Group 1 Automotive (NYSE:GPI) Announces Earnings Results

Group 1 Automotive (NYSE:GPI) released its quarterly earnings data 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 business had revenue of $5.39 billion during the quarter, compared to the consensus estimate of $5.66 billion. During the same period last year, the business posted $10.82 earnings per share. The firm’s quarterly revenue 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 Performance

Shares of GPI stock traded down $58.53 during trading hours on Thursday, hitting $299.44. The company’s stock had a trading volume of 171,498 shares, compared to its average volume of 183,281. The stock has a market cap of $3.56 billion, a PE ratio of 11.44, a price-to-earnings-growth ratio of 0.93 and a beta of 0.83. Group 1 Automotive has a 12-month low of $279.10 and a 12-month high of $488.39. The company has a 50 day moving average of $314.80 and a 200 day moving average of $332.43. The company has a current ratio of 0.95, a quick ratio of 0.21 and a debt-to-equity ratio of 1.00.

Group 1 Automotive Announces Dividend

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

Several hedge funds have recently added to or reduced their stakes in GPI. Dimensional Fund Advisors LP lifted its holdings in shares of Group 1 Automotive by 3.9% in the 4th quarter. Dimensional Fund Advisors LP now owns 678,316 shares of the company’s stock valued at $266,788,000 after buying an additional 25,209 shares during the period. State Street Corp increased its stake in shares of Group 1 Automotive by 1.5% in the 4th quarter. State Street Corp now owns 505,108 shares of the company’s stock valued at $198,659,000 after purchasing an additional 7,418 shares in the last quarter. Invesco Ltd. boosted its holdings in Group 1 Automotive by 5.2% in the 4th quarter. Invesco Ltd. now owns 151,578 shares of the company’s stock valued at $59,616,000 after purchasing an additional 7,501 shares during the last quarter. Boston Partners increased its holdings in shares of Group 1 Automotive by 8.6% in the 4th quarter. Boston Partners now owns 123,531 shares of the company’s stock valued at $48,690,000 after acquiring an additional 9,828 shares during the period. Finally, Wellington Management Group LLP raised its stake in Group 1 Automotive by 12.9% in the 3rd quarter. Wellington Management Group LLP now owns 111,590 shares of the company’s stock valued at $48,822,000 after purchasing an additional 12,779 shares during the last quarter. 99.92% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

GPI has been the topic of a number of research analyst reports. Citigroup boosted their price target on shares of Group 1 Automotive from $420.00 to $462.00 and gave the stock a “buy” rating in a report on Monday, May 11th. UBS Group decreased their price objective on shares of Group 1 Automotive from $338.00 to $330.00 and set a “neutral” rating for the company in a research report on Friday, July 10th. Weiss Ratings reissued a “hold (c)” rating on shares of Group 1 Automotive in a research report on Friday, June 12th. Barclays cut their price target on shares of Group 1 Automotive from $470.00 to $435.00 and set an “overweight” rating on the stock in a research note on Wednesday, July 15th. Finally, Benchmark reiterated a “buy” rating on shares of Group 1 Automotive in a research note on Friday, July 10th. Seven equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, Group 1 Automotive currently 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.