Group 1 Automotive Inc. said its third-quarter profit soared to an all-time record, thanks to efficiencies created during the coronavirus pandemic.
The Houston dealership group’s revenue fell 2.5 percent to $3 billion, while total gross profit grew 10 percent to $512 million and net income more than tripled to a record $126.4 million. Earnings per share hit an all-time record of $6.83.
“Our record earnings are a function of our hard working, resilient teammates and a responsive and creative management team that quickly reacted to the realities of the pandemic,” CEO Earl Hesterberg said in a statement.
He added that the company targeted a 20 percent efficiency improvement in sales and service profits as it built its U.S. and U.K. businesses back up from steep furloughs in April.
“Lower U.S. vehicle sales were offset by improved F&I performance and higher margins supported by lower inventory levels,” Hesterberg said.
Group 1’s total new-vehicle revenue fell 4.3 percent on an 11 percent drop in unit sales. Retail used-vehicle revenue was flat despite a 7.1 percent unit decline.
The retailer’s parts and service gross profit slid 0.9 percent on a 2.1 percent decline in revenue. Finance and insurance gross profit per retail vehicle increased 12 percent to $1,655.
Group 1 shares closed Thursday’s trading down 1.4 percent to $107.48.
Record: Earnings per share of $6.83
Sales: Total third-quarter new-vehicle sales dropped 11 percent to 39,869 across the group’s dealerships in the U.S., U.K. and Brazil. Retail used-vehicle sales fell 7.1 percent to 38,347.
In the U.S. alone, new-vehicle sales slid 15 percent to 27,980, while retail sales of used vehicles decreased 12 percent to 27,694.
Same-store sales: U.S. new-vehicle sales declined 16 percent to 27,696. Same-store retail sales of used vehicles fell 13 percent to 27,229.
Group 1 ranks No. 4 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 169,136 new vehicles in 2019.