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SEC Filings

10-K
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-K on 02/24/2017
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Same-store units increased 3.4% internationally and decreased 2.6% in the U.S. The international same-store unit increase was driven primarily by an increase in premium brands internationally, while the same-store unit decrease in the U.S. was driven primarily by an increased focus on improvements to gross profit, which negatively impacted unit sales.

 

The increase from 2014 to 2015 is due to a 9,393 unit, or 5.2%, increase in same-store used retail unit sales, coupled with a 6,957 unit increase from net dealership acquisitions. Same-store units increased 12.8% internationally and 1.4% in the U.S. The overall same-store increase was driven primarily by a 5.7% increase in premium brands.

 

Overall, we believe our used vehicle sales are being positively impacted by an increase in trade-in units due to increased new unit sales, an increase in lease returns, an increase in active acquisitions of used vehicles from auction, as well as favorable market conditions. 

 

Revenues

 

Used vehicle retail sales revenue increased from 2015 to 2016 due to a $266.9 million increase from net dealership acquisitions, offset by a $28.7 million, or 0.5%, decrease in same-store revenues. Excluding $295.9 million of negative foreign currency fluctuations, same-store used retail revenue increased 5.0%. The same-store revenue decrease is due to the decrease in same-store used retail unit sales, which decreased revenue by $23.7 million, coupled with a $26 per unit decrease in comparative average selling prices (including a $1,548 per unit decrease attributable to negative foreign currency fluctuations), which decreased revenue by $5.0 million. 

 

The increase from 2014 to 2015 is due to a $308.4 million, or 6.3%, increase in same-store revenues, coupled with a $146.0 million increase from net dealership acquisitions. Excluding $209.2 million of negative foreign currency fluctuations, same-store used retail revenue increased 10.5%. The same-store revenue increase is due to the increase in same-store used retail unit sales, which increased revenue by $259.4 million, coupled with a $272 per unit increase in comparative average selling prices (offset by a $1,104 per unit decrease attributable to negative foreign currency fluctuations), which increased revenue by $49.0 million.

 

Gross Profit

 

Retail gross profit from used vehicle sales increased from 2015 to 2016 due to a $17.9 million increase from net dealership acquisitions, offset by a $15.7 million, or 4.8%, decrease in same-store gross profit. Excluding $14.1 million of negative foreign currency fluctuations, same-store gross profit decreased 0.5%. The decrease in same-store gross profit is due to a $74 per unit decrease in average gross profit per used vehicle retailed (including a $74 per unit decrease attributable to negative foreign currency fluctuations), which decreased gross profit by $14.2 million, coupled with the decrease in same-store used retail unit sales, which decreased gross profit by $1.5 million.

 

The decrease from 2014 to 2015 is due to a $10.4 million, or 3.1%,  decrease in same-store gross profit, offset by a $3.2 million increase from net dealership acquisitions. Excluding $12.5 million of negative foreign currency fluctuations, same-store gross profit increased 0.6%. The decrease in same-store gross profit is due to a $146 per unit decrease in average gross profit per used vehicle retailed (including a $66 per unit decrease attributable to negative foreign currency fluctuations), which decreased gross profit by $26.3 million, somewhat offset by the increase in same-store used retail unit sales, which increased gross profit by $15.9 million.

 

We believe the decline in average gross profit per unit and gross margin of used vehicles is due to an increasing availability of lower mileage, late model used vehicles, the relative affordability of new vehicles when compared to used vehicles, and the reduction of manufacturer incentives on used vehicles in the U.K.

 

 

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