GROUP 1 AUTOMOTIVE INC
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
GPI$261.35-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0001031203-24-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001031203-24-000058
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 147 current paragraphs.
55 unchanged; 43 reworded; 29 added; 13 removed; 1 previous and 20 current paragraphs rearranged.
Tables are not compared: 11 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
On June 19, 2024, we were informed of a cybersecurity incident experienced by CDK Global LLC (“CDK”), which resulted in service outages on CDK’s dealers’ systems (the “CDK Incident”). CDK provides clients in the automotive industry, including Group 1 dealerships in the U.S., with a software as a service platform (“SaaS platform”) used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations. The CDK Incident temporarily disrupted our business applications and processes in our U.S. operations that rely on CDK’s dealers’ systems. Despite the CDK Incident, all Group 1 U.S. dealerships continued to conduct business using alternative processes until CDK’s dealers’ systems were available. On June 26, 2024, CDK restored service to us for the core DMS, at which time, subject to certain modified procedures, we resumed processing transactions through the CDK DMS. We do not expect the CDK Incident to have a material impact on our overall financial condition or on our ongoing results of operations.
Current report
Reported Operating Data — Consolidated
Current report
Same Store Operating Data — Consolidated
Current report
Total revenues in the U.S. during the Current Quarter increased $121.6 million, or 3.2%, as compared to the three months ended June 30, 2023 (“Prior Year Quarter”), driven by the acquisition of stores, partially offset by lower same store revenues.
Current report
Total same store revenues in the U.S. during the Current Quarter decreased $66.2 million, or 1.8%, as compared to the Prior Year Quarter. This decrease was driven by lower revenues from new vehicle retail, used vehicle retail and wholesale, and parts and service, partially offset by higher F&I. The CDK Incident contributed to lower same store sales during the limited period of the CDK outage.
Current report
Parts and service same store revenues underperformed the Prior Year Quarter, driven by decreases in collision and wholesale revenues, partially offset by an increase in warranty revenues.
Current report
Total gross profit in the U.S. during the Current Quarter decreased $1.9 million, or 0.3%, as compared to the Prior Year Quarter, driven by lower same store gross profit, partially offset by the acquisition of stores.
Current report
Total same store gross profit in the U.S. during the Current Quarter decreased $31.3 million, or 4.9%, as compared to the Prior Year Quarter, primarily driven by downward pressures on new vehicle margins.
Current report
Parts and service same store gross profit slightly increased compared to the Prior Year Quarter, due to the change in mix of business activities.
Current report
Total SG&A expenses in the U.S. during the Current Quarter increased $13.9 million, or 3.4%, as compared to the Prior Year Quarter, primarily driven by higher same store SG&A expenses. Total same store SG&A expenses in the U.S. during the Current Quarter, increased $12.6 million, or 3.3%, as compared to the Prior Year Quarter, primarily driven by increased activity related to information technology equipment and services, advertising expenses, insurance expenses, loaner car and related expenses and legal fees. SG&A expenses also included $5.9 million in pre-tax one-time compensation payments to retain our field employees during the CDK Incident.
Current report
Reported Operating Data — U.S.
Current report
U.S. Region — Six Months Ended June 30, 2024 Compared to 2023
Current report
Total gross profit in the U.S. during the Current Year increased $19.6 million, or 1.5%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.
Current report
Total same store gross profit in the U.S. during the Current Year decreased $31.8 million, or 2.6%, as compared to the Prior Year, primarily driven by downward pressures on new vehicle margins, partially offset by increases from used vehicle retail, F&I and parts and service.
Current report
SG&A as a percentage of gross profit increased 62 basis points and increased 471 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Current report
Total revenues in the U.K. during the Current Quarter increased $16.3 million, or 2.1%, as compared to the Prior Year Quarter.
Current report
Total same store revenues in the U.K. during the Current Quarter increased $16.2 million, or 2.1%, as compared to the Prior Year Quarter, primarily driven byoutperformances in new vehicle retail sales and parts and service, partially offset by lower used vehicle sales and F&I. On a constant currency basis, revenues increased 1.4%, for the same reasons.
Current report
Used vehicle wholesale same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by a decrease in wholesale used vehicle units sold.
