S&P shifts Group 1 Automotive view to stable

S&P said it shifted the outlook for Group 1 Automotive Inc. to stable from negative.

“Group 1 reported a 10% year-over-year increase in its gross profit in its third-quarter as its higher new-vehicle margins more than offset the effect of its lower volumes. The major factors behind the recent increase in the company’s profit were significant improvements in its new and used vehicle margins and substantial cost leverage as it achieved management’s targeted 20% efficiency improvement in its sales and service processes, S&P said in a press release.

The outlook reflects Group 1’s results for the third quarter ended Sept. 30, and the view that the risk of its debt-to-EBITDA ratio exceeding 4x while its FOCF to debt falls to less than 10% for an extended period has declined, the agency said.

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