Group 1 Automotive (NYSE:GPI) Announces Earnings Results, Misses Expectations By $2.32 EPS

Key Points

• Group 1 Automotive reported Q1 adjusted EPS of $8.66, missing analysts' consensus of $10.98, and revenue of $5.41 billion versus estimates of $5.82 billion, with revenue down 1.8% year‑over‑year.
• The company is implementing U.S. cost actions — nearly 700 headcount reductions plus vendor cuts — to deliver about $50 million of annualized savings starting in Q2, while continuing disciplined capital allocation including disposals, targeted U.K. deals and repurchasing ~205k shares with ~$306M remaining on the buyback.
• After‑sales and F&I are bright spots (U.S. customer‑pay gross profit +~6%, U.K. parts & service +~20%), but used‑vehicle profitability is under pressure with same‑store GPUs down ~3% due to constrained sourcing and a lighter late‑model trade‑in mix.

Group 1 Automotive (NYSE:GPI - Get Free Report) issued its quarterly earnings data on Thursday. The company reported $8.66 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $10.98 by ($2.32), FiscalAI reports. Group 1 Automotive had a return on equity of 17.39% and a net margin of 1.44%.The business had revenue of $5.41 billion during the quarter, compared to the consensus estimate of $5.82 billion. During the same quarter in the prior year, the company posted $10.17 earnings per share. The company's revenue for the quarter was down 1.8% on a year-over-year basis.

Here are the key takeaways from Group 1 Automotive's conference call:

• Reported Q1 results of $5.4 billion revenue, $878 million gross profit, $104 million adjusted net income, and $8.66 adjusted diluted EPS, indicating resilience across the business despite challenging conditions.
• Implemented U.S. cost actions—nearly 700 headcount reductions plus contract/vendor cuts—to deliver about $50 million of annualized savings (roughly $12.5M per quarter), with benefits beginning in Q2 to restore SG&A leverage.
• After-sales and F&I are key bright spots—U.S. same-store customer-pay gross profit rose ~6%, U.K. parts & service same-store gross profit grew ~20%, and virtual F&I (in ~1/3 of U.S. stores, doing 20% of deals) is improving PRUs, speed and F&I productivity.
• Used-vehicle profitability is under pressure—same-store GPUs declined ~3% as sourcing is constrained, inventory mix is light on lower-cost higher-margin late-model trade-ins (days' supply ~26), and rising negative equity is a headwind to conversions.
• Disciplined capital allocation continues—disposed of underperforming/high-cost stores, completed targeted U.K. acquisitions and a Geely framework (three Geely dealerships to open in Q2), and repurchased ~205k shares (~1.7%) with ~$306M remaining on the buyback program.

Group 1 Automotive Trading Up 2.0%

GPI stock traded up $7.06 during midday trading on Thursday, reaching $356.27. The company's stock had a trading volume of 305,694 shares, compared to its average volume of 176,569. Group 1 Automotive has a 52 week low of $292.44 and a 52 week high of $488.39. The stock has a market cap of $4.23 billion, a PE ratio of 14.25, a price-to-earnings-growth ratio of 0.82 and a beta of 0.88. The company has a quick ratio of 0.27, a current ratio of 1.08 and a debt-to-equity ratio of 1.23. The business's 50-day simple moving average is $328.17 and its 200-day simple moving average is $371.32.

Group 1 Automotive Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Monday, March 16th. Shareholders of record on Monday, March 2nd were paid a $0.55 dividend. The ex-dividend date of this dividend was Monday, March 2nd. This is a boost from Group 1 Automotive's previous quarterly dividend of $0.50. This represents a $2.20 dividend on an annualized basis and a yield of 0.6%. Group 1 Automotive's payout ratio is 8.80%.

Wall Street Analysts Forecast Growth

A number of equities research analysts have issued reports on GPI shares. Barclays decreased their price target on shares of Group 1 Automotive from $470.00 to $455.00 and set an "overweight" rating for the company in a report on Tuesday, April 7th. Evercore initiated coverage on shares of Group 1 Automotive in a research report on Tuesday, January 20th. They issued an "outperform" rating and a $500.00 price target for the company. Bank of America initiated coverage on shares of Group 1 Automotive in a research report on Wednesday, March 4th. They issued a "buy" rating for the company. Benchmark raised shares of Group 1 Automotive from a "hold" rating to a "buy" rating and set a $425.00 price target for the company in a research report on Monday, March 30th. Finally, Citigroup dropped their price target on shares of Group 1 Automotive from $490.00 to $420.00 and set a "buy" rating for the company in a research report on Wednesday, April 8th. Seven research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $447.14.

Hedge Funds Weigh In On Group 1 Automotive

Hedge funds and other institutional investors have recently bought and sold shares of the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in shares of Group 1 Automotive by 3.0% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 7,766 shares of the company's stock worth $2,966,000 after purchasing an additional 227 shares in the last quarter. Millennium Management LLC boosted its position in shares of Group 1 Automotive by 20.3% during the first quarter. Millennium Management LLC now owns 37,028 shares of the company's stock worth $14,143,000 after purchasing an additional 6,239 shares in the last quarter. Dynamic Technology Lab Private Ltd bought a new position in shares of Group 1 Automotive during the first quarter worth $229,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its position in shares of Group 1 Automotive by 6.2% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 41,872 shares of the company's stock worth $15,993,000 after purchasing an additional 2,452 shares in the last quarter. Finally, American Century Companies Inc. boosted its position in shares of Group 1 Automotive by 46.7% during the second quarter. American Century Companies Inc. now owns 2,753 shares of the company's stock worth $1,202,000 after purchasing an additional 877 shares in the last quarter. 99.92% of the stock is owned by institutional investors.

Group 1 Automotive Company Profile

Group 1 Automotive, Inc NYSE: GPI is an international automotive retailer headquartered in Houston, Texas. The company operates an extensive network of franchised dealerships, offering new and pre-owned vehicles from leading domestic and import manufacturers. In addition to vehicle sales, Group 1 Automotive provides a full complement of aftersales services, including finance and insurance products, parts distribution, collision repair centers and vehicle maintenance.

Founded in 1997, Group 1 Automotive has grown through both organic expansion and strategic acquisitions to establish a presence across the United States, the United Kingdom and Brazil.

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