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Group 1 Automotive (GPI) Q1 Earnings & Sales Beat, Rise Y/Y

Group 1 Automotive, Inc. GPI reported adjusted earnings per share of $5.57 in first-quarter 2021, beating the Zacks Consensus Estimate of $4.39. This outperformance stemmed from the higher-than-anticipated gross profit in the new vehicle retail, used vehicle retail, used-vehicle wholesale, and the Finance and Insurance segments.

Moreover, the bottom line comes in significantly higher than the prior-year quarter’s $1.66 per share, marking a whopping growth of 236.2%.
 
Additionally, the automotive retailer reported net sales of $3,010 million, topping the Zacks Consensus Estimate of $2,604 million. Also, the top-line figure comes in 11.9% higher than the year-ago quarter’s $2,690.8 million.

Q1 Highlights

New-vehicle retail sales increased 15% from the prior-year quarter to $1,543.4 million. In addition, the figure exceeded the Zacks Consensus Estimate of $1,394 million. Also, gross profit from the unit totaled $99 million, up 57.7% year over year. The reported profit figure also surpassed the consensus mark of $91 million.

Used-vehicle retail sales rose 15.4% from the year-ago quarter to $898.8 million. The sales figure also outpaced the consensus mark of $829 million. Further, gross profit from the unit summed $59.6 million, up 41.4% year over year. The reported profit figure also beat the consensus mark of $52 million.

However, used-vehicle wholesale sales declined 7.2% from the corresponding quarter last year to $80.2 million, missing the consensus mark of $87 million. Gross profit from used-vehicle wholesale sales amounted $3.9 million, skyrocketing 293.5% year on year and also outpacing the consensus mark of $3 million.

For the Parts and Service business, the top line slid 2.7% from the year-ago period to $360.6 million. In addition, the revenue figure missed the Zacks Consensus Estimate of $379 million. Gross profit from the segment summed $201.1 million, inching up 1.5% year on year but falling shy of the consensus mark of $204 million.

Nonetheless, revenues from the Finance and Insurance business grew 12.9% from the prior-year period to $127 million, topping the consensus mark of $123 million. Segmental gross profit of $127 million grew 12.9% on a yearly basis and also beat the consensus estimate of $123 million.

Segments in Detail

For the reported quarter, revenues in the U.S. business segment climbed 19.8% year on year to $2,404.3 million. The segment’s gross profit also scaled up 21.8% year over year to $415.3 million. During the March-end quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 29,152, 30,431 and 6,440, respectively.

For the January-March period, revenues tailed off 6.9% year over year to $549.6 million for the U.K. business segment. Yet, gross profit summed $66 million, inching up 1.8% from the first quarter of 2020. During the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 6,540, 7,112 and 3,138, respectively.

Revenues for the Brazil business segment plunged 39.4% year over year to $56.1 million during the first quarter. Further, the segment’s gross profit dipped 12.1% year over year to $9.4 million. In the reported quarter, retail new-vehicle, used-vehicle and wholesale used-vehicle units sold were 1,171, 516 and 234, respectively.

Financial Position

Group 1 Automotive had cash and cash equivalents of $82.9 million as of Mar 31, 2021, up from $19.2 million in the corresponding period of 2020. Long-term debt totaled $1,282.6 million as of Mar 31, 2021, up from $1,137.7 million recorded in the comparable period of 2020.

Group 1 Automotive, peers of which include AutoNation AN, Lithia Motors LAD and Penske Automotive PAG, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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