GPI - Earnings call transcript Q4 2024 | Group 1 Automotive, Inc.

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Operator

Good morning, ladies and gentlemen. Welcome to Group 1 Automotive's Fourth Quarter and Full Year 2024 Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call over to Mr. Pete DeLongchamps, Group 1's Senior Vice President, Manufacturer Relations and Financial Services. Please go ahead, Mr. DeLongchamps.

Peter Delongchamps

Betsy. you, Thank and everyone, today's call. Good welcome morning, to the morning earnings related slide related been we posted to to purposes Group for this release issued and on refer presentation will website. adjusted to that a this have results morning comparison The the we call X's that the include reconciliations

made for statements use Securities of statements non-GAAP Before we make management of to conference the like by mentioned XXXX. some brief the measures. the Act the X and forward-looking Except historical harbor Group begin, I'd remarks information during Private about made provisions of Reform Automotive forward-looking that statements of financial safe pursuant call, Litigation are to are

the and from markets, global condition company's acquisitions of differ related in risks results resulting with are vehicles and periods both to results. used new services. limited integration are volume, Exchange future and forecasted described inventory actual statements on and Those the and company's supply, and unknown other Commission. Forward-looking involve cause economy known in successful materially risks and demand the filings the with and pricing, to, not may include, risks for of Those associated adverse in but risks uncertainties, developments Securities impacts which

as In be addition, measures certain non-GAAP rules defined may SEC call. under financial discussed on this

to Vice on call Chief comparable call, and measures Daniel reconciliations Officer. I'd such today's Senior over President non-GAAP any our GAAP President Daryl. company website. financial me of the like by the Financial Officer; required Chief provides As to to most SEC and and Kenningham, now rules, directly the applicable Participating McHenry, hand Daryl measures Executive on its with

Daryl Kenningham

everyone. Good morning, Pete. you, Thank

of team market of the results on quarter, growing in integration our update the integrating team has U.K. our operations the the dynamics. U.S. U.K. and broader U.K. fourth Our start U.K. hard an footprint. I'll at been with work our delivered and outstanding business

some we Inchcape's our first through organizations point expect of the diversification basis. needed fourth XXXX. many additional quarter we're adjust huge Integrating the as corporate of the and throughout carried and be capitalize always, than the any the to continue difficult will and effort. will and positioned in poised to market with retail been U.K. we've incremental refine and outstanding in better to believe history. We're dealerships. X stores U.K. a geographic We finalize based an XX at has real-time We in portfolio. continue brand and SG&A acquisition the pleased the scale, on in quarter I been And business a paths others conditions, on as on completed we've

included restructuring realignment, the workforce of efforts. plan. systems strategic the plan integrations consists facilities, and integration initiation Our other closing This of U.K. certain of work wide

to the of impacted existing disrupt operations The conversion a period included U.K. management It dealer for integration completed. for systems conversion stores. We've system did portion acquired in-store DMS. Our of our our of number motor significantly Inchcape the performance. our examples. a just behind legacy A X of in focus that. trade U.K. Inchcape couple focused and the extremely We've changes Group stores, process steeped on team are made was while those legacy being time of installed productivity retail to source. results the a technician leadership the on In

U.K. must stores. retail the acquisition, to car an the This from move the the Inchcape Inchcape in plans corporate Examples we used marketplace, will reward include pricing We and shop responsive valuation procurement office and throughput. to compensation environment. day-to-day more decision-making and nimble stores and So be allow many on technician to modified focus equipment today's to absolute hiring. activities

place technology transition. that guidelines Now and certainly training help with have to in we them

broader market. the to U.K. Turning

the are in XXXX mandates we've Volkswagen, of challenge will like a and the EV expected able Rover and with ability U.K. vehicle toward of fleet to Land short EVs sales. relationship see close XXXX. The market further strengthen for account significantly bed to to backdrop. XXXX to achieve broader U.K. sales need in and our now great new in shift fell goal order Government-imposed currently, the sales majority commitment brands based macroeconomic size Because challenges. vehicle have presence XX%. U.K., a growth of of difficult BMW, The performance mandated and been target challenged to market Toyota, mix. to lower-margin continue see emissions partners Ford. A of on our further Mercedes-Benz, our zero is a OEM overall to overcome We with XX% critical those And Porsche, focus Audi, the to in proven achieve market

pleased we not improved that with we've the year quarter, the taken actions and U.K. in we're ahead. results process leadership in confident result are performance the our integration that While in will

