Group 1 Automotive Shares Decline After 3rd Quarter Earnings Fall Short of Expectations

HOUSTON - Group 1 Automotive (NYSE:GPI) reported third-quarter earnings that fell below analysts' expectations, causing shares to drop by 3% in early trading on Wednesday.

The automotive retailer reported adjusted earnings of $9.90 per share, below the consensus estimate of $10.07. Revenue came in just above expectations at $5.2 billion, compared to a forecast of $5.1 billion.

Total gross profit rose by 8.4% year-over-year to $852.7 million. However, gross profit per new vehicle decreased by 20.5% to $3,407 as inventory levels normalized.

CEO Daryl Kenningham stated, "We continue to grow our revenues through acquisitions. During the quarter, we completed strategic UK operations, adding 58 dealerships." He added, "We were pleased to set quarterly records in both new and used vehicle sales units. However, gross profit per unit for new and used vehicles fell by $161 and $63 respectively compared to the second quarter."

The company noted that global sales stoppages for certain BMW and Lexus models, along with weather events in Texas and the Southeast, impacted quarterly sales.

Same-store new vehicle retail sales remained flat at $2.2 billion compared to the same period last year, while used vehicle retail sales declined by 6.8% to $1.4 billion.

During the quarter, Group 1 repurchased 85,245 shares at an average price of $349.55 per share. As of September 30, the company had $174.8 million remaining under its share repurchase authorization.