Group 1 Completes Hennessy Buy, Posts $8.59 a Share

The Tip Desk · November 2, 2026 · 4 min read

Third-quarter revenue was $5.4 billion; after the quarter, the retailer closed its purchase of 10 Atlanta dealerships.

Group 1 Automotive, Inc. (GPI), a Fortune 250 automotive retailer with 256 dealerships in the U.S. and U.K., completed the purchase of 10 high-volume dealerships from Hennessy Automobile Companies on October 19, 2026, expanding its Atlanta presence to 15 stores and adding about $1.7 billion of expected annual revenues.

The deal closed after the quarter ended. Diluted earnings from continuing operations were $8.59 a share, compared with $1.02 a year earlier, when asset impairments of $123.9 million weighed on results. Net income from continuing operations was $102.9 million. Adjusted diluted earnings from continuing operations were $9.36 a share.

Total revenues were $5.4 billion, down 6.7% from a year earlier, a larger decline than the 5.6% year-over-year drop in the second quarter. Same-store revenues were $5.3 billion, down 2.8%.

President and Chief Executive Officer Daryl Kenningham said the Hennessy purchase aligns with a strategy to focus on high-revenue, premium-brand stores in growing markets and that the company has been reshaping its portfolio into larger, more profitable stores. He said proceeds from sales of stores that do not fit that strategy will support a commitment to reduce leverage.

Year-over-year growth rates improved across key same-store operating metrics versus the second quarter, the company said. In the U.S., same-store customer pay revenue rose 3% and repair orders 4%, and the company said it continued to benefit from cost-cutting actions taken earlier in the year.

New vehicle units sold were 55,259, down 3.5% from a year earlier, a smaller decline than the 4.4% drop in the prior quarter. New-vehicle gross profit per retail unit was $3,074. Used-vehicle retail units were 53,343. Used-vehicle retail gross profit per retail unit was $1,497, up 4.5% from a year earlier, reversing a 4.3% year-over-year decline in the second quarter.

Parts and service gross profit was $392.0 million. Finance and insurance revenues were $215.8 million, down 10.4% from a year earlier. Finance and insurance gross profit per retail unit was $1,987. Selling, general and administrative expenses were 72.3% of gross profit.

U.S. parts and service customer pay revenues were $305.5 million, up 0.6% from a year earlier. On a same-store basis they were $297.4 million, up 3.2%. U.S. SG&A expenses were $452.1 million, down 6.0%. U.S. used-vehicle gross profit per retail unit was $1,527.

In the U.K., new-vehicle retail units were 15,984, up 1.9% from a year earlier. Same-store U.K. new-vehicle units were 15,467, up 8.1%. U.K. used-vehicle retail gross profit per retail unit was $1,437, up 15.7%. U.K. parts and service revenues were $162.3 million. Same-store U.K. parts and service revenues were $159.7 million, up 6.4%.

Year to date the company acquired 14 U.S. dealership operations, including Hennessy, with about $2 billion of expected annual revenues. U.S. disposition annualized revenues were about $505 million. After the quarter it completed U.S. dispositions generating about $305 million of annualized revenues for about $235 million of proceeds, with an additional $125 million of proceeds expected from four more U.S. dealerships under definitive agreement, totaling about $360 million of proceeds.

In the U.K. it disposed of a Volkswagen and an Audi dealership generating about $100 million of annualized revenues, bringing year-to-date U.K. disposition annualized revenues to about $495 million. It reached an agreement with Jaguar Land Rover to revoke its election to terminate 10 JLR franchise agreements and will retain five remaining JLR dealerships. It opened two of three planned Geely locations, with the third expected by December 2026, and agreed with Chery to open an Omoda & Jaecoo location also expected by December 2026.

The company did not repurchase shares in the quarter. Year to date it repurchased 205,190 shares for $72.4 million, leaving $306.3 million remaining under its authorization. Cash and cash equivalents were $881.5 million at September 30, 2026. Total debt was $3.9 billion.