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Why Is Group 1 Automotive (GPI) Up 1.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Group 1 Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Group 1 Q1 Earnings Miss Expectations, Decline Y/Y
Group 1 reported first-quarter 2024 adjusted earnings per share (EPS) of $9.49, missing the Zacks Consensus Estimate of $9.52 and falling 13.2% year over year. The automotive retailer registered net sales of $4.5 billion, beating the Zacks Consensus Estimate of $4.3 billion. Also, the top line rose from the year-ago quarter’s $4.13 billion.
Quarter Highlights
New vehicle retail sales increased 11.6% from the prior-year quarter to $2.18 billion and exceeded our projection of $1.98 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 44,302 units, increasing 11.7% year over year and surpassing our forecast of 39,427 units. Average selling price per unit was $49,709, up 0.1% year over year. The gross profit from the new vehicle retail unit totaled $159.5 million, decreasing 14.6% year over year.
Used-vehicle retail sales rose 5% from the year-ago period to $1.42 billion and outpaced our forecast of $1.24 billion on higher-than-expected volume. Total retail used vehicles sold were 49,183 units, up 8.2% year over year, exceeding our expectation of 41,391 units. Average selling price per unit came in at $28,806, down 3% year over year. The gross profit from the unit was $82.1 million, rising 6.9% year over year.
Used-vehicle wholesale sales fell 5.3% year over year to $106 million and missed our expectation of $128.9 million. The unit recorded a gross loss of $0.9 million against the gross profit of $2 million in the year-ago period. In the Parts and Service business, the top line rose 5.1% from the year-ago quarter to $576.2 million and gross profit increased 5.3% year over year to $313 million. Revenues from the Finance and Insurance business came in at $188.9 million, up 14.4% from the year-ago period’s level
Segments in Detail
In the reported quarter, revenues from the U.S. business segment climbed 9.1% year over year to $3.65 billion and exceeded our forecast of $3.3 billion, largely on solid sales of new vehicles. The segment’s gross profit grew 3.5% to $639.1 million and came ahead of our prediction of $616 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 35,341, 37,885 and 9,088, respectively.
In the reported period, revenues rose 4.7% year over year to $824.8 million for the U.K. business segment, exceeding our estimate of $786.4 million due to robust sales of new vehicles. Gross profit was $103.5 million, down 6.2% from the year-ago quarter and missing our projection of $113.5 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,961, 11,298 and 2,740, respectively.
Financial Position
Selling, general and administrative expenses were up 2.9% year over year to $476.1 million. Group 1 had cash and cash equivalents of $41.9 million as of Mar 31, 2024, down from $57.2 million as of 2023-end. Total debt was $2.6 billion as of Mar 31, 2024, up from $2.1 million as of Dec 31, 2023.
During the quarter under discussion, GPI repurchased 203,350 shares at an average price of $264.41 per common share for a total of $53.8 million. The company currently has $89.6 million remaining on its authorized stock buyback program.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Group 1 Automotive has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Group 1 Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Group 1 Automotive (GPI) Up 1.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Group 1 Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Group 1 Q1 Earnings Miss Expectations, Decline Y/Y
Group 1 reported first-quarter 2024 adjusted earnings per share (EPS) of $9.49, missing the Zacks Consensus Estimate of $9.52 and falling 13.2% year over year. The automotive retailer registered net sales of $4.5 billion, beating the Zacks Consensus Estimate of $4.3 billion. Also, the top line rose from the year-ago quarter’s $4.13 billion.
Quarter Highlights
New vehicle retail sales increased 11.6% from the prior-year quarter to $2.18 billion and exceeded our projection of $1.98 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 44,302 units, increasing 11.7% year over year and surpassing our forecast of 39,427 units. Average selling price per unit was $49,709, up 0.1% year over year. The gross profit from the new vehicle retail unit totaled $159.5 million, decreasing 14.6% year over year.
Used-vehicle retail sales rose 5% from the year-ago period to $1.42 billion and outpaced our forecast of $1.24 billion on higher-than-expected volume. Total retail used vehicles sold were 49,183 units, up 8.2% year over year, exceeding our expectation of 41,391 units. Average selling price per unit came in at $28,806, down 3% year over year. The gross profit from the unit was $82.1 million, rising 6.9% year over year.
Used-vehicle wholesale sales fell 5.3% year over year to $106 million and missed our expectation of $128.9 million. The unit recorded a gross loss of $0.9 million against the gross profit of $2 million in the year-ago period. In the Parts and Service business, the top line rose 5.1% from the year-ago quarter to $576.2 million and gross profit increased 5.3% year over year to $313 million. Revenues from the Finance and Insurance business came in at $188.9 million, up 14.4% from the year-ago period’s level
Segments in Detail
In the reported quarter, revenues from the U.S. business segment climbed 9.1% year over year to $3.65 billion and exceeded our forecast of $3.3 billion, largely on solid sales of new vehicles. The segment’s gross profit grew 3.5% to $639.1 million and came ahead of our prediction of $616 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 35,341, 37,885 and 9,088, respectively.
In the reported period, revenues rose 4.7% year over year to $824.8 million for the U.K. business segment, exceeding our estimate of $786.4 million due to robust sales of new vehicles. Gross profit was $103.5 million, down 6.2% from the year-ago quarter and missing our projection of $113.5 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,961, 11,298 and 2,740, respectively.
Financial Position
Selling, general and administrative expenses were up 2.9% year over year to $476.1 million. Group 1 had cash and cash equivalents of $41.9 million as of Mar 31, 2024, down from $57.2 million as of 2023-end. Total debt was $2.6 billion as of Mar 31, 2024, up from $2.1 million as of Dec 31, 2023.
During the quarter under discussion, GPI repurchased 203,350 shares at an average price of $264.41 per common share for a total of $53.8 million. The company currently has $89.6 million remaining on its authorized stock buyback program.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Group 1 Automotive has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Group 1 Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.