Group 1 Automotive(GPI) - 2023 Q2 - Quarterly Report

Financial Performance - Total revenues for Q2 2023 reached $4,558.5 million, a 10% increase from $4,145.4 million in Q2 2022[24] - New vehicle retail sales amounted to $2,243.2 million in Q2 2023, up 21% from $1,851.3 million in Q2 2022[24] - Gross profit for the first half of 2023 was $1,503.4 million, slightly up from $1,493.1 million in the same period last year[24] - Net income for Q2 2023 was $170.5 million, compared to $195.9 million in Q2 2022, reflecting a decrease of 13%[26] - Basic earnings per share for continuing operations were $12.06 in Q2 2023, down from $12.15 in Q2 2022[24] - Comprehensive income for Q2 2023 was $194.4 million, compared to $188.2 million in Q2 2022, reflecting a positive trend[26] - Parts and service sales increased to $562.0 million in Q2 2023, up from $502.6 million in Q2 2022, indicating growth in after-sales services[24] - The company reported a total cost of sales of $3,783.0 million for Q2 2023, an increase from $3,377.0 million in Q2 2022[24] - Other comprehensive income for Q2 2023 was $23.8 million, compared to a loss of $7.7 million in Q2 2022, showing improved financial stability[26] Assets and Liabilities - Total assets increased to $7,424.6 million as of June 30, 2023, compared to $6,717.5 million at the end of 2022[20] - Current liabilities rose to $2,122.3 million in Q2 2023, up from $1,921.4 million in Q2 2022[21] - The long-term debt increased to $2,174.2 million as of June 30, 2023, compared to $1,952.2 million at the end of 2022[22] - The company’s total stockholders' equity grew to $2,518.9 million, up from $2,237.5 million at the end of 2022[21] - Total assets as of June 30, 2023, included $3,389.7 million in retained earnings, an increase from $3,073.6 million as of December 31, 2022, representing a growth of about 10.3%[31] Cash Flow and Investments - Cash provided by operating activities for the six months ended June 30, 2023, was $239.0 million, down from $360.2 million in 2022, indicating a decrease of about 33.6%[34] - Total cash and cash equivalents at the end of the period were $22.8 million, compared to $36.7 million at the end of June 30, 2022, reflecting a decrease of approximately 37.9%[34] - The company reported a net cash used in investing activities of $369.1 million for the six months ended June 30, 2023, compared to $295.6 million in 2022, an increase of approximately 24.8%[34] - The company repurchased $66.0 million of common stock during the six months ended June 30, 2023, compared to $254.1 million in the same period of 2022, a reduction of about 74.0%[34] - Dividends declared per share were $0.45 for the six months ended June 30, 2023, down from $0.90 per share in the same period of 2022, a decrease of 50%[34] Sales and Margins - Total new and used vehicle sales for the six months ended June 30, 2023, amounted to $7,222.8 million, compared to $6,651.0 million in the same period of 2022, reflecting an 8.6% increase[40] - New vehicle retail gross margin decreased to 9.0% from 11.4% year-over-year, while total gross margin fell to 17.0% from 18.5%[95] - Used vehicle retail sales decreased to $2,799.5 million, a decline of 2.3% from $2,865.3 million[97] - Total gross profit margin for the company was 17.3%, down from 18.7%[97] - F&I net revenue decreased to $355.4 million, a decline of 2.1% from $363.2 million[97] Market and Regulatory Environment - The U.S. Federal Reserve increased interest rates throughout 2022 and 2023, impacting disposable income and financing costs for consumers[88] - The company noted that certain lenders have implemented more restrictive lending standards, leading to larger required down payments by consumers[88] - The EPA proposed regulations that could result in at least 60% of new light-duty passenger vehicles sold in the U.S. being battery-electric by 2030, potentially impacting the vehicle mix provided by manufacturers[87] - The company continues to monitor regulatory changes and their potential impact on operations, particularly regarding emissions standards[87] Operational Highlights - The company has two reportable segments: the U.S. and the U.K., focusing on retail automotive franchises and related services[50] - The company operated 150 dealerships in the U.S. and 55 dealerships in the U.K., reflecting a diverse market presence[85] - Approximately 12,200 units were sold through the online digital platform AcceleRide®, representing a 78.2% increase compared to the prior year quarter[105] - The new vehicle days' supply of inventory was approximately 27 days as of June 30, 2023, compared to 15 days in the prior year quarter[86]