Group 1 Automotive Q2 revenue misses on consumer affordability

Overview

• US auto retailer's Q2 revenue declined and missed analyst expectations

• Adjusted EPS for Q2 fell and missed analyst expectations

• Company agreed to acquire 10 Atlanta dealerships, expanding cluster strategy

Outlook

• Group 1 expects Hennessy acquisition to close by year-end 2026, generating $1.7 bln annual revenue

• Company expects two recently acquired Atlanta dealerships to generate $205 mln annual revenue

• Company expects remaining new Geely locations in U.K. to open later in 2026

Result Drivers

• CONSUMER AFFORDABILITY - Co said Q2 results softened due to consumer affordability issues affecting demand

• COST REDUCTION INITIATIVE - Co completed $50 mln annualized expense reduction initiative in U.S. during Q2

Company press release: ID:nPn7YYtDfa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts service retailers peer group is "buy"

• Wall Street's median 12-month price target for Group 1 Automotive Inc is $435.00, about 21.5% above its July 29 closing price of $357.97

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• July 28 - Asbury Automotive Q2 adjusted EPS beats estimates on used vehicle profitability

• July 29 - Lithia Driveway Q2 revenue beats estimates

• July 29 - Penske Q2 revenue beats expectations, raises dividend

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)