Group 1 Automotive, Inc. (GPI) has reported an 1.03 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $33.94 million, or $1.58 a share in the quarter, compared with $34.29 million, or $1.47 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $32.80 million, or $1.53 a share compared with $37.06 million or $1.59 a share, a year ago. Revenue during the quarter dropped 3.43 percent to $2,518.83 million from $2,608.36 million in the previous year period. Gross margin for the quarter expanded 31 basis points over the previous year period to 15.23 percent. Total expenses were 96.82 percent of quarterly revenues, down from 96.85 percent for the same period last year. This has led to an improvement of 4 basis points in operating margin to 3.18 percent.
Operating income for the quarter was $80.14 million, compared with $82.04 million in the previous year period.
"Although we had another strong performance in our U.S. new vehicle margins, a record quarter in the U.K., and a profitable quarter in Brazil, these factors were not enough to offset extreme weakness in vehicle sales in our energy price impacted markets. Combined new and used sales dropped 11 percent in Texas and Oklahoma, with the new vehicle industry declining 16 percent for the quarter in our largest single market of Houston. With a decrease of 13 percent in new vehicle sales at our Houston stores, we outperformed the local market, but we still need to make further adjustments to our businesses in the energy price impacted markets," said Earl J. Hesterberg, Group 1's president and chief executive officer. "As for our overseas markets, our U.K. operations had another record quarter, with revenue growth across all business segments and gross profit up double digits on a constant currency basis. And finally, in the face of continued pressure on Brazil’s new vehicle industry during the quarter, we are also delighted to have achieved profitability in our Brazil Region by growing gross profit 13 percent on a Same Store constant currency basis reflecting tremendous performance in used vehicles, parts and service, and F&I, and by significantly leveraging our costs."
Working capital declines
Group 1 Automotive, Inc. has witnessed a decline in the working capital over the last year. It stood at $131.80 million as at Mar. 31, 2017, down 12.56 percent or $18.92 million from $150.73 million on Mar. 31, 2016. Current ratio was at 1.07 as on Mar. 31, 2017, down from 1.07 on Mar. 31, 2016. Cash conversion cycle (CCC) has decreased to 37 days for the quarter from 74 days for the last year period. Days sales outstanding were almost stable at 14 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 36 days for the quarter compared with 73 days for the previous year period. At the same time, days payable outstanding was almost stable at 13 days for the quarter, when compared with the previous year period.
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