Current report
Total gross profit in the U.K. during the Current Quarter decreased $7.0 million, or 6.6%, as compared to the Prior Year Quarter.
Current report
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year Quarter, driven by increases in parts and service same store revenues, as discussed above.
Current report
SG&A as a percentage of gross profit increased by 859 and 767 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.
Current report
Reported Operating Data — U.K.
Current report
U.K. Region — Six Months Ended June 30, 2024 Compared to 2023
Current report
Used vehicle wholesale same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by a decrease in wholesale used vehicle units sold.
Current report
Total gross profit in the U.K. during the Current Year decreased $13.9 million, or 6.4%, as compared to the Prior Year Quarter.
Current report
Total same store gross profit in the U.K. during the Current Year decreased $13.9 million, or 6.5%, as compared to the Prior Year. On a constant currency basis, total same store gross profit decreased 8.9%, driven by downward pressures on margins for all lines of business.
Current report
Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year, driven by increases in parts and service same store revenues, as discussed above.
Current report
SG&A as a percentage of gross profit increased by 997 and 951 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Current report
Consolidated Selected Comparisons — Six Months Ended June 30, 2024 Compared to 2023
Removed paragraphs (13)
Previous report
Our manufacturers’ production volume improved during the quarter ended March 31, 2024 (“Current Quarter”), although inventories have not yet normalized across all brands to pre-COVID-19 pandemic levels. Production and related inventory constraints were primarily a result of OEMs maintaining lower than pre-COVID-19 pandemic inventory, sustained global semiconductor and other parts shortages, as well as armed conflicts impacting the global supply chain, including the ongoing conflicts in Ukraine and Israel. Increased deliveries from all manufacturers in the Current Quarter drove a higher volume of new units sold and lack of new vehicle availability in prior quarters also helped maintain elevated new vehicle retail sales prices and margins relative to pre-COVID-19 pandemic levels. The higher inventory levels resulting from improved production during the Current Quarter also generated increased floorplan interest expense. Our new vehicle days’ supply of inventory was approximately 37 days as of the Current Quarter, as compared to 25 days as of the quarter ended March 31, 2023 (“Prior Year Quarter”).
Previous report
Additionally, on March 26, 2024, the Francis Scott Key Bridge in Baltimore, Maryland, collapsed after being struck by a container ship, closing indefinitely the Port of Baltimore, the largest port in the U.S. for shipments of automobiles. The closure of the port could cause shipping delays for some of our manufacturers. The impact of the closure of the port on our vehicle inventory and operations cannot be predicted with certainty.
Previous report
The following discussion of our U.S. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings, if any.
Previous report
Revenues
Previous report
Gross Profit
Previous report
Total same store gross profit in the U.S. during the Current Quarter decreased $0.5 million, or 0.1%, as compared to the Prior Year Quarter, primarily driven by downward pressures on new vehicle margins.
Previous report
SG&A Expenses
Previous report
Revenues
Previous report
Gross Profit
Previous report
Parts and service same store gross profit, on a constant currency basis, slightly underperformed compared to the Prior Year Quarter.
Previous report
SG&A Expenses
Previous report
SG&A as a percentage of gross profit increased by 1,130 and 1,127 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Previous report
Consolidated Selected Comparisons — Three Months Ended March 31, 2024 Compared to 2023
Reworded paragraphs (43)
Previous wording
The global economy continues to experience inflation. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve, along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023 and during the Current Quarter. Continued inflation reducing the disposable income of our customers, volatility in new vehicle availability and higher interest rates increasing the monthly cost of financing vehicles, contributed to used vehicle prices continuing to decline during the Current Quarter. During the Current Quarter, the Federal Reserve signaled that possible cuts to interest rates in 2024 may be at risk due to continued elevated inflation levels, further contributing to economic uncertainty.
Current wording
The global economy continues to experience inflation. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (the “Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023 and during the six months ended June 30, 2024 (“Current Year”). Continued inflation reducing the disposable income of our customers, volatility in new vehicle availability and higher interest rates increasing the monthly cost of financing vehicles, contributed to used vehicle prices continuing to decline during the three months ended June 30, 2024 (“Current Quarter”). During the Current Quarter, the Federal Reserve decided to keep the current interest rates unchanged.
