"The negative in our world is just the difficulty in the UK due to Brexit issues hitting consumer confidence, which hits car sales," Group 1 Chief Executive Earl Hesterberg said in a telephone interview.

"The fact that we could set an all-time quarterly record with no significant financial contribution from over 20 percent of our business is pretty impressive," he added.

Group 1, the No. 3 U.S. auto dealership group, said it is performing a "significant cost reduction effort" in Britain in response.

J.P. Morgan analysts in a research note called the results "not stellar," but said Group 1 trades at a discount to its peers and that any weakness in the stock could signal a buying opportunity. Shares of Group 1 were off 95 cents at $87.04 in afternoon trading.

Net income in the second quarter fell almost 13% to $49.2 million, or $2.64 a share, from $56.5 million, or $2.72 a share, in the year earlier quarter.

Excluding charges related to catastrophic weather and asset impairments, Group 1 earned $2.83 a share. Analysts were expecting $2.76 a share, according to IBES data from Refinitiv.

Revenue rose 2.1% to $3 billion, above the $2.92 billion analysts had expected.

The Houston-based company, with dealerships in the United States, Britain and Brazil, reported a 3.7% increase in gross profit in the quarter as revenue from new-vehicle sales rose 0.6% despite a slight decrease in unit sales, and retail used-vehicle revenue increased 2.1% on 4.6% growth in unit sales.

Same-store revenue rose 6% in the United States, while it slid 7.5% in Britain.

Group 1's U.S. operations accounted for almost 76% of total revenue and about 83% of gross profit, while British operations accounted for about 20% and 14%, respectively.

(Reporting by Ben Klayman in Detroit; Editing by Steve Orlofsky)