Group 1 Automotive, Inc. GPI reported second-quarter 2026 adjusted earnings of $9.61 per share, which declined 16.6% year over year and missed the Zacks Consensus Estimate of $10.79 by 10.9%. Revenues declined 5.6% to $5.39 billion and missed the consensus mark of $5.65 billion by 4.7%.
Results reflected persistent consumer affordability pressure, used-vehicle sourcing challenges and short-term disruption from U.S. store rebranding. Retail new-vehicle units fell 4.4% year over year to 53,335, while used retail units declined 11.2%.
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise
Group 1 Automotive, Inc. price-consensus-eps-surprise-chart | Group 1 Automotive, Inc. Quote
GPI’s Vehicle Sales and Margins Lose Ground
New-vehicle retail sales decreased 4.7% year over year to $2.61 billion. Units sold fell 4.4% year over year to 53,335. The average selling price rose 2.3% to $51,726, but new-vehicle gross profit per retail unit fell 8.5% to $3,254.
Used-vehicle retail sales declined 7% to $1.72 billion. Units sold fell 11.2% year over year to 53,469. Average selling price increased 4.8% to $32,195, while used retail gross profit per unit dropped 4.3% to $1,532.
Used-vehicle wholesale sales declined 7.5% year over year to $151.5 million. Units sold fell 10.1% year over year to 15,315. The unit incurred a gross loss of $47 million against the gross profit of $29 million reported in the same period last year.
Finance and insurance revenues fell 8.8% to $216.8 million, with F&I gross profit per retail unit down 1% to $2,030.
Group 1’s Aftersales Business Provides Support
Parts and service sales declined 3.6% year over year to $692.4 million, while gross profit decreased 3.4% to $389 million. Still, the parts and service gross margin edged up 10 basis points to 56.2%.
On a same-store basis, parts and service revenues rose 2.1% to $673.3 million. U.S. same-store customer-pay revenues grew about 4%, and warranty revenues increased about 1%, helping offset weaker collision activity and lower internal reconditioning tied to reduced used-vehicle volumes.
GPI’s U.S. Operations Absorb the Larger Decline
U.S. revenues fell 5.8% year over year to $3.93 billion, while gross profit dropped 9.6% to $658.5 million. Retail new-vehicle unit sales declined 6.1% to 38,549, and used retail units decreased 13.6% to 34,261.
Adjusted U.S. SG&A expenses fell 6.5% to $437.5 million. Adjusted SG&A as a percentage of gross profit was 66.4%, improving more than 400 basis points sequentially as the company completed its $50 million annualized U.S. expense-reduction initiative. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 14,786, 19,208 and 6,303, respectively.
Group 1’s U.K. Business Shows Relative Resilience
U.K. revenues declined 4.9% year over year to $1.45 billion, while gross profit slipped 2.4% to $202.1 million. New-vehicle retail units increased 0.6% to 14,786, although used retail units declined 6.6% to 19,208.
U.K. parts and service gross margin held at 58.1%. F&I gross profit per retail unit rose 1.7% to $1,118, while total gross margin expanded 40 basis points to 13.9%. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 38,549, 34,261 and 9,012, respectively.
GPI Reshapes Its Portfolio Around Cluster Markets
During the quarter, Group 1 acquired four U.S. dealerships and retained Stone Mountain Toyota and Stone Mountain Honda, which are expected to generate about $205 million in annual revenues. The company also disposed of four Jaguar Land Rover dealerships in the United Kingdom, bringing year-to-date annualized revenues associated with dispositions to $900 million.
GPI separately agreed to acquire 10 Hennessy Automobile Companies dealerships in Atlanta. The transaction is expected to add about $1.7 billion in annual revenues and close by year-end 2026, subject to customary approvals. Management expects the acquisition to be immediately accretive to earnings upon closing.
Group 1’s Liquidity Supports Planned Expansion
As of June 30, 2026, cash and cash equivalents were $164.5 million, up from $32.5 million at year-end 2025. Total debt declined 9.1% to $3.36 billion, while floorplan notes payable, net, increased 13.9% to $2.18 billion.
Total liquidity was $684 million at quarter-end, and the rent-adjusted leverage ratio was 3.3x. During the first half, operating cash flow totaled $155 million, down from $410.3 million in the same period last year.
The Hennessy transaction is valued at about $1.3 billion and is expected to be financed with $1.25 billion of new debt. The company expects rent-adjusted leverage to remain below 4x at closing and plans to return to its target leverage level by mid- to late 2027. As of June 30, 2026, the company had $306.3 million available under its current repurchase authorization.
GPI currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Ford Motor Company F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Favorable mix and net pricing helped lift adjusted EBIT by 17% to $2.5 billion, while adjusted EBIT margin expanded to 5.2% from 4.3%. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. The company’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year.
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This article originally published on Zacks Investment Research (zacks.com).
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