Previous wording
The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to manage and monitor the performance of the business and is also useful to investors.
Current wording
The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to accurately manage and monitor the underlying performance of the business and is also useful to investors.
Previous wording
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than USD using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. Additionally, we caution investors not to place undue reliance on non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. Our management also uses constant currency and adjusted cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures and the related reconciliations because we believe investors use these metrics in evaluating longer-term period-over-period performance. These metrics also allow investors to better understand and evaluate the information used by management to assess operating performance.
Current wording
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. Our primary foreign currency exposure is to the GBP. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than USD using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. Additionally, we caution investors not to place undue reliance on non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. Our management also uses constant currency and adjusted cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures and the related reconciliations because we believe investors use these metrics in evaluating longer-term period-over-period performance. These metrics also allow investors to better understand and evaluate the information used by management to assess operating performance.
Previous wording
F&I same store revenues outperformed the Prior Year Quarter, primarily driven by higher same store new and used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Vehicle service contract penetration and new vehicle finance penetration improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Quarter, leading to the improved new vehicle F&I penetration.
Current wording
F&I same store revenues outperformed the Prior Year Quarter, primarily driven by higher same store used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Quarter, leading to the improved new vehicle F&I penetration.
Previous wording
Used vehicle retail same store gross profit outperformed the Prior Year Quarter, primarily driven by higher same store used vehicle retail units sold. Our used vehicle wholesale same store gross profit underperformed the Prior Year Quarter, driven by a decrease in used vehicle wholesale same store gross profit per unit sold, partially offset by an increase in same store wholesale used vehicle units sold.
Current wording
Used vehicle retail same store gross profit outperformed the Prior Year Quarter, primarily driven by higher same store units sold. Our used vehicle wholesale same store gross profit underperformed the Prior Year Quarter, driven by a decrease in same store gross profit per unit sold, partially offset by an increase in same store units sold.
Previous wording
Total same store gross margin in the U.S. decreased 82 basis points, primarily driven by underperformance in new vehicle retail and used vehicle wholesale margins, for the reasons described above for same store gross profit per unit sold for new vehicle retail and used vehicle wholesale. This underperformance was partially offset by a slight improvement in parts and service margins for the reasons described above, used vehicle retail margins, largely due to lower used vehicle acquisition costs, and improved F&I performance.
Current wording
Total same store gross margin in the U.S. decreased 55 basis points, primarily driven by an underperformance in new vehicle retail for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by a slight improvement in parts and service gross margin due to the change in mix of business activities as described above in parts and service same store revenues.
Previous wording
SG&A as a percentage of gross profit decreased 115 basis points and increased 412 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.
Current wording
SG&A as a percentage of gross profit increased 226 basis points and increased 524 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.
Previous wording
Total revenues in the U.S. during the Current Quarter increased $303.3 million, or 9.1%, as compared to the Prior Year Quarter, driven by the acquisition of stores and higher same store revenues.
Current wording
Total revenues in the U.S. during the Current Year increased $424.9 million, or 5.9%, as compared to the same period in 2023 (“Prior Year”), driven by the acquisition of stores and higher same store revenues.
Previous wording
Total same store revenues in the U.S. during the Current Quarter increased $145.1 million, or 4.5%, as compared to the Prior Year Quarter. This increase was driven by higher revenues from new vehicle retail, used vehicle retail, parts and service and F&I.
Current wording
Total same store revenues in the U.S. during the Current Year increased $78.8 million, or 1.2%, as compared to the Prior Year. This increase was driven by higher revenues from new vehicle retail, used vehicle retail, parts and service and F&I. The CDK Incident contributed to lower same store sales during the limited period of the CDK outage.
Previous wording
New vehicle retail same store revenues outperformed the Prior Year Quarter, driven by more units sold, partially offset by lower new vehicle retail pricing. Manufacturer vehicle deliveries were higher in the Current Quarter and as a result, our inventory levels were higher than the Prior Year Quarter, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year Quarter created downward pressure on new vehicle retail pricing and margins. We ended the Current Quarter with a U.S. new vehicle inventory supply of 43 days, 16 days higher than the Prior Year Quarter, but below pre-COVID-19 pandemic levels.
