Group 1 Automotive Inc (NYSE:GPI) reported second-quarter FY24 sales growth of 3% year-on-year to $4.696 billion, missing the analyst consensus estimate of $4.71 billion.
New vehicle retail sales grew 5.4% to $2.4 billion, Used vehicle sales climbed 0.2% to $1.5 billion and sales of Parts and services increased 2.2% to $574.5 million.
Gross profit for the quarter decreased 1.2% to $766.5 million, and the gross margin compressed 70 basis points to 16.3%.
Operating income plunged 10.9% to $241.1 million and the operating margin contracted 80 basis points to 5.1%.
Adjusted EPS of $9.80 beat the consensus estimate of $9.36.
“Our U.S. team persevered in the face of adversity this quarter. From extreme weather events in Texas and Oklahoma to the CDK outage, we experienced exemplary teamwork, focused on caring for our communities and team members and serving our valued customers efficiently and effectively. Despite these challenges, the U.S. team produced record quarterly new vehicle, parts and service and F&I revenues,” said President and CEO Daryl Kenningham.
The cybersecurity incident experienced by CDK Global temporarily disrupted the company’s business applications and processes in its U.S. operations that rely on CDK’s dealers’ systems.
In the second quarter, the company repurchased 149,570 shares at an average price per common share of $307.82, for a total of $46.0 million. The company currently has $204.6 million remaining in its Board-authorized common share repurchase program.
Group 1 held $64.4 million in cash and equivalents as of June-end. Inventories as of June-end increased 20% to $2.36 billion from December-end.
“Our U.K. team remains focused on the acquisition of Inchcape’s U.K. retail automotive business planned for Q3 2024, and we look forward to the successful completion of the transaction which will further strengthen our U.K. presence through the addition of quality assets with an expanded geographic footprint,” Kenningham added.
Price Action: GPI shares closed lower by 1.19% at $304.76 on Tuesday.
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