Group 1 Reports ‘Solid’ Performance

By Staff Writer October 07, 2020

Group 1 Automotive Inc., an international, Fortune 500 automotive retailer, reported preliminary financial results for the three months ended Sept. 30. Group 1 expects diluted earnings per common share to be between $6.25 and $6.65 and adjusted diluted earnings per common share between $6.40 and $6.80. Adjusted earnings per share reflects the exclusion of the $3.3 million pre-tax expense or approximately $0.15 EPS impact of redeeming all previously issued 5.00 percent bonds due June 2022. This represents a 206 percent to 226 percent increase on a GAAP basis and a 112 percent to 125 percent increase on an adjusted basis as compared to third quarter 2019 results of $2.04 and $3.02, respectively.

This earnings increases represents a continuation of the solid profit performance of May and June 2020. Group 1 believes that new and used vehicle gross margins in the U.S. have more than offset reduced vehicle sales volumes stemming from low inventory levels, resulting in year-over-year gross profit growth. U.S. SG&A expense as a percentage of gross profit continues to be well below historical levels and was generally consistent with second quarter 2020 reported non-GAAP results. Group 1 expects a material percentage of these cost reductions to be permanent.

Group 1’s U.K. operations also contributed to the significant third quarter profit improvement with vehicle sales and service levels recovering from the extensive lockdowns that occurred over April and May. U.K. new vehicle same store sales increased approximately 20 percent over 2019 and used vehicle sales were up mid-single digits. U.K. SG&A expense as a percentage of gross profit will be well below 2019 levels, and we expect a significant portion of those cost reductions to be permanent as well. Additionally, Group 1’s Brazilian operations were profitable for the quarter despite severe traffic reductions in Sao Paulo due to the pandemic.

The foregoing estimated results are based on preliminary information as of this date and are subject to change following completion of the quarter-end review process and other developments arising between now and the time financial results are finalized. In addition, these preliminary unaudited results are not comprehensive financial results for the quarter ending September 30, 2020, should not be viewed as a substitute for complete GAAP financial statements or more comprehensive financial information, and are not indicative of the results for any future period.

Additionally, Group 1 is announcing a new $200 million share repurchase authorization.

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Last modified on Wednesday, 07 October 2020 14:26