The Penske Automotive Group reported a $2.90-million (or 0.5%) increase parts and service revenue from its retail automotive dealerships in the second quarter of 2019. U.S. parts and service revenue was up 1.6%, while international parts and service revenue decreased 1.5%.
Management attributed the overall increase in service and parts revenue to a $5.40-million (or 1.0%) rise in same-store revenue during the period, partially offset by a $2.50-million decrease from net dealership acquisitions and dispositions.
Excluding $11 million in unfavorable foreign currency fluctuations, same-store service and parts revenue increased 3.1%. The increase in same-store revenue breaks down as a $15.90-million (or 12.6%) rise in warranty revenue that was partially offset by a $10.50-million (or 2.8%) decrease in customer-pay revenue. It should be noted that the customer-pay business went up against an especially strong quarter a year ago.
Penske retail automotive dealership service and parts gross profit was up slightly, going from $328.20 million a year ago to $328.30 million for the three months ended June 30, 2019. Same-store service and parts gross profit increased by $1.30 million (or 0.4%) to $323.20 million.
Excluding $6.40 million in unfavorable foreign currency fluctuations, same-store gross profit was up 2.4%, attributable to the increase in same-store revenue, which increased gross profit by $3.20 million. This was partially offset by a 0.4% decrease in gross margin, which decreased gross profit by $1.90 million.
The same-store gross profit increase breaks down as a $6.60-million (or 9.6%) rise in warranty gross profit that was partially offset by a $5-million (or 2.8%) decline in customer-pay gross profit and a $300,000 (or 0.4%) decrease in vehicle preparation and body shop gross profit.
Bloomfield Hills, MI-based Penske bills itself as the second-largest automotive retailer headquartered in the United States, as measured by the $20.80 billion in total retail automotive dealership revenue it generated in 2018. As of June 30, 2019, Penske operated 334 retail automotive franchises, of which 149 were located in the United States.