Now U.S. improvement vehicle our turning to PRU. as in business. record saw units sequential We new sold

in the car X% quarter outpaced that traditionally same-store volumes focused. used volumes a were and industry New vehicle new up is

growth PRU, in service customer pay up record of growth F&I $XXX in steady more finance business nearly quarter penetration held for Used and positive that trends. Parts from $XX X%. a performed the UV reached in with Our the up penetration as penetration with increase vehicle combined a new quarter, improved. and vehicle change same-store resulted finance X% revenues previous a well than product PRU same-store improved and

a quarter. also We nice saw customer counts in increase the in

the to increased X. most it We and under-invested the business on Group XXXX, critical view our leverage plenty as same-store a capacity our We human and is capacity performance. differentiator continue a adding the is continue scheduling continue to in our have in sales believe of into we creative technician area head to after of due X% adding In technicians future. -- we well productivity, on physical the And basis by U.S. count

the in conditioning shops by end program completed We capital of nearly air track is install sales. XXXX. on to after of example and An all to our will invest be continue to in our U.S. it's

conditioning previously higher retention. with we've discussed, air As shops technician have much

always capital allocation. will priority. capital to be Now our highest allocating Properly shifting

While the part use capital. ever. business best is our great of in other their is focused important we vehicle in of return regularly the also shareholders' that adjacencies, than evaluate we more this most the They -- partner networks new retail staying certainly is partners, our the believe business more environment, on of being the franchise we need need to profile turn, OEMs. And ever. it a than them Part

we acquisition customer focus we with such determine driving don't performance that and compete metrics and retention. So intensely sales eligibility, as effectiveness them on

repurchasing we brands metrics. balance with outstanding desirable in confidence to quite be acquisitions approved. The Toyota, are because allows discussions our to while with Honda, our continue opportunities. the years, acquisition acquisitions, examples over X shares. In ability of repurchased OEM focus BMW, the will with the Mercedes, in As a brands we diversity is primarily we That to strong result, markets like dispositions across we stock. XX% we've Audi all those to capital our past on that And engage XXXX will all Land acquisitions, of will on acquire perform balancing Rover due us company grew eligibility and to in any our brand of XXXX, we the well our OEMs. continue on approvability of Porsche, nearly Lexus, XX% And nearly

will evolving thoughts administration's have the and Lastly, landscape. impact on on Washington policies retailers great the a a about conjecture of of deal and There's at new moment OEMs. U.S. few the

execution. outcome EV know on Group impact rates, nimble or best changes focused don't subsidies, capitalize stays and to of tariffs the we we that is the the taxes, in to While X interest on things feel like way ensure

presented. We be variables with have to ready exists of compete whatever on were playing to field whatever set

past years, I any has the that the and us will agility environment. demonstrated win in allow Group several Over flexibility X believe to competitive

operating financial call McHenry, overview. for over CFO, an turn I'll and our Now the Daniel to

Daniel McHenry

$XX quarterly our operations. up service $XX.XX resiliency of all-time of earnings operations Darryl, business new million. demand lines new you, of sold adjusted revenues quarter revenues $XX.XX. Current per annual from $X.X record F&I billion, revenues as of income and quarterly record received and with of the million. on fourth vehicle new intangible dealership reflects $XXX X and volume across diluted the good all-time use quarter units dealerships records annual record lines, $X.X Fourth earnings Automotive XX% reported reported XXXX, $X.X year the and full our and service total share attributable Group U.S. In of parts multiple quarter and billion. This including retail business quarterly same-store. sales XXXX, our a million. Starting to an An $X.X In $XXX We an across adjusted operations parts of for adjusted of per quarter X of primarily from per and new excluded million. earnings of $XXX.X value charges vehicle operations billion, as all [indiscernible] share rights the Quarterly and we share from X% adjusted basis continuing year of diluted records of $XXX from operational full on from in million the billion, including $XX continuing total and income billion, our sales net of Full adjusted U.S. income vehicle revenues all-time $X.X Thank our assets with well and of vehicle $XXX.X franchise all-time effectiveness of morning, all-time of million over new achieved billion of net of of billion impairment everyone. continuing sales of adjusted acquisitions. driving F&I reported diluted $XX.X net from

monitored the consistent in volume an performance, by While quarter car and held a from X% on and fourth the are new we same-store fairly prior and year, reported respectively. $XX with the $XX fourth on as-reported increasing basis, respectively. sequential year Pricing comparable a sequential basis. basis, pleased [indiscernible] quarters. quarter on on quarter increased only EPU year-over-year grew a Used reported X% versus $XX the in GPUs down prior

our barges. of whole We are maintain a pricing technology to volume to with processes, and is discipline believe We ability our this with the testament levels of used and pricing. use pleased

