Why Is Group 1 Automotive (GPI) Up 17.4% Since Last Earnings Report?

Core Viewpoint - Group 1 Automotive's recent earnings report showed mixed results, with adjusted EPS missing expectations while net sales exceeded estimates, indicating potential challenges ahead for the company [2][3]. Financial Performance - Group 1 reported Q3 adjusted EPS of $9.90, missing the Zacks Consensus Estimate of $9.93 and down 18% year over year [2]. - Net sales reached $5.22 billion, surpassing the Zacks Consensus Estimate of $5.14 billion and increasing from $4.71 billion in the prior year [2]. Segment Performance - New vehicle retail sales increased 13.4% year over year to $2.57 billion, with total retail new vehicles sold at 53,775 units, up 18.6% year over year [3]. - Used-vehicle retail sales rose 6.2% to $1.66 billion, with total retail used vehicles sold at 55,907 units, up 10.1% year over year [4]. - U.S. business segment revenues rose 1.8% to $3.97 billion but fell short of expectations, with gross profit declining 0.7% to $678.1 million [6]. - The U.K. business segment saw revenues jump 55.2% to $1.25 billion, significantly exceeding estimates, with gross profit up 68.6% to $174.5 million [7]. Financial Position - Selling, general and administrative expenses increased 19.1% year over year to $591.6 million [8]. - Cash and cash equivalents were $58.7 million as of September 30, 2024, up from $57.2 million at the end of 2023, while total debt rose to $2.89 billion [8]. Stock Performance and Outlook - Group 1 repurchased 85,245 shares at an average price of $349.55, totaling $29.8 million, with $174.8 million remaining on its buyback program [9]. - Estimates for the stock have trended downward, with a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [12].