Group 1 Automotive Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 8 September 2026: press release. Guidance figures: 6 new. The quarter’s numbers.

Key takeaways

Consumer affordability issues cited as key pressure: CEO attributed results softening to consumer affordability issues, noting company continued executing strategic initiatives for long-term strengthening despite near-term headwinds.
Atlanta cluster strengthened to 15 dealerships: With Hennessy and two Stone Mountain acquisitions, company will have 15 dealerships in Atlanta high-volume growth market, described as ideal execution of cluster strategy bolstering long-term position.
SG&A ratio increased despite cost reduction completion: U.S. SG&A as percentage of gross profit increased 280 basis points to 67.5%. Adjusted U.S. SG&A improved sequentially 400+ basis points to 66.4%. Company successfully completed $50 million annualized expense reduction initiative in U.S., exceeding targets.
Virtual F&I platform expanded to 40% of stores: Company expanded virtual F&I digital platform to more than 40% of stores, supporting long-term strategic value creation and operational efficiency.

“While our second quarter results softened due to consumer affordability issues, we continued to execute against the strategic initiatives that will strengthen Group 1 over the long term.”
Daryl Kenningham, Group 1's President and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Hennessy Acquisition annual revenues	upon close expected year-end 2026	approximately $1.7 billion	New
Stone Mountain dealerships annual revenues	full year	approximately $205 million	New
Year-to-date acquisition annual revenues	2026 year-to-date	approximately $340 million	New
Year-to-date disposition annual revenues	2026 year-to-date	$900 million	New
Geely U.K. franchise openings	2026	3 locations; 1 opened June 2026, 2 remaining later in 2026	New
Hennessy Acquisition outside closing date Source	2026-2027	January 6, 2027	New

What changed from last quarter

New: Hennessy Automobile Companies acquisition of 10 dealerships in Atlanta market signed, expected to generate approximately $1.7 billion annual revenues.
New: Two additional dealerships acquired in Atlanta market (Stone Mountain Toyota and Honda) expected to generate approximately $205 million annual revenues.
$50 million annualized expense reduction initiative successfully completed in Q2 2026 U.S. operations, exceeding targets.

Results and Affordability Headwinds

Consumer affordability issues cited as key pressure: CEO attributed results softening to consumer affordability issues, noting company continued executing strategic initiatives for long-term strengthening despite near-term headwinds.

Strategic Acquisitions and Cluster Strategy

Atlanta cluster strengthened to 15 dealerships: With Hennessy and two Stone Mountain acquisitions, company will have 15 dealerships in Atlanta high-volume growth market, described as ideal execution of cluster strategy bolstering long-term position.
Year-to-date dealership acquisitions totaling $340 million: Company acquired four dealerships in Q2 2026 with two retained (Stone Mountain Toyota and Honda) expected to generate approximately $205 million annual revenues. Year-to-date acquisitions expected approximately $340 million annual revenues.
U.K. portfolio actions including Jaguar/Land Rover exits: Company disposed of four Jaguar/Land Rover dealerships in U.K. generating approximately $330 million annual revenues, bringing year-to-date dispositions to $900 million.

“During the quarter in the U.S., we successfully completed our previously announced $50 million annualized expense reduction initiative, exceeding our targets. We also continued to invest in our future through strategic dealership acquisitions and dispositions, advanced our corporate rebranding to more than 60% completion, and expanded our virtual F&I platform to more than 40% of our stores.”
Daryl Kenningham, Group 1's President and Chief Executive Officer

Selling, General and Administrative Costs

SG&A ratio increased despite cost reduction completion: U.S. SG&A as percentage of gross profit increased 280 basis points to 67.5%. Adjusted U.S. SG&A improved sequentially 400+ basis points to 66.4%. Company successfully completed $50 million annualized expense reduction initiative in U.S., exceeding targets.

Gross Profit and Margin Compression

New and used vehicle margins pressured: New vehicle retail gross margin declined 60 basis points to 6.7%. Used vehicle margin compressed 50 basis points to 4.3% on reported basis, with same-store used margin also declining 50 basis points to 4.4%.

“The purchase of these high-volume dealerships in a tremendous growth market is the ideal execution of our cluster strategy and bolsters Group 1's position for the long term.”
Daryl Kenningham, Group 1's President and Chief Executive Officer

Capital Structure and Financing Strategy

Share repurchase activity moderated in 2026: Year-to-date 2026 repurchased 205,190 shares at average price of $353.08 for total cost of $72.4 million. No repurchases in Q2 2026. Board authorization remaining: $306.3 million.

Digital and Operational Initiatives

Virtual F&I platform expanded to 40% of stores: Company expanded virtual F&I digital platform to more than 40% of stores, supporting long-term strategic value creation and operational efficiency.
Corporate rebranding progressed to 60% completion: Advanced corporate rebranding initiative to more than 60% completion, part of strategic initiatives to strengthen Group 1 long-term.
Geely partnership expanding in U.K. market: Entered agreement with Chinese automaker Geely to expand U.K. network through three new locations. First franchise opened June 2026, remaining two expected to open later in 2026.

Coming up, per management

Hennessy Acquisition closing expected: Hennessy Acquisition of 10 dealerships expected to close by year-end 2026 subject to regulatory and OEM approvals and customary conditions, with January 6, 2027 Outside Date specified.
Geely franchise expansion completion: Remaining two Geely franchise locations in U.K. expected to open later in 2026 following first location opening in June.

Risks management discussed

Demand: Consumer affordability issues adversely impacting vehicle purchase demand and pressuring near-term sales volumes.