F&I the million. quarterly record a of We're also Our $XXX U.S. for revenues

a fourth was gears repair margin year-over-year. revenues more discipline. F&I was basis X% our and increased activity a over has sequentially The fourth Aftersales gross professionals order orders. by and compensated and warranty to lower profit been on and Our The same-store repair quarter. add same-store the decline our dollars quarter performance collision was fourth our increase quarter respectively. X% of maintain year-over-year, fourth sales demonstrate margin pay. The GPU than $X,XXX average Shifting which work, for X.X% in capacity customer after saw gains the only basis. F&I higher up ability aftersales. GPU These on number per outstanding outperformed quarter a quarter of The in to sequential to

U.S. Our overall XXXX. XX% same-store non-technician head has declined from count

up the costs of SG&A. Wrapping technician let's pre-COVID increased our continued focus is as SG&A period. shift demonstrating adjusted XX% up XX a U.S., to to XX.X%, below gross over levels. sequentially managing points on percentage However, head count profit same that our U.S. basis

quarter was amount to Our to fourth was the execution in exploring outstanding in of and other the quarter, the in operations. maintain the statement in final income relating recognized received million remain we gains In the second A this insurance positioning. we in outage efficiency $XX quarter proceeds of laser-focused will This U.S. note the operational as CDK on XXXX.

the U.K. to Turning

terms total We filed on new on maintain to to to retail pleased X% activity a spec sold were improvements $XXX quarterly respectively. basis an in increase. year-over-year able In headline vehicle profit acquisition decreased leading record and same-store vehicles. be Sequentially, an revenues, year-over-year. sales results, of GPUs reported Same-store to gross all-time improved XX.X% used thanks year-over-year used units a after in basis,

quarter some challenging per almost in by a our unit U.K. adjusted points, will improved leading that our to of in percentage inventory by integration the car challenges to gross U.K. we and to whole, U.K. evidencing quarter X,XXX the sequentially have to reported, same-store business efforts improved we a focus percentage business as for wholesale in of the adjusted execute basis XXXX we SG&A quarter, improved of XX%, gross our losses a profit a control The gross and better XXX activities. market. as SG&A recognize fourth overcome profit a and worsened profit manage GPUs respectively. We in tough prior on However, process efficiencies as cost as compared continue to and U.K. management. year still terms used performance. Same-store SG&A was as

at the efforts Our conversions Inchcape ongoing been first integration anticipate workforce completion include to activities related the principally have quarter. and substantial efficiency. We system end integration of alignment, and activities of operational by

and Turning to liquidity. our balance sheet

capital leverage support approach. and allocation a will cash generation position flexible Our flow strong continue balance to sheet,

As of available acquisition December borrow million on billion and cash line. XX, million of our to liquidity comprised of our accessible $X.X $XXX of $XXX

facility at out defined same $XXX full the cash rent-adjusted XXXX free Cash by year This U.S. and million of ratio the December. end deployed was credit capital our of syndicated dividends, our adjusted repurchasing to the shareholders. the of revenues of operating in share including generation billion Our period $XXX $XX.X X.X% backing acquisition $X.X $XXX million leverage and million a of as after share CapEx. $XXX cash of in for flow was flow approximately resulting through X.XXx flow XX, yielded of combination X December in repurchases since January XX,XXX average price an count $XXX.XX, in reduction million dividends at through our a shares and acquisitions, a of in million

for total at average repurchased of X,XXX we cost price $XXX.XX a of quarter, the During shares fourth million. $XX an

of a a trading We price share of remaining XXXX, Rule XXbX-X $XXX currently common shares repurchase first plan. we common have at million. During cost of our average plan $XXX.XX for Board-authorized the share under an million XX,XXX per quarter $XX.X repurchased total on

As was of fixed, for EPS about in increase debt December every resulting floorplan basis annual XX, secured only the our and funding point XX% $X XXX $X.XX overnight approximately of in billion other of rate. in impact an

regarding session. to well to information the additional our call condition, begin to now posted refer please over the Operator? will turn of operator For additional website. I the question-and-answer the schedules attached news detail as as the presentation release investor to our on our financial

