Yahoo Finance Group 1 Automotive Inc (GPI) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Adjusted Net Income: $130 million
Adjusted Diluted EPS: $9.49
Total Revenue: $4.5 billion
Parts and Service Revenue: $576.2 million
US New Vehicle Units Sold: Up 8% on a same-store basis, 14% on a reported basis
US Used Car Gross Profit per Unit: Increased $245 sequentially
F&I Gross Profit per Unit: $2,340, minimal decline sequentially, 3% increase year-over-year
US Parts and Service Revenue: Approximately $500 million
UK Quarterly Revenues: Record high, driven by new vehicles and parts and service
UK Used Vehicle Gross Profit per Unit: Improved $229 or 20% sequentially
Adjusted Operating Cash Flow: $171 million
Free Cash Flow: $128 million after $43 million of CapEx
Share Repurchases: $54 million, approximately 203,000 shares at an average price of $264.41
Total Immediate Available Liquidity: $463 million
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the benefits of the Inchcape acquisition and how it might help solve management issues in the UK? A: Daryl Kenningham, President and CEO of Group 1 Automotive, highlighted the high talent level at Inchcape, noting that the acquisition not only brings a well-run company into the fold but also enhances management depth, which is expected to address some ongoing management challenges in the UK.
Q: What does the improved partnership with OEMs entail, particularly in terms of acquisitions and service areas? A: Daryl Kenningham explained that OEMs are increasingly valuing partnerships with fewer, larger partners, similar to models seen in the UK. This approach benefits acquisitions and enhances service areas like parts and service, as OEMs seek dealer groups that can innovate and execute effectively.
Q: Could you provide details on the financial performance in Q1 2024, particularly regarding acquisitions and share repurchases? A: Daniel McHenry, CFO, reported that Group 1 Automotive had a strong quarter with $130 million in adjusted net income and a record $4.5 billion in total revenues. The company also continued its strategic capital deployment, spending $54 million on share repurchases and managing a robust balance sheet to support future growth.
Q: How are the cost-cutting measures implemented in the UK impacting financial performance? A: Daniel McHenry noted that the cost-cutting measures, including reductions in SG&A and headcount, initiated in Q4 2023 are taking effect, with significant savings expected to be more fully realized in Q2 2024. These efforts are aimed at improving profitability and efficiency in the UK operations.
Q: What trends are you observing in the used vehicle market, and how is Group 1 Automotive adapting? A: Daryl Kenningham mentioned that despite challenges, the company is leveraging new technology and adjusting policies to maintain strong sales velocity and profitability in the used vehicle segment. Efforts include better inventory management and pricing strategies to adapt to market conditions.
Q: Can you comment on the trends in vehicle leasing in the US market? A: Daniel McHenry provided insights into leasing trends, noting a significant increase in new vehicle leasing, which accounted for 18.6% of new vehicle sales, up from previous years. This shift indicates a recovering leasing market which may influence future sales strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
