Group 1 (GPI) Q3 Earnings & Sales Top Estimates, Rise Y/Y
Group 1 Automotive GPI reported third-quarter 2023 adjusted earnings per share of $12.07, which beat the Zacks Consensus Estimate of $11.32. The bottom line also increased from the prior-year quarter’s earnings of $12 per share. The automotive retailer registered net sales of $4,705.1 million, beating the Zacks Consensus Estimate of $4,554 million. Also, the top line rose from the year-ago quarter’s $4,163.4 million.
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise
Group 1 Automotive, Inc. price-consensus-eps-surprise-chart | Group 1 Automotive, Inc. Quote
Quarter Highlights
New-vehicle retail sales increased 20.2% from the prior-year quarter to $2,264.5 million and exceeded our projection of $2,058.5 million on the back of higher-than-expected volumes. Total retail new vehicles sold were 45,350 units, surpassing our forecast of 40,474 units on improving inventory levels and robust demand despite the high costs of vehicle financing. Average selling price per unit was $50,300, up 4.8% year over year. The gross profit from the new vehicle retail unit totaled $194.3 million, decreasing 6% year over year but exceeding our estimate of $183.5 million owing to revenue outperformance.
Used-vehicle retail sales inched up 4.8% from the year-ago period to $1,559.6 million and outpaced our forecast by $1,420 million on higher-than-expected volumes. Total retail used vehicles sold were 50,799 units, up 4.9% year over year and above our expectation of 50,445 units. Average selling price per unit came in at $30,701, down 0.1% year over year. The gross profit from the unit was $81.4 million, rising 7% year over year and topping our estimate of $64.6 million.
Used-vehicle wholesale sales rose 28.1% year over year to $114.7 million and beat our expectation of $96.2 million. The unit recorded a gross loss of $2.3 million, widening from $1.5 million incurred in the year-ago period. In the Parts and Service business, the top line rose 10% from the year-ago quarter to $566.9 million and gross profit increased 10% year over year to $313.5 million. Revenues from the Finance and Insurance (F&I) business came in at $199.4 million, unchanged from the year-ago period levels.
Segments in Detail
In the reported quarter, revenues in the U.S. business segment climbed 11.9% year over year to $3,899.7 million and exceeded our forecast of $3,528.6 million on solid sales of new vehicle and used vehicle units. The segment’s gross profit grew 3.6% to $682.7 million and came ahead of our prediction by $51.2 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 37,079, 39,676 and 8,380, respectively.
In the reported period, revenues rose 18.6% year over year to $805.5 million for the U.K. business segment, beating our estimate of $777 million due to higher-than-expected sales of new vehicles, used vehicles, parts/services and F&I units. Gross profit was $103.5 million, up 10.9% from the year-ago quarter and in line with our expectations. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,271, 11,123 and 3,360, respectively.
Financial Position
Selling, general and administrative expenses were up 10.1% year over year to $496.7 million. Group 1 Automotive had cash and cash equivalents of $52.9 million as of Sep 30, 2023, up from $47.9 million as of 2022-end. Total debt was $2,118.2 million as of Sep 30, 2023, up from $2,082.5 million recorded on Dec 31, 2022.
During the quarter under discussion, GPI repurchased 246,433 shares at an average price of $261.89 per common share for a total of $64.5 million. The company currently has $184.9 million remaining on its authorized stock buyback program.
Zacks Rank & Key Picks
Group 1 Automotive has a Zacks Rank #3 (Hold) currently.
A few top-ranked players in the auto space include Toyota TM, Honda HMC and Nissan NSANY. While TM and HMC sport a Zacks Rank #1 (Strong Buy) each, NSANY carries a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 27.5%, respectively. Earnings estimates for fiscal 2024 and 2025 have been revised upward by 4 cents and 21 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s fiscal 2024 sales and EPS implies year-over-year growth of 7.7% and 29.4%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 1 cent and 18 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for NSANY’s fiscal 2024 EPS implies year-over-year growth of 12.6%. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 10 cents and 3 cents, respectively, in the past 30 days.
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