Current wording
New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset by lower pricing. Manufacturer vehicle deliveries were increased in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year created downward pressure on pricing and margins. We ended the Current Year with a U.S. new vehicle inventory supply of 62 days, 35 days higher than the Prior Year.
Previous wording
Used vehicle retail same store revenues outperformed the Prior Year Quarter, driven by more units sold, partially offset bylower pricing. Improved new vehicle supply, impacts from inflation reducing the disposable income of our customers and higher interest rates increasing the monthly cost of financing vehicles continued to create downward pricing pressure.
Current wording
Used vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset bylower pricing. Improved new vehicle supply, impacts from inflation reducing the disposable income of our customers and higher interest rates increasing the monthly cost of financing vehicles continued to create downward pricing pressure.
Previous wording
Parts and service same store revenues outperformed the Prior Year Quarter, driven by increases in warranty and customer pay revenues, reflecting increased business activity and increased same store technician headcount through our technician recruiting and retention efforts, providing greater capacity to meet increased demand.
Current wording
Parts and service same store revenues outperformed the Prior Year, driven by increases in warranty and customer pay revenues, partially offset by decreases in collision and wholesale revenues. This outperformance reflects increased business activity and increased same store technician headcount through our technician recruiting and retention efforts, providing greater capacity to meet increased demand.
Previous wording
New vehicle retail same store gross profit underperformed the Prior Year Quarter, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in same store new vehicle retail units sold. The decrease in new vehicle retail same store gross profit per unit is due to higher deliveries and increasing inventory levels of new vehicles as described above.
Current wording
Newvehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in units sold. The decrease in new vehicle retail same store gross profit per unit is due to higher deliveries from our OEMs, leading to increasing inventory levels of new vehicles as described above.
Previous wording
Total SG&A expenses in the U.S. during the Current Quarter increased $6.2 million, or 1.6%, as compared to the Prior Year Quarter, primarily driven by higher same store SG&A expenses, partially offset by lower SG&A expenses from store dispositions. Total same store SG&A expenses in the U.S. during the Current Quarter, increased $24.1 million, or 6.5%, as compared to the Prior Year Quarter, primarily driven by increased activity related to employee-related costs, outside services and professional fees, loaner car and related expenses and advertising expenses.
Current wording
Total SG&A expenses in the U.S. during the Current Year increased $20.1 million, or 2.5%, as compared to the Prior Year, primarily driven by higher same store SG&A expenses, partially offset by lower SG&A expenses from store dispositions. Total same store SG&A expenses in the U.S. during the Current Year increased $36.8 million, or 4.8%, as compared to the Prior Year, primarily driven by increased activity related to employee-related costs, outside services and professional fees, information technology equipment and related services, loaner car and related expenses, advertising expenses, insurance expenses and legal fees. SG&A expenses also included $5.9 million in pre-tax one-time compensation payments to retain our field employees during the CDK Incident.
Previous wording
The following discussion of our U.K. operating results is on an as reported and same store basis. The difference between as reported amounts and same store amounts is related to acquisition and disposition activity, as well as new add-point openings, if any. Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.24 at March 31, 2023, to £1 to $1.26 at March 31, 2024, or an increase in the value of the GBP of 2.1 %.
Current wording
Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.266 at June 30, 2023, to £1 to $1.265 at June 30, 2024, or a decrease in the value of the GBP of 0.1 %.
Previous wording
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year Quarter, driven by more units sold, coupled with higher new vehicle retail pricing. The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. Vehicle demand was and continues to be pent-up from the COVID-19 pandemic. We ended the Current Quarter with a U.K. new vehicle inventory supply of 20 days, one day higher than the Prior Year Quarter, but below pre-COVID-19 pandemic levels.
Current wording
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year Quarter, driven by more units sold, coupled with higher pricing. The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. We ended the Current Quarter with a U.K. new vehicle inventory supply of 35 days, six days higher than the Prior Year Quarter.
Previous wording
F&I same store revenues, on a constant currency basis, modestly underperformed the Prior Year Quarter, primarily driven by decreases in income per contract for retail finance fees and service contracts, partially offset by an increase in retail units sold.
Current wording
F&I same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by decreases in income per contract for retail finance fees and service contracts.
