regime have already flowed through. Incremental changes are possible but the substantial adjustments are mostly behind them.

Brad described historical pattern of deferral in larger ticket DIY jobs like chassis work that can be delayed weeks or months but not years. Currently seeing some potential deferral in Q3 in select categories but not across the board.

Jeremy noted the quarterly gross margin cadence will resemble 2024, with Q2 being softer and the back half performing better, keeping the full year solidly within the 51.2-51.7% guidance range.

Brad noted M&A opportunities particularly in the mid-Atlantic/NYC corridor, mainly onesies-twosies and small chains of 5-7 stores. Some competitor disruption creating opportunities to convert jobbers to the Parts City program.

Jeremy noted Q4 gross margin pressures from Canadian inclusion, professional mix, seasonal product mix, and distribution relocation costs, offset by steady acquisition cost improvements from supplier partnerships.

Jeremy confirmed trends were similar to prior years with the ticket complexity benefit slightly compressed by a more pressured consumer, expecting modest same-SKU inflation plus complexity benefit and ticket count growth from professional in 2025.

Gary said blended inflation is low single digits and stable, with the Q4 uptick concentrated in non-foods memory and petroleum items, and explained the LIFO true-up math.

Gary attributed nearly all the inflation uptick to gas; fresh and food and sundries were deflationary (produce, eggs, dairy) while beef, deli, candy, and nonfoods (memory, resin) rose.

Gary said Q2 inflation trended toward low single digits versus Q1, with fresh and food and sundries decelerating on produce/eggs/butter/cheese deflation while nonfoods saw a modest tariff flow-through and gold inflation, and noted mix shifts and unit growth are a larger share of ticket growth than price.

Gary said food/fresh inflation is low-to-mid single digit consistent with recent quarters, with ticket growth a combination of natural inflation, larger pack sizes, upgraded items and unit growth.

Gary said Q4 inflation is consistent with Q3 with offsetting category dynamics, and noted the co-brand card added 5% rewards on gas and saw strong member response to modernized card benefits.

Gary confirmed grocery inflation remains low single digits, pegged straight-math digital at ~8% of sales (~12% ex-gas), and Ron said Costco Logistics handles 80-85% of big and bulky deliveries.

Gary described COST's retail media approach as multi-year build, with value returned to members rather than a new margin stream.

Gary said digital is 7-8% of total sales, north of 10% including third-party and ex-gas. Ron noted Kirkland Signature at about 33% penetration in the US, growing faster than overall business.

Meisenzahl reaffirmed a historical-trend glide path but declined to name a realization percentage or commit to gross margin expansion in the back half.

Ben quantified that gross margin expansion would have exceeded 100 bps ex-Suvenil. Expects continued expansion into selling season though acknowledged some potential lumpiness.

Heidi called it a 'jump ball' environment and emphasized balancing price with volume capture as a strategic priority.

Al pivoted to operating margin focus; confirmed low single-digit volume growth would be accretive to operating margin and drive incremental leverage.

Al declined to size the exact volume drag but attributed 12th straight quarter of GM expansion to price effectiveness and Paint Stores mix; supply chain inefficiencies from lower production gallons remain a drag.

Al said Q1 likely is largest improvement due to last year's weak Q1 base; expects similar margin improvement in H2 as H1; other segments adding price increases to help.

Jim cited low single-digit raw basket inflation (industrial resins, TiO2, solvents, packaging) with Asian epoxy tariffs already in effect from September/November; additional potential tariffs not in guide. Al added they are prepared to take incremental price if new tariffs are significant.

Brandon quantified the Q2 tariff benefit at $80 million or $0.11, largely offset by fuel and transportation pressure, noted the Q2 refund is a smaller portion of total IEEPA tariffs paid, and said no second-half refunds are in the outlook given timing uncertainty; any further benefits would be reinvested in customer-facing actions.

Marvin credited higher traffic, increased conversion, improved digital experience, new fulfillment options, and the Mylow AI agent (25 million questions, 3x conversion) plus the early marketplace. Brandon added the transaction decline was largely DIY, centered on weather-sensitive outdoor and seasonal categories in Southern geographies.

Brandon noted ticket growth driven primarily by Pro and appliances mix with modest like-for-like inflation consistent with year-to-date trends.

Brandon confirmed 20bps in FY2025 and 30bps incremental wrap for 50bps total annualized in FY2026, with Q4 margin decline driven primarily by FBM layering.

Brandon confirmed muted like-for-like inflation in Q4 and tariffs not explicitly in guidance, though teams are already activating.

Brandon confirmed the operating leverage framework from the Analyst Day still applies on a full-year basis.

Rainey said tariff rates are assumed at current levels and stressed the fundamentally more profitable growth mix, with confidence in continued outsized OI growth.

Furner attributed traffic to merchandising, EDLP, and eCommerce speed. Rainey said tariff refunds would be prioritized for price investment to support customer retention and share gains.

Rainey said most recent quarter like-for-like inflation trending a little bit above 1% with food inflation a little bit less and GM a little bit more. Generally the outlook for next quarter and balance of year. Maximum fair pricing legislation on drugs expected to contribute about 100 basis point headwind for full year with about 30 basis points in Q4 having only 1 month. Health and wellness business continues doing well with strong comps but will face that headwind for the year. Excited about supplier commentary focusing on lower prices which plays to everyday low prices value proposition. Gaining share among all income demographics.

Furner said best quarter for net additions since program launch driven by delivery speed with about 35% of store deliveries sub 3 hours and fastest growth channel sub an hour. NPS levels on delivery and shipping at highest ever highly correlated to speed and accuracy. Supply chain and inventory accuracy investments paying off with digital agents improving assortments. OnePay credit card with 5% back for members getting good uptake. Over 7,400 rollbacks reinforcing value. Added streaming option for customers to choose. Progress on delivery speed accuracy and credit card launch are the key drivers.

McMillon said impact happens gradually starting April through May with focus on back-to-school receipts. Tariff paid at customs so cost elevated even if rate later decreases. Not a moment-in-time except for seasonal items. Food inflation very much on mind with customers not wanting more after years of price increases. By category it varies with China items having higher impact. Upward pressure began April and plays through entire year on imported items. Working for years on supply chain flexibility and sourcing diversification. Relative to others well positioned.

John Furner said Walmart+ helps customers amortize delivery costs, with focus on flawless execution enabling cross-sell. Kath McLay highlighted China Sam's membership income up 30%. Chris Nicholas cited all-time high membership with plus penetration up 300 basis points.