Operator

today question with Weston first David Instructions] Morningstar. from The comes [Operator

David Whiston

on know the there's of is watching you with this splitting and tariffs, going can there tariffs? guys lot on -- of there of or you ton to any Trump in any terms tariffs a of being I any you're indication such even right OEM Is normally. appreciate on the arrangement cost on would of as you the full administration cooperation so now. GM stock happened the what going you uncertainty of give what's I with of kind you're happens bear importer, such dealer, with of think kind us if any But is can the of a given to there's kind the if cost discussed the yesterday,

Daryl Kenningham

are lack David, had any point, looking means to sourcing impact, around gaming haven't OEMs of of the they're this what discussions that retailers. are the plans. might better yet. they're specific or OEMs with word war but talking pricing what and kind our guess, is we production impact cost the a outcomes Daryl. All potential at and own about that and adjustments, rarely an I They look like nothing this it making and that on all for At communicating as their

David Whiston

surge big On know, new We Okay. I'm affordability, you curious, vehicle a year. as was a that concern had big just December. last in

the because for it affordability the election relieved key with think you a in over? in were the forward is customers, I do think curious is still election a problem of really Or But is probably people the concern going especially U.S. over. just XXXX, I'm lot lessened

Daryl Kenningham

know of the know that if pleased growth do don't up our our held we transaction gross not. or I were pleased and as it's prices were Well, with. with election because our same-store we sales and I

and those. the with pretty So healthy is our consumer indication we were pleased is

me lead to believe anything get I would -- worse. that see So and will don't it

better tax I rates something think if if that. potentially on there's it like or could get anything, some stimulation

for our that So interest rates matter.

Operator

comes question Gupta JPMorgan. next Rajat with The from

Rajat Gupta

remarks. wanted in follow on comments the up earlier U.K. Just prepared to the

more respect given to with like is EV it worsen quarter. to of the the here in looks Just fourth being the some It headwinds mandates.

new have once car for running it completed. used restructuring expect seems the just in what would just Just like that I'll you've or follow-up million. car then XXXX. have we are expectation to of what more first run of $XXX kind on for those U.K. sales at What the just could this quarter, restructuring do ask should already given level relatedly the well. And new executed as roughly implications well? to annualized -- And actions what rate on, my here of for an as actions you SG&A the be U.K., you're curious in GPUs there's expenses come

Daryl Kenningham

is most result. take as being vehicle on and will I'm question pretty your right the On now. fleet this retail take U.K. is the And forecast core forced underlying channel demand the in Rajat, growth Darryl. -- through EV in show the margin good. a creating question. to Daniel that's going There's total SG&A looks the And XXXX. pressure in business

And resolved, to the issue. listen that they has political least to visibility get to that U.K., at I rhetoric will the some should And more you think much how I -- of do. really around and And the get it their we there's when just what address that some of So resolved. in does industry.

yet, And will fleet optimistic there mix we're more some natural looks something so what mix around there's and of know it that sales retail a brought And I'll will happen. And EVs. don't resolutions discussion. that like that enough and result in healthier discussion be we the of a to for SG&A should forward. I and Daniel commitment feel turn that it but like over

Daniel McHenry

as this as have should has earnings been call, shock our Rajat, it level. discussed SG&A quarter. on a percent higher no seen I gross a think last of It that was we our at

U.K. the duties January. that costs accounting on of take we and had and we from of a Inchcape of in count of center some Equally Some some to first offshore had carried in the double employees colleagues head so, some for to the the exited involved quarter large we our some for that cost center that the and as activities accounting business. the up employ we outsourced trying onshored those

a our year, as XX%. gross go forward, of percent of SG&A this terms adjusted was In

Our at my next for base we your continue execute model, is that expectation. you going would that to be points on expectation plan least But than better as that that year. XXX for It basis XXXX. that would take we use into reduction get could cost either our if

Operator

The comes next with question from Stanley. Hagan Morgan Daniel

Unknown Analyst

the in I a remarks the in U.K. I higher just we gross. But -- of a know and U.S. already want integration. and now to year-over-year just increase you ask increase prepared SG&A in as Inchcape is trends result about sequential the again about discussed saw also to

do what feel in And more what to cost the so components areas opportunity be there's efficient? you And you inflation? are seeing most

Daniel McHenry

some is count as a this Danielle, Daniel. amount. percent There was head in increase growth SG&A of small

