Surging new-vehicle sales lift Penske to record Q1 results

DETROIT — Penske Automotive Group Inc. set record first-quarter revenue on surging new-vehicle gross profits, higher new-vehicle sales and lower costs — even though its United Kingdom showrooms were shuttered the entire three months amid the coronavirus pandemic.

Net income for Penske more than tripled to $183.1 million, and revenue jumped 15 percent to $5.77 billion. The gains come more than a year into the pandemic, which began taking a toll on auto retailers in last year’s first quarter.

CEO Roger Penske, in a Wednesday statement, credited the year-over-year improvements in part to expense discipline and the use of online retailing tools in the U.K. market.

“We had outstanding performance across our business during the first quarter,” Penske said.

The retailer said it delivered 40,000 new and used vehicles in the U.K. during the quarter and that same-store new-vehicle sales there rose 7.8 percent. The industry average for new-vehicle sales in the U.K. was down 12 percent, Penske said in the statement.

Retail sales at Penske’s 17 standalone CarShop used-car supercenters in the U.S. and the U.K. fell 30 percent to 11,395 vehicles. Revenue declined 21 percent to $242.6 million, which Penske blamed largely on the 43 percent drop in CarShop’s U.K. used-vehicle sales amid mandated coronavirus showroom closures. By contrast, used-vehicle sales at Penske’s U.S. supercenters soared 25 percent.

Penske, which aims to have 40 CarShop outlets by the end of 2023, said two stores will open in the second quarter and another two by the end of 2021.

Shares of Penske rose 1.8 percent to $90.07 in premarket trading on Wednesday.

Pretax earnings for the company’s retail commercial trucks division more than doubled to $27.5 million. This month, Penske acquired Kansas City Freightliner, which it expects will add $450 million in annual revenue.

Penske’s equity income from its ownership stake in Penske Transportation Solutions in the quarter was $53.7 million, nearly quadruple what it was in the first quarter of 2020.

Records: First-quarter revenue; first-quarter income from continuing operations of $182.5 million; and first-quarter earnings per share of $2.26.

Sales: New-vehicle sales jumped 17 percent to 50,409 vehicles. Used-vehicle sales slipped 4.1 percent to 60,443.

Same-store sales: New-vehicle sales on a same-store basis soared 19 percent to 50,322. That was better than the 12 percent increase for all U.S. new light-vehicle sales in the first quarter, according to the Automotive News Research & Data Center. Used-vehicle sales on a same-store basis fell 3.6 percent to 59,815.

Penske didn’t provide exact U.S. figures but said its U.S. same-store new-vehicle sales jumped more than 25 percent, while U.S. same-store used-vehicle sales rose more than 14 percent.

Penske, of Bloomfield Hills, Mich., ranked No. 2 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S., with retail sales of 178,437 new vehicles in 2020. However, Lithia — the third-largest group in the country in 2020 — vaulted past Penske to become the second-largest retailer going forward with its April 12 acquisition of the Suburban Collection.

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