Group 1 Automotive Inc (GPI)

Pretax margin

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before tax but after interest (EBT) (ttm)	US$ in thousands	799,700	860,300	895,900	924,500	982,600	907,100	874,900	860,700	727,600	725,700	663,000	462,900	370,800	305,600	193,500	214,300	227,500	203,900	199,400	211,425
Revenue (ttm)	US$ in thousands	17,760,500	17,358,100	16,826,700	16,421,000	16,137,700	15,590,700	14,935,700	14,495,500	13,664,700	13,097,100	12,626,600	11,044,500	10,721,000	10,910,400	10,987,000	11,869,400	11,991,360	11,788,770	11,560,390	11,497,440
Pretax margin		4.50%	4.96%	5.32%	5.63%	6.09%	5.82%	5.86%	5.94%	5.32%	5.54%	5.25%	4.19%	3.46%	2.80%	1.76%	1.81%	1.90%	1.73%	1.72%	1.84%

December 31, 2023 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $799,700K ÷ $17,760,500K
= 4.50%

The pretax margin of Group 1 Automotive, Inc. has shown a downward trend over the past few quarters. From Q4 2022 to Q4 2023, the pretax margin decreased from 6.07% to 4.48%, indicating a reduction in the company's ability to generate profits before taxes relative to its total revenue. This decline continued through Q1 2023, with the pretax margin falling to 5.63%.

The decreasing trend in pretax margin could be a cause for concern as it suggests that the company's profitability is under pressure. Management should closely monitor this metric and identify potential factors contributing to the decline, such as rising costs, pricing pressures, or inefficiencies in operations. Taking corrective actions to improve profitability and efficiency will be essential to reverse this negative trend and enhance overall financial performance.