Group 1 Automotive (GPI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $5.41 billion, down 1.8% year-over-year, with adjusted net income of $104 million and adjusted diluted EPS of $8.66; net income from continuing operations rose 1.7% to $129.9 million.

• U.K. operations achieved record gross profit of $230.6 million, up 6.3% year-over-year, driven by strong parts, service, and F&I growth; U.K. revenues rose 3.8% aided by acquisitions.

• U.S. aftersales gross margin reached a new quarterly high, with weather disruptions impacting aftersales by $7 million and store closures up to a week in some markets.

• Significant cost-cutting actions in the U.S. and U.K., including a reduction of nearly 700 full-time employees, are expected to yield at least $50 million in annualized savings.

• Portfolio optimization continued with the disposal of four dealerships (two in California, two in the U.K.), removing $570 million in annual revenue, and acquisitions of three U.K. dealerships.

Financial highlights

• Gross profit was $877.9 million, down 1.6% year-over-year; consolidated gross margin held steady at 16.2%.

• SG&A expenses decreased 2.7% to $600.6 million; as a percentage of gross profit, SG&A improved by 80 basis points to 68.4%.

• Diluted EPS from continuing operations was $10.85; adjusted diluted EPS was $8.66, with a $2.87 per share benefit from asset dispositions.

• Operating cash flow was $92.4 million, down from $158.7 million, but adjusted operating cash flow increased to $147.2 million.

• Capital expenditures were $84.0 million, up from $52.2 million year-over-year, reflecting investment in real estate and modernization.

Outlook and guidance

• U.S. cost reductions are expected to yield at least $50 million in annual savings, with $12.5 million quarterly benefit starting Q2.

• Continued focus on integrating acquisitions, expanding the U.K. network, and leveraging technology and AI for operational efficiency and customer retention.

• Management expects sufficient liquidity and compliance with debt covenants for the foreseeable future.

• U.K. SG&A as a percent of gross targeted to approach 80% with ongoing efficiency efforts.

• U.S. aftersales growth expected to remain in mid-single digits, despite some warranty headwinds and collision business decline.