Boyd Group Services, which operates a number of collision and glass locations, including Gerber Collision & Glass in the U.S., reports record sales for the first quarter of 2023 ending March 31. Timothy O’Day, president and CEO, says demand is strong but still constrained by a “tight” labor market and subsequent wage pressures, and that those factors could result in continued price increases.
Boyd Group Services reports a 28.4% sales increase for the first quarter of 2023, from $556.8 million in 2022 to $714.9 million. O’Day says that figure reflects a $23.7 million contribution from 52 new locations. Gross profit increased by 33.3% to $327 million and net earnings increased to $20.8 million, compared to $1.6 million in the same period of 2022. Same-store sales increased by 25.2% in Q1 2023.
“Same-store sales benefited from high levels of demand for services, as well as some increase in production capacity related to technician hiring, growth and the technician development program, as well as productivity improvement,” O’Day says, noting those sales aren’t as high as they could be given staffing constraints. “Sales also increased based on higher repair costs due to increasing vehicle complexity, higher part content and cost, increased scanning and calibration services as well as general market inflation.”
O’Day says that while supply chain disruption continues to normalize, sustained levels of high demand result in elevated levels of work-in-process inventory. He says the group’s continued efforts to attract technicians to the industry may also result in continued price increases. According to the company, pricing increases so far have not done enough to attract enough of the needed talent.
“While the ability to service demand continues to be constrained by market conditions, our technician training and other initiatives are providing some improved capacity,” O’Day says. “However, the path to servicing the level of demand requires continuing increases in technician compensation to attract more labor into the industry and company, and this will require continued price increases from our customers.”
The first quarter also saw the group add 23 new locations, 16 through acquisitions and seven start-up locations. However, if the reporting period is extended to May 9, the group’s number of new locations reaches 30.
“Given the high level of location growth in 2021, the strong same-store sales growth during 2022, and the combination of same-store sales growth and location growth thus far in 2023, we remain confident that the company is on track to achieve its long-term growth goals,” O’Day says, “including doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales.”