Some opposed it to terms margin due was a vehicles growth new in of as to as percent reduction of year-on-year absolute dollar. margin the on of

Unknown Analyst

Got it.

then are kick thus you more XXXX. state you What just of and trends second off my And Okay. so question used far. consumer, is January the about just seeing

Daryl Kenningham

the Well, and January the to end we're is at not -- of finished prepared have out come we'll -- talk the you've about in seen the industry be that that of quarter. And kind so. yet, forecasts

Operator

from next Murphy of John with America. comes Bank The question

John Murphy

had on asymptotic a do XXXX downside just kind the there's like You Lux strong curious benefit and/or the think bit question, think first scrape But we're saw, obviously, stronger. beyond, GPUs into and going on your we're to a was a that bottom typical while, relatively starting debate GPUs. for an Obviously, along of GPUs. fourth -- much even how here? But curious, seasonality the of pricing reaching seems limit great much settle as of in I here. in of maybe you where with first kind we on to it thoughts being quarter you forward and how time seasonality are little these just a has just a some mean new Darryl, sequential improvement

Daryl Kenningham

generally, John. we're think -- agree I Well, with it, I

fairly a But bottom, see think -- of some quarter naturally buy basis. and hold because luxuries I fourth I if we're right? or you brands that don't few a all mean, I the kind on stock, obviously. think map, we at a we're little push it the to with a reported into we're were the I that the going tight the able and was numbers to not the little were I were then heavy approaching mean PRUs had have in flat big very it. bit think we I GPUs. of basically by over up year-end day quarter fourth we think a

pre-COVID. bottom. think So vehicle probably I to have, with too. the on I It we're vehicles. just the they some much seeing rationalization transaction are obviously content probably in think close And of of their we're think the the customers don't I feels I brands know is absolutely, prices like higher the more but And if the it equipment we're a that, close lot we're bottom. the the the on to than production, -- which helps were

John Murphy

hiring second just on which What almost of then Got like get parts pipeline in gating kind to service. tech That's that guys and that seems done. is it. is said for X% think, because a are and for I on that what growth, technicians you pretty helpful. growth parts And question of on the XXXX, factor the you thinking hires only is service. impressive

Daryl Kenningham

not lowering John. expectations, our We're

and we what got that. this do X in a 'XX some improve to Our at U.K. an the the same different know in were just to and be working trying they're have We're And are probably rely shops. as brands compensation that. like years retention aggressive to do to put our they on stopping plans experimenting more we than recognition continue feel we've opportunity that. 'XX in we targets which we're does the And place don't and in retention project, to to of to some programs. We ago see try and We conditioning point, we creative the or and mentoring of in believe shops in like air higher higher year things our programs we're did us doing things defection lead that that. can't and kind we rest other those evolve and things programs got on retention to with shops. It And in will

continue way X and that's because to what our work this and shops full. do. your our keep the Tech we keeping we schedule work where And [indiscernible] in focus, to of we're is our key that's can going shops customers. places they to get -- So full

So real well. as that's a key

Operator

The comes Jeff Stephens. from next question with Lick

Jeffrey Lick

with they Congrats on were. thing, beat to great obviously, a the as the quarter. results on U.S. I U.K. being as hate strong especially

of surprised us at a I of were the little line think some the U.K. in some items

You'd technician highlighted some of just changeover, little the magnitude in decision-making of to hit down go for just was big pretty kind see the things to giving the other and you in action elaborate now and DMS how more. dealerships. But the pushing XXX could maybe wondering you a productivity, next are terms bps if just the you've things of the process of SG&A maybe impacted the year. more it I terms XXXX. I mean color obviously, direction that opportunity the would how in much in just just how is other right point, negatively

Daryl Kenningham

for like and marketplace serve customers. The to a have corporate react had to go just flexibility decisions technician more replacing and way manage centralized our a business terrific, the are in they're things because of managers us. hiring office business there's have bit approval. quite even brands they centralized. to bought, we better lift I feel like in lot The opportunity. had or geographies think tend put to They the a we it's We than a and is of more their to the decision-making stores way more general their a the to Inchcape great Well, different the was to

to you to writing the wanted We think way corporate have a you don't manage We retail office. If from reprice car, business. approval proper the that's had to think in used a and decisions decisions those in based the them moment. make help at and operators guidelines make needs the technology then the putting those on customer the let best as way to place

