Even as its core new-vehicle markets softened, Group 1 Automotive Inc. boosted profits in the fourth quarter on strength in used vehicles, service and finance and insurance.
Fourth-quarter revenue for the Houston-based dealership group climbed 7 percent to an all-time record of $3.11 billion. Net income jumped 57 percent to $48.1 million. When adjusted for one-time items, Group 1’s profits increased 29 percent to $56.3 million. The one-time items — primarily related to non-cash impairments of certain intangible assets, Group 1 said — totaled $8.2 million after taxes in the fourth quarter of 2019 and $13.1 million after taxes the prior year’s quarter.
For the full year, Group 1’s revenue advanced 3.8 percent to a record $12.04 billion. Net income rose 10 percent to $174 million. Full-year adjusted profits were up 13 percent to $203.6 million.
The record year was “based on an extremely strong performance by our U.S. operating team,” Group 1 CEO Earl Hesterberg said Wednesday in a statement. “Despite a softer U.S. and U.K. market for new vehicles, we drove our company forward with strong focus on used vehicles, service, finance & insurance, and cost control.”
Group 1’s stock fell 1.7 percent to close at $99.82 on Wednesday.
Sales: Total fourth-quarter new-vehicle sales advanced 3 percent to 43,537 vehicles across the group’s dealerships in the U.S., U.K. and Brazil. Retail used-vehicle sales rose 7.1 percent to 38,671 vehicles.
In the U.S. alone, new-vehicle sales inched up 1.9 percent to 32,347 vehicles, while retail sales of used vehicles increased 6.6 percent to 29,717 vehicles.
For the full year, new-vehicle sales dipped 0.8 percent to 169,136 vehicles companywide. Retail used-vehicle sales climbed 7.1 percent to 158,549 vehicles.
In just the U.S., full-year new-vehicle sales dipped 0.6 percent to 122,096 vehicles, while retail used-vehicle sales gained 8.2 percent to 121,016 vehicles.
Same-store sales: U.S. new-vehicle sales increased 2.5 percent on a same-store basis to 31,934 vehicles in the fourth quarter. That outpaced the industry. Total U.S. new light-vehicle sales dipped 1.8 percent for the same period, according to the Automotive News Data Center. Same-store retail sales of used vehicles rose 7.9 percent in the quarter to 29,257 vehicles
For the full year, same-store new vehicle sales in the U.S. were off just 0.6 percent to 119,303 vehicles.
Records: Fourth-quarter record revenue of $3.11 billion; full-year record revenue of $12.04 billion; full-year record gross profit of $1.82 billion.
Group 1 ranks No. 4 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 170,517 new vehicles in 2018.