Previous wording
Total same store gross profit in the U.K. during the Current Quarter decreased $6.9 million, or 6.3%, as compared to the Prior Year Quarter. On a constant currency basis, total same store gross profit decreased 10.3%, driven by downward pressures on margins for all lines of business.
Current wording
Total same store gross profit in the U.K. during the Current Quarter decreased $7.0 million, or 6.7%, as compared to the Prior Year Quarter. On a constant currency basis, total same store gross profit decreased 7.4%, driven by downward pressures on margins for all lines of business.
Previous wording
F&I same store gross profit, on a constant currency basis, modestly underperformed the Prior Year Quarter, as described above in F&I same store revenues.
Current wording
F&I same store gross profit, on a constant currency basis, underperformed the Prior Year Quarter, as described above in F&I same store revenues.
Previous wording
Total same store gross margin in the U.K. decreased 147 basis points, driven by margin declines for all lines of business caused by inflationary impacts.
Current wording
Total same store gross margin in the U.K. decreased 120 basis points, driven by margin declines for all lines of business, caused by inflationary impacts.
Previous wording
Total SG&A expenses in the U.K. during the Current Quarter increased $7.1 million, or 9.6%, as compared to the Prior Year Quarter. Total same store SG&A expenses in the U.K. during the Current Quarter increased $6.9 million, or 9.4%, as compared to the Prior Year Quarter. On a constant currency basis, total same store SG&A expenses increased 4.8%. These increases were primarily driven by increased employee-related expenses as a result of higher activity and legal fees associated with the pending acquisition of Inchcape plc, coupled with increased demonstration and loaner car expenses compared to the Prior Year Quarter.
Current wording
Total SG&A expenses in the U.K. during the Current Quarter increased $3.4 million, or 4.5%, as compared to the Prior Year Quarter. Total same store SG&A expenses in the U.K. during the Current Quarter increased $2.4 million, or 3.2%, as compared to the Prior Year Quarter. On a constant currency basis, total same store SG&A expenses increased 2.4%. These increases were primarily driven by increased legal fees associated with the pending acquisition of Inchcape plc, coupled with increased advertising expenses and demonstration and loaner car and related expenses, offset by lower employee related costs compared to the Prior Year Quarter.
Previous wording
Total gross profit in the U.S. during the Current Quarter increased $21.5 million, or 3.5%, as compared to the Prior Year Quarter, driven by the acquisition of stores.
Current wording
Total revenues in the U.K. during the Current Year increased $53.4 million, or 3.5%, as compared to the Prior Year.
Previous wording
Total revenues in the U.K. during the Current Quarter increased $37.1 million, or 4.7%, as compared to the Prior Year Quarter, primarily driven by foreign currency exchange rates andoutperformances in new vehicle retail sales and parts and service, partially offset by lower used vehicle sales. On a constant currency basis, revenues increased 0.3%, primarily driven by an outperformance in new vehicle retail sales.
Current wording
Total same store revenues in the U.K. during the Current Year increased $53.3 million, or 3.5%, as compared to the Prior Year, primarily driven byoutperformances in new vehicle retail sales and parts and service, partially offset by lower used vehicle sales and F&I. On a constant currency basis, same store revenues increased 0.8%, primarily driven by an outperformance in new vehicle retail sales and parts and service.
Previous wording
Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing on a constant currency basis, partially offset by more units sold.
Current wording
Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by lower used vehicle retail pricing on a constant currency basis, partially offset by more units sold.
Previous wording
New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in new vehicle retail units sold, as a result of the increase in vehicle inventory production as described above generating downward pressure on new vehicle margins.
Current wording
New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in units sold, as a result of the increase in vehicle inventory production as described above generating downward pressure on new vehicle margins.
Previous wording
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year Quarter, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by a slight increase in used vehicle retail units sold.
Current wording
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by a slight increase in used vehicle retail units sold.
Previous wording
Total gross profit in the U.K. during the Current Quarter decreased $6.9 million, or 6.2%, as compared to the Prior Year Quarter.