I X we've the of day so not the Inchcape moved business to that's those can half all like And to stores. our be I and saw we're resulted in you, out going at of wake But to they're quarter, And that. And great continue in that actions. the see that those feel up from just going throughout improvements to actions it. we tell

So develop I business significant as and that. I really certainly a produce there's got a returns that we've convinced there. shareholders. good that opportunity great I'm our think believe for can today there

do. is. doesn't it not to there's mean There So work certainly

Jeffrey Lick

follow-up talk, for always I half Pete, as a just but curious, not And what And are going is EV are yet. into lot's a normalizing OEMs. sales there they the it's XXXX? focused quick how if back the evolving you with inventory ongoing we relating mandates stop been versa. conversations on go that and The could, with the Obviously, quite Pete, conversations in most as vice on OEMs are

Peter Delongchamps

there's I don't numbers year. OEMs to I So Toyota if Lexus. think so that in year and still this bullish a I OEMs. them with very performance that their are think positive I is think but we're the real you But outlook they -- with you supply, at earlier broad especially been will low the all continue on look supply the point, some I days focus, grow. tell you can higher think brush But OEM we a balancing, the year, take And at with of this for to relationships talking into this and going OEMs, we have Darryl's it's focusing with on just the can the

Operator

question with Jefferies. from next comes Brett The Jordan

Bret Jordan

you as mandate color the dev this guess, fleet that us ICE Could as over give the forcing U.K., and versus maybe a see through on year? X looking on where for and GPUs higher I the them in you is channel unit in the BEV BEV points there impact you're little the more

Daryl Kenningham

they And have volume to to and but weak for lower corporate But margin they impact able rental buyers be there Well, the U.K. of tend the be employees. companies It's -- fleets. to do and sending and -- subsidized more fleet of detail to car And to corporate margin them have impact is on fleet channel, those -- go programs the it. and give so incentives we the margin through be it. those the lower priced some their because in you like the the focused can tend been the not most fleets on

the that's So issue.

Daniel McHenry

market out don't it's here. F&I you Daniel The that fleet income there additional get thing traditionally on the fleet business. any Brad, is on

not that vehicle. with you fleet traditionally take there's addition, In that a really trade

So a that retail much would trading standard deal than it just make. makes what more environment difficult a

Bret Jordan

the and I I seasonal in you you'd much Okay. here I to tailwinds the on in have that is and Or parts some cadence? Great. And replacement guess Tundra mean, of U.S., And like still are guess how benefit from come 'XX. what's engine like that seeing is 'XX? Toyota then into -- early the It yet? things service, seems

Daryl Kenningham

-- some we'll end definitely the warranty there. repair And on warranty come on up yes, on X/X of in pay pretty see in right now. numbers the who some all order. is with see customer tailwind thing high are We'll warranty their The good customers that's 'XX

that warranty So trend helps also business. our high CP

that's X% warranty I the were up the we and -- that's So expect think in in the reasons one to honestly I But quarter through customer of pay. the year. continue

Operator

with next Michael The comes question Freedom Capital. from Ward

Michael Ward

U.K. question more there. X on Just the

average the business from like If to prevents getting anything down like the XX% in corporate that structurally in you was it SG&A, looks XQ. it there U.K. Inchcape the overall and the Is business take that

Daniel McHenry

be structurally that anything, group don't should I X Daniel. think my than that the Inchcape it's happening. If from anything Group better legacy would prevents expectation Mike, there's stores. be that slightly the

than and U.S. the in and more group business England of as structurally structurally are business and that they the tends the reason England behind in are rents in versus U.K. rents between a legacy in X the the north is the Now of be are North. U.K. the just size the The than higher the size to the differentiator big simple Inchcape higher U.S. the

that be as the slightly brand my the gauge to tend Group would than if as it the mixes should than not better, So be businesses well towards good, the X as be luxury of legacy. stores Inchcape legacy expectation higher

So the I if say, absolutely would all, business. than U.K. better, as as, legacy all good in not

Michael Ward

Okay.

then therefore, XQ million well affected about had So the SG&A portion. in that your overall of as you redundant with $XX and costs U.K. as SG&A Inchcape

Daniel McHenry

Mike. that's I fair, think

Daryl Kenningham

really a like, you on good that's Mike, the ways on growth in basis the fourth good we really And quarter, the Yes. thinking we contributing EPS expectations, at broad and X had good. any really, total, without Group very really really it of look versus X And almost business had that is we're feel much. performance U.K. quarter. a U.K. about

feel of get where the to like are only a we activities we the us major we of us, integration and so see to benefits XXXX. That's relative start behind And lot in plus for as today. a those

the you And store in shut I an store for integration that replaced employee X of November when disruptive. new we single down the and do very networks, technology we December. were we Inchcape days to mean late and basically some every today, the store all activities replace has every the in get

we we and more -- and ahead news was it impact business see as into good big more that a expect of our we'll but So 'XX, further get there.

