The coronavirus pandemic has taken a chunk out of sales across all auto retailers. The path back to profitability seems like a treacherous mountain for many dealers. However, Penske Automotive Group seems to be making the climb at a faster pace than expected. One of the nation’s largest new-vehicle retailers is forecasting a profit when second quarter results are released on July 29th.
CEO Roger S. Penske said in a statement, “I am encouraged by the significant improvement in our operations during the month of June. Our performance in June is the result of a strong operational focus to control costs, manage vehicle inventory, and maximize gross profit.”
The retailer is expecting to report a second quarter earnings per share of $0.52 to $0.57.
The company reported that all of their U.S. retail automotive dealerships are open with the mindset of steady improvement as the year continues. New and used vehicle sales both saw improvements from May to June with their new vehicle unit sales outpacing the rest of the market in June.
The boost towards profitability is a huge positive for the Bloomfield, MI headquartered retailer after the auto group had to furlough more than half of its global workforce. 5,300 employees in the U.S. alone were furloughed with 500 of those employees not returning. a spokesperson for Penske said the company is making steady progress towards bringing back furloughed employees as business improves.
Penske plans to host its second quarter financial results via conference call on July 29th at 2:00 p.m. Eastern Daylight Time. The call will simultaneously be broadcast over the internet and can be accessed at https://services.choruscall.com/links/pag200729.html.
What the profit could mean for the industry
While a new surge of COVID-19 cases arrive, it’s hard to tell if other retailers will experience similar profit results to that of Penske. If operations are halted again due to the pandemic, the new found success could be short-lived. As the next few months unfold, dealers will continue monitoring the number of cases in their region. The resurgence of sales numbers in June has offered a beacon of progress in the midst of uncertainty, but dealers must prepare for a second wave of closures in the event cases continue to rise.
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