Editor’s note: Group 1 repurchased more than 3 million shares in 2022. A previous version of this story misstated that figure.
Sales gains in all areas of its business propelled Group 1 Automotive Inc. to higher profits during the fourth quarter, as the public dealership group continued acquiring smaller rivals.
Group 1, of Houston, on Wednesday reported net income of $157 million in the fourth quarter, up 80 percent. Revenue rose 17 percent to $4.07 billion.
Growth through acquisition was a key strategy for the retailer in 2022.
“We acquired nearly $1 billion of revenue in 2022 and have now acquired over $3 billion in revenues over the past 15 months,” CEO Daryl Kenningham said during a Wednesday call with analysts. Kenningham was promoted to the top job as of Jan. 1, taking over for now-retired Earl Hesterberg.
We expect a gradual decline in new-vehicle margins over the course of 2023 as inventory continues to recover. We do, however, expect normalized new-vehicle margins to eventually settle above our pre-pandemic levels.”
In December, Group 1 acquired a Mercedes-Benz and Sprinter dealership in California, which is expected to generate $200 million in annual revenues. Group 1 reported that for full-year 2022 it acquired dealerships representing expected annual revenue of $940 million. The retailer divested its dealerships in Brazil last July.
Group 1 continued a share buyback program during the quarter and said it repurchased more than 3 million shares in total in 2022, representing nearly 18 percent of its outstanding common shares at the beginning of last year.
For the full year, Group 1 reported much higher revenue and flat net income
Shares of Group 1 rose 2.1 percent to close Wednesday at $197.08.
• Q4 net income: $157 million, up 80 percent compared with the year-earlier period
• Q4 revenue: $4.07 billion, up 17 percent
• Q4 net income from continuing operations: $156.7 million, down 4 percent
• Q4 new-vehicle sales: 39,992 vehicles, up 12 percent; 34,971 vehicles on a same-store basis, up 2.5 percent
• 2022 net income: $751.5 million, up 36 percent compared with 2021
• 2022 revenue: $16.22 billion, up 20 percent
• 2022 net income from continuing operations: $754.2 million, up 21 percent
• 2022 new-vehicle sales: 154,714 vehicles, up 5.9 percent; 128,684 vehicles on a same-store basis, down 10 percent
Group 1 ranked No. 4 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S., with retail sales of 146,072 new vehicles in 2021.