Group 1 Automotive (GPI) investor relations material

Executive summary

• Q1 2026 revenue was $5.41 billion, down 1.8% year-over-year, with net income of $130.2 million, and adjusted diluted EPS of $8.66; U.K. operations delivered record gross profit of $230.6 million, up 6.3% year-over-year, driven by strong parts, service, and F&I growth.

• U.S. aftersales gross margin reached a new quarterly high, with weather disruptions impacting aftersales by $7 million and store closures in some markets.

• Significant cost-cutting actions in the U.S. and U.K., including a reduction of nearly 700 full-time employees, are expected to save at least $50 million annually.

• Portfolio optimization continued with the disposal of four dealerships (two in California, two in the U.K.), removing $570 million in annual revenue, and acquisitions of three U.K. dealerships expected to add $135 million in annual revenue.

• Repurchased 205,190 shares (~1.7% of outstanding) for $72.4 million; $306.3 million remains authorized for repurchases.

Financial highlights

• Gross profit was $877.9 million, down 1.6% year-over-year; consolidated gross margin held steady at 16.2%.

• SG&A expenses decreased 2.7% to $600.6 million; as a percentage of gross profit, SG&A improved by 80 basis points to 68.4%.

• Adjusted net income from continuing operations was $104 million; adjusted operating cash flow YTD was $147 million.

• Capital expenditures were $84 million, up from $52.2 million year-over-year, reflecting investment in real estate and modernization.

• Diluted EPS rose to $10.85 from $9.67 year-over-year, with a $2.87 per share benefit from asset dispositions.

Outlook and guidance

• U.S. cost reductions are expected to yield at least $50 million in annual savings, with $12.5 million quarterly benefit starting Q2.

• Management expects continued restructuring in the U.K. throughout 2026, with no material additional charges expected.

• Focus remains on integrating acquisitions, expanding the U.K. network, leveraging technology and AI, and disciplined capital allocation.

• Management expects sufficient liquidity and compliance with debt covenants for the foreseeable future.