HOUSTON — Thanks to strong performance in March, Group 1 earned $31.3 million in the first quarter, amounting to $1.19 per diluted share — a 2.6% increase vs. the group’s adjusted results for the same period last year.
“It is appropriate to compare our results to our adjusted results in 2013, as our Q1 results last year included $7.1 million in onetime costs, primarily associated with the acquisition of our Brazilian business,” said Earl J. Hesterberg, CEO and president of Group 1, according to a transcript from seekingalpha.com. “So on a GAAP basis, our $31.3 million net income represents a 41.5% increase, but on an adjusted basis, equates to a 7.1% increase.”
Like other public groups, Group 1’s business was hampered in the first quarter by extreme weather conditions, losing about 9% of its total available selling days through Feb. 16. The stores most affected were located in New Hampshire, Massachusetts, New York, New Jersey and Maryland, but the company also saw multiple closures in South Carolina, Georgia and North Texas — something Hesterberg called “very unusual.”
“Fortunately, the quarter ended strongly, with March delivering an extremely strong sales month across the U.S. and in the U.K.,” he said.
On a consolidated basis for the quarter, Group 1 retailed 37,749 new vehicles, and 26,877 used vehicles, which drove a $297 million increase in revenue to $2.3 billion. New-vehicle revenue rose 14.3%, with the average retail sales price increasing $66 per unit. Used-vehicle retail revenues grew 16.7%, with the average retail sales price rising $174 per unit.
Group 1 generated a 15.4% increase in F&I gross profit during the quarter, as well as same-store revenue growth of 6.3% in parts and service.
“Both of these were important contributors to our 15.1% total consolidated revenue growth, as well as a 5.9% improvement in same-store revenue,” Hesterberg said. “Our same-store finance and insurance income per retail unit increased $136 to $1,391,” a 10.8% increase. Hesterberg attributed the increase to gains in both penetration rates and income per contract for most of the company’s major product offerings.