Earlier plans management reported on

Met: Management stated initiative was successfully completed during Q2, exceeding targets.
On track: Corporate rebranding advanced to more than 60% completion during Q2 2026.
On track: Virtual F&I platform expanded to more than 40% of stores during Q2 2026.
On track: Hennessy Acquisition expected to close by year-end 2026 subject to regulatory and OEM approvals, with January 6, 2027 Outside Date.
On track: First Geely franchise opened in June 2026, with remaining two locations expected to open later in 2026.

Summarised with AI from the documents the company filed with the SEC. Every point carries a quote that is checked word for word against the filing; a point whose quote is not found is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Exhibit 99.1

FOR IMMEDIATE RELEASE

Group 1 Automotive Announces $1,250.0 Million Offering of Senior Notes

HOUSTON, TX, September 8, 2026 - Group 1 Automotive, Inc. (NYSE: GPI) (“Group 1” or the

“Company”), a Fortune 250 automotive retailer with 249 dealerships located in the U.S. and U.K, today announced that, subject to market conditions, it intends to offer for sale $625.0 million in aggregate principal amount of senior unsecured notes due 2032 (the “2032 Notes”) and $625.0 million in aggregate principal amount of senior unsecured notes due 2035 (the “2035 Notes” and, together with the 2032 Notes, the “Notes”).

The Company intends to use the net proceeds of the offering, together with cash on hand, to fund the purchase price for its previously announced acquisition of certain dealership assets and related real estate from Hennessy Automobile Companies, Inc. and certain of its affiliates (the “Hennessy Acquisition”) and to pay related fees and expenses. Because the closing of the Hennessy Acquisition is expected to occur after the closing of the offering, the Company intends to use the net proceeds, pending the closing of the Hennessy Acquisition, to repay a portion of the outstanding borrowings under the acquisition line under its revolving credit facility, which the Company expects to reborrow at the closing of the Hennessy Acquisition to fund a portion of the purchase price.

the Hennessy Acquisition is not consummated on or prior to the later of (x) January 6, 2027 (the “Outside Date”) and (y) such date to which the Outside Date under the purchase agreement relating to the Hennessy Acquisition may be extended in accordance with the terms thereof (such later date, the “Special Mandatory Redemption Outside Date”), or upon the occurrence of certain other events, including the termination of the purchase agreement related to the Hennessy Acquisition prior to the Special Mandatory Redemption Outside Date, the Company will be required to redeem all of the 2032 Notes then outstanding at a redemption price equal to 100% of the initial issue price thereof, plus accrued and unpaid interest, if any, from the issue date, to, but excluding, the redemption date (the “Special Mandatory Redemption”). In that case, the Company intends to use the net proceeds of the offering that are not used to fund the Special Mandatory Redemption to repay borrowings under the Company’s revolving credit facility and for general corporate purposes.

The Notes to be

offered have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and thus, the Notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes are being offered to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these Notes or any security, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

ABOUT GROUP 1 AUTOMOTIVE, INC.

Group 1 owns and operates 249 automotive dealerships, 310 franchises, and 32 collision centers in the United States and the United Kingdom that offer 37 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements include statements regarding the proposed offering, the intended use of proceeds and the pending Hennessy Acquisition. These forward-looking statements often contain words such as “expects,” “anticipates,” “intends,” “plans,”

“believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the impacts of sustained levels of inflation, including reduced affordability of automobiles for consumers, (c) developments in U.S. and global trade policy, including the imposition by the U.S. of significant tariffs on the import of automobiles and certain materials used in our parts and services business and the resulting consequences (including, but not limited to, retaliatory tariffs by non-U.S. nations, supply chain disruptions, vehicle and part cost increases and demand decreases, and potential recessions in the U.S. and U.K.) and the passage of the “One Big Beautiful Bill,” including the associated impact on tax deductions in the domestic car industry and the elimination of certain clean energy tax credits, which could impact incentives for electric vehicle production and sales, (d) the level of manufacturer incentives, (e) our ability to comply with extensive laws, regulations and policies applicable to our operations, including BEV mandates in the U.K., and their impact on new vehicle demand, (f) our ability to obtain an inventory of desirable new and used vehicles (including as a result of changes in the international trade environment), (g) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (h) our cost of financing and the availability of credit for consumers, (i) our ability to complete acquisitions and dispositions, including the pending Hennessy Acquisition, on a timely basis, if at all and the risks associated therewith, (j) our ability to successfully integrate recent and future acquisitions, including the Hennessy Acquisition, and realize the expected benefits from consummated acquisitions, (k) foreign exchange controls and currency fluctuations, (l) the armed conflicts in Ukraine and the Middle East, including that between the U.S. and Iran, (m) broader macroeconomic challenges in the U.K., including inflationary pressures, fluctuations in interest and foreign exchange rates and overall economic volatility, which could further impact vehicle affordability, demand and our financial performance in that market, (n) our ability to maintain sufficient liquidity to operate, and (o) a material failure in or breach of our vendors’ information technology systems and other cybersecurity incidents. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

SOURCE: Group 1 Automotive, Inc.

Investor contacts:

David Helderman

Senior Manager, Investor Relations

Group 1 Automotive, Inc.

ir@group1auto.com

Media contacts:

Pete DeLongchamps

Senior Vice President, Manufacturer Relations,

Financial Services and Corporate Development

Group 1 Automotive, Inc.

pdelongchamps@group1auto.com

Kimberly Barta

Head of Advertising, Brand and Communications

Group 1

Automotive, Inc.

kbarta@group1auto.com

Jude Gorman / Clayton Erwin

Collected Strategies

Group1-CS@collectedstrategies.com