Current wording
Total SG&A expenses in the U.K. during the Current Year increased $10.5 million, or 7.0%, as compared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $9.3 million, or 6.2%, as compared to the Prior Year. On a constant currency basis, total same store SG&A expenses increased 3.6%. These increases were primarily driven by increased legal fees associated with the pending acquisition of Inchcape plc, coupled with increased demonstration and loaner car and related expenses, advertising expenses and employee related costs compared to the Prior Year.
Previous wording
Depreciation and amortization expense for the Current Quarter increased compared to the Prior Year Quarter, primarily driven by acquired property and equipment in our U.S. region, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
Current wording
Depreciation and amortization expense for the Current Quarter and Current Year was higher compared to the Prior Year Quarter and Prior Year, primarily driven by acquired property and equipment in our U.S. region, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
Previous wording
Total floorplan interest expense during the Current Quarter, increased $7.9 million, or 62.6%, as compared to the Prior Year Quarter, driven primarily by an increase in inventories added to our floorplan due to improvements in manufacturer production as well as acquisitions, partially offset by realized gains on our interest rate swap portfolio due to increases in corresponding interest rates.
Current wording
Total floorplan interest expense during the Current Quarter, increased $9.0 million, or 58.0%, as compared to the Prior Year Quarter. For the Current Year, floorplan interest expense increased $17.0 million, or 60.0%, as compared to the Prior Year. The increase in floorplan interest expense during the Current Quarter and Current Year wasdriven primarily by an increase in inventories added to our floorplan due to improvements in manufacturer production as well as acquisitions, partially offset by realized gains on our interest rate swap portfolio due to increases in corresponding interest rates.
Previous wording
Other interest expense, net during the Current Quarter, increased $9.6 million, or 48.9%, as compared to the Prior Year Quarter. The increase in other interest expense, net during the Current Quarter was primarily attributable to increased borrowings on the Acquisition Line, additional real estate related debt in our U.S. region, a decrease in the gain recognized on the de-designation of mortgage interest rate swaps of approximately $3.8 million, and higher interest on existing borrowings. Refer to Note 8. Debt within our Notes to Condensed Consolidated Financial Statements for additional discussion of our debt. Refer to Note 6. Financial Instruments and Fair Value Measurements within our Notes to Condensed Consolidated Financial Statements for additional discussion of the de-designation of the mortgage interest rate swap.
Current wording
Other interest expense, net during the Current Quarter, increased $7.4 million, or 28.7%, as compared to the Prior Year Quarter. For the Current Year, other interest expense, net, increased $17.1 million, or 37.5%, as compared to the Prior Year. The increase in other interest expense, net during the Current Quarter and Current Year was primarily attributable to increased borrowings on the Acquisition Line, additional real estate related debt in our U.S. region and higher rates interest on existing borrowings. Additionally, the difference in the Current Year was partly due to a decrease in the gain recognized on the de-designation of mortgage interest rate swaps as compared to the Prior Year of approximately $3.8 million. Refer to Note 8. Debt within our Notes to Condensed Consolidated Financial Statements for additional discussion of our debt. Refer to Note 6. Financial Instruments and Fair Value Measurements within our Notes to Condensed Consolidated Financial Statements for additional discussion of the de-designation of the mortgage interest rate swap.
Previous wording
Provision for income taxes of $45.8 million during the Current Quarter decreased by $1.7 million, or 3.7%, as compared to the Prior Year Quarter. The tax expense decrease in the Current Quarter, as compared to the Prior Year Quarter, was primarily due to lower pre-tax book income. Our Current Quarter effective tax rate of 23.7% was higher than the Prior Year Quarter’s effective tax rate of 23.1%. The tax rate increase was primarily due to taxable gains from asset dispositions in the Current Quarter compared to the Prior Year Quarter.
Current wording
Provision for income taxes of $45.2 million during the Current Quarter decreased by $12.4 million, or 21.6%, as compared to the Prior Year Quarter. For the Current Year, our provision for income taxes of$91.0 million decreased by $14.2 million or 13.5%, as compared to the Prior Year. The tax expense decrease in the Current Quarter and Current Year, as compared to the Prior Year Quarter and Prior Year, was primarily due to lower pre-tax book income. Our Current Quarter effective tax rate of 24.7% was lower than the Prior Year Quarter’s effective tax rate of 25.3%. The tax rate decrease was primarily due to the mix of earnings in the Current Quarter compared to the Prior Year Quarter.
