Group 1 Auto posts record revenue amid uptick in new car sales

Group 1 Automotive, the third largest group of dealers in the United States, recorded record sales last quarter with new vehicle sales growth.

On Thursday, the Houston company posted net profit of $ 38 million, with revenue of $ 3.1 billion in the third quarter, which ended September 30. Imports increased 3.2{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} annually, while sales increased 7.9{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}.

New vehicle sales in the same store increased 2.9{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} year-over-year, surpassing the almost flat industry. Used car sales in the same store increased 14.1{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}.

Earl Hesterberg, chief executive officer, said, “One of the best quarters in the company's history,” with revenue growth of 9.1 percent year-on-year, especially in used cars and parts and services.

Related: Car sales surge in Houston after Imelda

Group 1's financial performance was weakened by the tropical storm Imelda, which ranged from $ 35 million to $ 40 million in 1,000 to 1,500 new and used cars at six dealerships in the Beaumont region. Imelda suffered $ 9 million in damages.

Group 1 opened a four-story Jaguar-Land Rover store in London and an independent collision center in Atlanta in the third quarter. The company closed the Volkswagen franchise in Texas during the quarter.

By this year, Group 1 has acquired 1.3 billion dealership franchises, which are expected to generate $ 330 million in revenue annually, with 12 franchises generating approximately $ 240 million in annual revenue.

In a Thursday morning conference call with a Wall Street analyst, Hesterberg said Group 1 is still most interested in growing the company through acquisitions.

Hesterberg said, “There is no shortage of acquisitions in the US or UK market, but we need to value it in terms of future gains, not past gains. "We are very careful about how to invest money in external growth."


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