Michael Ward

a in And a that X take That's that steady that look in had you're what like. I or higher bit anything, high rates. seems on Page Pete, comes drift wood, that to different it. XXXX. F&I bit. improvements seems concerns it was going have deck, like little maybe me the looks months side you've fair of about so, to It we at as the a if were might back question, of captive some you assumption? ago some a that Is back sounds another little And there level. a bit, slide finance of little it going not It that, normalize to second to lot me to F&I XX If the your see

Peter Delongchamps

improve I vehicle financing the to those bottomed kind the Mike, out XX%. of captive finance help because We've [indiscernible] real we the as rates, opportunity, car actually up seen number XX%, penetration at XX% to of or Up used new traditional is lower think get XX%.

that job for to So our think we products just executed talked same done have offerings. good of product coming we products there's about We've there -- in that and we maintaining some our teams opportunity year. the great -- a We've a product continued the penetrations on years. of increasing And then couple have. the this and have it offered

So our pleased this F&I performance with year. we're

Operator

comes Jewsikow question Securities. next The Guggenheim from Ron with

Ronald Jewsikow

should just quarter. guess the Maybe very I parts work? we service was because repair just or aware per on in of kind order of your strong tech X% higher is the this through willingness does surrounding the there be RO Is that inflation? of starting print Or to current anything customer off warranty scope carry increase kind and of revenue revenue pass warranty and sign pay per work of a a to kind general of and ability this cost

Daryl Kenningham

half be latter. When parts because counts benefit stores. quarter of this of our may it, though, higher in our about of was customer Well, I you some think it service combine in the of

see the average that specific we're go So to continues our drives. across on the up mileage pleased -- service dollar to increases

-- just And need dollar see continues, that ROs because so vehicles we more higher older repair. as will

believe environment it It's necessarily largely -- I anyway. what's we're to taking not don't us. so do not it. behind any And driving I the pricing. meaningful it's That's And that's think

Ronald Jewsikow

be innings supportive early could just vehicles OEM import know to probably -- the of and your pricing? if and see to situation portion they large it supply for But your we And I on think some on. their your of Okay. extent it's tightest a build Mexican at actually levied like we seems duties that in actually look it's a U.S. very I tariffs, do the Because comment tough brands partners, to

Daryl Kenningham

truth No, that's Yes. that. to there's Absolutely, yes. some --

Operator

Chin The next with from comes question Research Glenn Partners. Seaport

Glenn Chin

year? you remind for related a for XXXX. XXXX Can sales. were are Daryl, Just you question just unchanged to targets what follow-on last after targets those us mentioned

Daryl Kenningham

feel we U.S. like technicians expectations stalls to, stock will on the than was and in lowering terms I our And we do either in what this don't past of that not grew have tech dealership. we X/X have us Well, stores specifically count in physical our that. of technicians limitations limit about the don't Glenn, in by our I we're because in -- not more we're was count any the U.S. think they our the XXX future referring year,

in able number -- being future at on so we of what hire is look technicians. run to open physical not sales rate just And the terms look of like what's run our

keep to have intend we at hiring in past. same been the we rate So the

don't your to. that so that's I answers question if referring or I know And was what not.

Glenn Chin

down? at looks XX does like that it days then does. U.K., come levels, looking the It used of inventory just need in And to

Daniel McHenry

used December Daniel. buoyant say, January tends I to a traditionally month, sales it's fairly to U.K. and the December levels for inventory would for sold we've the by end vehicle a it's of done used sales very month U.K. divided January, of at number the we in that Glenn, vehicle looked effectively in weak vehicles is our at Effectively, it's what is we've the opposite that. be in December. the

So December. that's artificially high for

Operator

question-and-answer This attending in Seeing no concludes session today's the you queue. further our conference conclude for our does questions Thank call. and presentation.

disconnect. may now You

Group 1 Automotive (GPI) 29 Jan 252024 Q4 Earnings call transcript