Group 1 Automotive (NYSE:GPI) Announces Quarterly Earnings Results

Group 1 Automotive (NYSE:GPI) issued its earnings results on Thursday. The company reported $9.61 earnings per share for the quarter, missing analysts’ consensus estimates of $10.60 by ($0.99), FiscalAI reports. Group 1 Automotive had a net margin of 1.46% and a return on equity of 16.63%. The firm had revenue of $5.39 billion for the quarter, compared to the consensus estimate of $5.66 billion. During the same period last year, the firm earned $10.82 earnings per share. The company’s revenue for the quarter was down 5.6% on a year-over-year basis.

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

• Challenging U.S. quarter: Q2 revenue was $5.4 billion and adjusted EPS was $9.61, but U.S. new- and used-vehicle volumes declined amid affordability pressures, limited used-vehicle sourcing, inventory issues, and temporary disruption from store rebranding.
• Hennessy acquisition expands Atlanta presence: Group 1 agreed to acquire 10 dealerships for approximately $1.3 billion, increasing its Atlanta footprint from three to 15 stores. The company expects the transaction to be immediately EPS-accretive, with the dealerships generating about $1.7 billion in annual revenue and EBITDA margins above 7%.
• Significant cost reductions were completed: U.S. operations exceeded their target of eliminating 700 positions and $50 million in annual expenses. Management expects approximately $12.5 million of quarterly savings in the second half of 2026, flowing into 2027.
• After-sales remains resilient but faces changing customer behavior: Same-store U.S. customer-pay revenue rose 4%, while warranty revenue increased 1%, despite difficult comparisons and a shift toward aftermarket providers as more vehicles leave factory warranty. Group 1 is emphasizing service-advisor training, lower-cost promotions, and its One Care maintenance plan to improve retention.
• Leverage will temporarily increase: The Hennessy purchase is expected to lift rent-adjusted leverage to just under 4 times from 3.3 times at quarter-end. Management plans to use debt financing and planned dispositions to return leverage to its target level by mid-to-late 2027, and does not expect to repurchase shares before the acquisition closes.

Group 1 Automotive Stock Down 16.2%

Shares of NYSE GPI traded down $58.03 during trading hours on Thursday, hitting $299.94. 163,969 shares of the stock were exchanged, compared to its average volume of 183,250. Group 1 Automotive has a 12 month low of $279.10 and a 12 month high of $488.39. The firm has a fifty day moving average price of $314.80 and a 200-day moving average price of $332.43. The company has a quick ratio of 0.21, a current ratio of 0.95 and a debt-to-equity ratio of 1.00. The company has a market cap of $3.57 billion, a PE ratio of 11.50, a PEG ratio of 0.93 and a beta of 0.83.

Group 1 Automotive Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Monday, June 15th. Investors of record on Monday, June 1st were paid a dividend of $0.55 per share. This represents a $2.20 annualized dividend and a dividend yield of 0.7%. The ex-dividend date was Monday, June 1st. Group 1 Automotive’s payout ratio is 8.40%.

More Group 1 Automotive News

Here are the key news stories impacting Group 1 Automotive this week:

• Positive Sentiment: Group 1 agreed to acquire 10 Hennessy Automobile Companies dealerships and related real estate in the Atlanta market. The transaction is expected to add approximately $1.7 billion in annualized revenue and be immediately accretive to earnings per share after closing, subject to regulatory approvals and customary conditions. The deal supports Group 1’s strategy of building dealership clusters in attractive markets. Group 1 Hennessy acquisition announcement
• Positive Sentiment: The company completed a U.S. expense-reduction initiative expected to produce approximately $50 million in annualized savings. Group 1 also acquired two retained dealerships in Atlanta during the quarter, further expanding its regional presence.
• Neutral Sentiment: Management’s presentation emphasized the company’s 251-dealership footprint across the U.S. and U.K. and its focus on premium brands, scale and market clustering. However, the Hennessy transaction’s benefits will depend on closing and successful integration. Group 1 Automotive second-quarter earnings presentation
• Negative Sentiment: Second-quarter results fell short of Wall Street expectations. Adjusted EPS was $9.61, below estimates ranging from $10.60 to $10.79, while revenue of $5.39 billion missed the approximately $5.66 billion consensus.
• Negative Sentiment: Revenue declined 5.6% year over year, and earnings were lower than the prior-year period. Net income from continuing operations fell to $103.0 million from $139.8 million, while diluted EPS from continuing operations declined to $8.62 from $10.77. Reports attributed the weakness to softer consumer spending, increasing concerns about near-term vehicle demand and dealership profitability. Group 1 Automotive second-quarter financial results

Institutional Trading of Group 1 Automotive

Several hedge funds and other institutional investors have recently made changes to their positions in the business. Johnson Financial Group Inc. acquired a new stake in shares of Group 1 Automotive in the 3rd quarter worth $55,000. Aster Capital Management DIFC Ltd purchased a new stake in Group 1 Automotive in the fourth quarter valued at about $57,000. State of Wyoming boosted its holdings in Group 1 Automotive by 28.2% in the fourth quarter. State of Wyoming now owns 191 shares of the company’s stock worth $75,000 after acquiring an additional 42 shares in the last quarter. McMillan Office Inc. purchased a new stake in shares of Group 1 Automotive during the fourth quarter worth about $157,000. Finally, Smartleaf Asset Management LLC increased its holdings in shares of Group 1 Automotive by 10.3% during the fourth quarter. Smartleaf Asset Management LLC now owns 472 shares of the company’s stock valued at $189,000 after acquiring an additional 44 shares in the last quarter. Hedge funds and other institutional investors own 99.92% of the company’s stock.

Wall Street Analyst Weigh In

Several equities analysts have recently commented on GPI shares. UBS Group cut their price target on Group 1 Automotive from $338.00 to $330.00 and set a “neutral” rating on the stock in a research note on Friday, July 10th. JPMorgan Chase & Co. cut their target price on shares of Group 1 Automotive from $390.00 to $380.00 and set an “overweight” rating on the stock in a research report on Monday, July 13th. Benchmark reaffirmed a “buy” rating on shares of Group 1 Automotive in a research report on Friday, July 10th. Evercore set a $440.00 price objective on shares of Group 1 Automotive in a research note on Tuesday, July 7th. Finally, Citigroup lifted their price objective on shares of Group 1 Automotive from $420.00 to $462.00 and gave the company a “buy” rating in a report on Monday, May 11th. Seven research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $426.89.

About Group 1 Automotive

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.