Previous wording
Sources and Uses of Liquidity from Operating Activities — Three Months Ended March 31, 2024 Compared to 2023
Current wording
Sources and Uses of Liquidity from Operating Activities — Six Months Ended June 30, 2024 Compared to 2023
Previous wording
For the Current Quarter, net cash provided by operating activities increased by $110.5 million, as compared to the Prior Year Quarter. On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $19.9 million. The decrease on an adjusted basis was primarily driven by a $126.8 million decrease in floorplan notes payable — manufacturer affiliates, partially offset by a $97.8 million decrease in inventory levels.
Current wording
For the Current Year, net cash provided by operating activities decreased by $109.2 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $84.9 million. The decrease on an adjusted basis was primarily driven by an $81.7 million decrease in accounts payable and accrued expenses, a $45.2 million increase in inventory levels and a $42.9 million decrease in net income, partially offset by a $111.8 million increase in floorplan notes payable — manufacturer affiliates.
Previous wording
Sources and Uses of Liquidity from Investing Activities — Three Months Ended March 31, 2024 Compared to 2023
Current wording
Sources and Uses of Liquidity from Investing Activities — Six Months Ended June 30, 2024 Compared to 2023
Previous wording
For the Current Quarter, net cash used in investing activities increased by $513.7 million, as compared to the Prior Year Quarter. On an adjusted basis for the same period, adjusted net cash used in investing activities increased by $492.9 million, primarily due to a $571.9 million increase in acquisition activity and a $27.4 million increase in purchases of property and equipment, including real estate, partially offset by a $95.8 million increase in proceeds from disposition of franchises and property and equipment.
Current wording
For the Current Year, net cash used in investing activities increased by $299.8 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in investing activities increased by $319.1 million, primarily due to a $341.4 million increase in acquisition activity, an $86.4 million increase in escrow payments for acquisitions and a $16.2 million increase in purchases of property and equipment, including real estate, partially offset by a $115.7 million increase in proceeds from disposition of franchises and property and equipment.
Previous wording
For the Current Quarter,$63.2 million was used to purchase property and equipment.
Current wording
For the Current Year,$102.9 million was used to purchase property and equipment.
Previous wording
Sources and Uses of Liquidity from Financing Activities — Three Months Ended March 31, 2024 Compared to 2023
Current wording
Sources and Uses of Liquidity from Financing Activities — Six Months Ended June 30, 2024 Compared to 2023
Previous wording
For the Current Quarter, net cash provided by financing activities increased by $416.4 million, as compared to the Prior Year Quarter. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $525.9 million. The increase in net cash provided by financing activities on an adjusted basis was primarily driven by a $275.2 million increase in net borrowings on the Acquisition Line, a $234.1 million increase in net borrowings of other debt, including real estate-related debt and increases in net borrowings on our U.S. Floorplan line of $34.1 million (representing the net cash activity in our floorplan offset account). These increases were partially offset by a $19.0 million increase in cash paid for share repurchases.
Current wording
For the Current Year, net cash provided by financing activities increased by $443.4 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $438.3 million. The increase in net cash provided by financing activities on an adjusted basis was primarily driven by a $355.2 million increase in net borrowings of other debt, including real estate-related debt and increases in net borrowings on our U.S. Floorplan line of $295.1 million (representing the net cash activity in our floorplan offset account). These increases were partially offset by a $177.6 million increase in net repayments on the Acquisition Line and a $33.8 million increase in cash paid for share repurchases.
Previous wording
(1) The available balance at March 31, 2024, includes $180.4 million of immediately available funds. The remaining available balance can be used for vehicle inventory financing.
Current wording
(1) The available balance at June 30, 2024, includes $79.4 million of immediately available funds. The remaining available balance can be used for vehicle inventory financing.
Previous wording
(2) The outstanding balance of $559.2 million is related to outstanding letters of credit of $12.2 million and $547.0 million in USD borrowings. The available borrowings may be limited from time to time, based on certain debt covenants.
