Bloomfield Hills-based Penske Automotive Group Inc. plans to more than double revenue for its standalone used-vehicle supercenters' business over the next three years as it adds more than 20 locations by the end of 2023.
The nation's second-largest new-vehicle retailer made the announcement Wednesday as it reported fourth-quarter net income nearly doubling to $201.4 million. Revenue slipped 1.2 percent to $5.81 billion.
"I am very pleased to report 97 percent earnings growth for the fourth quarter," Penske CEO Roger Penske said in a statement. "Our results were driven by same-store retail automotive margin expansion, growth in our commercial truck dealership profitability, and continued strong performance from Penske Transportation Solutions."
Adjusted net income from continuing operations jumped 97 percent to $199.9 million. That figure excluded a $200,000 gain, which came from the sale of dealerships, offset by tax costs to repay certain debt early. Penske sold two Honda dealerships in the Houston area during the quarter.
Penske also in the quarter opened a supercenter in Nottingham, U.K., that is expected to sell 6,000 vehicles a year. The retailer now has 17 standalone used stores in the U.S. and U.K.
Retail sales at the supercenters tumbled 23 percent to 11,923 vehicles, as revenue fell 16 percent to $244.7 million. The company said its U.K. supercenters' business was hurt by a mandatory government shutdown in November amid the coronavirus pandemic.
As part of Penske's used-vehicle expansion, its U.S. supercenters, now operating under the CarSense name, will be rebranded to CarShop in a global branding effort, Penske said. Penske wants the unit by the end of 2023 to annually sell 150,000 or more units, generate $2.5 billion to $3 billion in sales and about $100 million in pretax earnings. Last year, the unit's revenue fell 17 percent to $1 billion on sales of 53,207 vehicles. Sales volume was down a quarter.
In January, Penske opened a Porsche dealership in the Washington, D.C., market that is expected to generate $50 million in annual revenue. An Audi store in southern California and a Honda dealership in Texas that are under construction and expected to open by the end of 2021 will add another collective $100 million in revenue.
The company's retail commercial trucks division posted a 25 percent gain in pretax earnings to $26.5 million. Equity income from its ownership stake in Penske Transportation Solutions also grew in the quarter to $56.5 million, up 55 percent.
Sales: New-vehicle sales fell 7 percent to 52,041. Used-vehicle sales dropped 13 percent to 57,013.
Same-store sales: New-vehicle sales on a same-store basis slipped 4.6 percent to 51,751. That was worse than the 2.4 percent drop for all U.S. new light-vehicle sales in the fourth quarter, according to the Automotive News Research & Data Center. Used-vehicle sales on a same-store basis tumbled 12 percent to 55,901.
Penske doesn't break out its new light-vehicle sales for the U.S. market.
Full-year results: For all of 2020, revenue fell 12 percent to $20.4 billion. Net income rose 25 percent to $545.3 million.
Penske ranks No. 2 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 222,800 new vehicles in 2019.
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February 10, 2021 at 07:35PM
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Penske Automotive Q4 earnings rise, announces major expansion for used-vehicle supercenters - Crain's Detroit Business
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