Current wording
(2) The outstanding balance of $306.5 million is related to outstanding letters of credit of $12.2 million and $294.3 million in borrowings. The borrowings outstanding under the Acquisition Line included $250.0 million USD borrowings and £35.0 million of GBP borrowings translated at the spot rate on the day borrowed, solely for purposes of calculating the outstanding and available borrowings under the Acquisition Line in accordance with the Revolving Credit Facility. The available borrowings may be limited from time to time, based on certain debt covenant calculations, and as a result, the outstanding balance plus available borrowings may not equal the total commitment.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (20)
Current report — wording carried from elsewhere
(1) Floorplan assistance is included within Gross Profit — New vehicle retail sales above and Cost of Sales — New vehicle retail sales in our Condensed Consolidated Statements of Operations.
Current report — wording carried from elsewhere
New vehicle retail same store revenues underperformed the Prior Year Quarter, driven by lower pricing, coupled with less units sold. Manufacturer vehicle deliveries increased in the Current Quarter and as a result, our inventory levels were higher than the Prior Year Quarter. Higher new vehicle supply compared to the Prior Year Quarter created downward pressure on pricing and margins. We ended the Current Quarter with a U.S. new vehicle inventory supply of 62 days, 35 days higher than the Prior Year Quarter.
Current report — wording carried from elsewhere
Used vehicle retail same store revenues underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing, partially offset by more units sold.. Improved new vehicle supply, impacts from inflation reducing the disposable income of our customers and higher interest rates increasing the monthly cost of financing vehicles continued to create downward pricing pressure.
Current report — wording carried from elsewhere
New vehicle retail same store gross profit underperformed the Prior Year Quarter, driven by a decrease in same store gross profit per unit sold, coupled with a decrease in same store units sold. The decrease in same store gross profit per unit is due to higher deliveries from our OEMs and increasing inventory levels of new vehicles as described above.
Current report — wording carried from elsewhere
Same Store Operating Data — U.S.
Current report — wording carried from elsewhere
F&I same store revenues outperformed the Prior Year, primarily driven by higher same store new and used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Year, leading to the improved new vehicle F&I penetration.
Current report — wording carried from elsewhere
Used vehicle retail same store gross profit outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold.
Current report — wording carried from elsewhere
Parts and service same store gross profit outperformed the Prior Year, as described above for same store revenues.
Current report — wording carried from elsewhere
F&I same store gross profit, outperformed the Prior Year, as described above for F&I same store revenues.
Current report — wording carried from elsewhere
Total same store gross margin in the U.S. decreased 67 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by an improvement in parts and service gross margin as described above for parts and service same store revenues.
Current report — wording carried from elsewhere
Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing on a constant currency basis.
Current report — wording carried from elsewhere
New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to a decrease in new vehicle retail gross profit per unit sold, partially offset by an increase units sold, as a result of the increase in new vehicle production as described above generating downward pressure on new vehicle margins.
Current report — wording carried from elsewhere
Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year Quarter, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by a slight increase in units sold.
Current report — wording carried from elsewhere
Same Store Operating Data — U.K.
Current report — wording carried from elsewhere
Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.266 at June 30, 2023, to £1 to $1.265 at June 30, 2024, or a decrease in the value of the GBP of 0.1 %.
Current report — wording carried from elsewhere
New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold, coupled with higher pricing. The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. We ended the Current Year with a U.K. new vehicle inventory supply of 35 days, six days higher than the Prior Year.
Current report — wording carried from elsewhere
Parts and service same store revenues, on a constant currency basis, outperformed the Prior Year, driven by increases in customer pay, warranty and wholesale revenues reflecting increased business activity. We have invested in improvements to our U.K. customer contact center, streamlining operations to make scheduling appointments easier for customers, resulting in an increase in parts and service activity driving an increase in revenues as compared to the Prior Year.
Current report — wording carried from elsewhere
F&I, net same store revenues, on a constant currency basis, underperformed the Prior Year, primarily driven by decreases in income per contract for retail finance fees and service contracts.
Current report — wording carried from elsewhere
F&I same store gross profit, on a constant currency basis, modestly underperformed the Prior Year, as described above in F&I same store revenues.
Current report — wording carried from elsewhere
Total same store gross margin in the U.K. decreased 134 basis points, driven by margin declines for all lines of business caused by inflationary impacts.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Parts and service same store gross profit outperformed the Prior Year Quarter, as described above for same store revenues.