Group 1 Automotive Inc.

10/29/2026 | Press release | Distributed by Public on 10/29/2026 13:07

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto, as well as our 2025 Form 10-K.
Overview
We are a leading operator in the automotive retail industry. We sell or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale. We have operations in geographically diverse markets that extend across 17 states in the U.S. and 60 towns and cities in the U.K. As of September 30, 2026, our retail network consisted of 145 dealerships in the U.S. and 104 dealerships in the U.K.
Recent Events
During the second quarter, we entered into an agreement with Chinese automaker Geely to expand its U.K. network through three new locations. We opened the first location in June 2026, the second in October 2026, and expect to open the third location in December. Subsequent to the three months ended September 30, 2026 ("Current Quarter"), we agreed with Chinese automaker Chery to open an Omoda & Jaecoo location in the U.K., which we expect to open in December as well. These additions broaden our U.K. brand portfolio amid increasing consumer adoption of Chinese automotive brands and growth in demand for electric and plug-in hybrid vehicles. We intend to selectively expand our representation of these brands to address evolving customer preferences and support growth in our U.K. segment.
On July 30, 2026, we entered into a Purchase Agreement to acquire 10 automobile dealerships and one collision center, including certain real estate, located in the Greater Atlanta, Georgia market. The Hennessy Acquisition closed on October 19, 2026. Refer to Note 3. Acquisitions and Dispositions within our Notes to Condensed Consolidated Financial Statements for further discussion of the Hennessy Acquisition.
In October 2026, the U.S. and Mexico continued negotiations regarding potential reductions to U.S. tariffs on Mexican automobiles, steel and aluminum, including discussions related to the United States-Mexico-Canada Agreement. Although progress toward an agreement was initially reported, negotiations have subsequently slowed due to disagreements over proposed tariff reductions, including the existing 25% tariff on Mexican automobiles and 50% tariffs on steel and aluminum. Continued uncertainty surrounding these trade negotiations and potential changes to tariffs could increase manufacturers' costs, disrupt supply chains and affect vehicle availability, pricing and consumer demand. The extent to which these developments may impact our results of operations cannot be predicted at this time.
On September 21, 2026, we entered into a Stockholder Agreement with Conifer Management, L.L.C. and certain of its affiliates ("Conifer"), one of our largest stockholders. Our Board of Directors will expand from 10 to 11 directors and appoint to the Board Benjamin Hart, a member of the investment team for the Acacia funds managed by Conifer, effective November 1, 2026. The agreement contains customary standstill, voting, confidentiality and non-disparagement provisions, including Conifer's agreement to vote in accordance with the Board's recommendations, subject to limited exceptions, and a 19% cap on its beneficial ownership. Conifer's continued director designation right is conditioned on maintaining at least 5% beneficial ownership. Refer to Part II, Item 1A. Risk Factors within this Form 10-Q for further discussion of risks associated with our significant stockholders.
On September 16, 2026, the U.S. Federal Reserve raised the target range for the federal funds rate by 25 basis points to 3.75% to 4.00%, effective September 17, 2026, in response to elevated inflation. This marked its first rate increase since July 2023. Elevated inflation may reduce our customers' disposable income, while higher interest rates may increase the monthly cost of financing vehicles, which could negatively affect vehicle affordability and demand throughout the automobile dealership sector. Additionally, higher interest rates could increase our floorplan financing and other borrowing costs. The impact of these macroeconomic developments on our results of operations cannot be predicted with certainty at this time.
On July 20, 2026, President Donald Trump signed a proclamation imposing an additional 50% ad valorem duty on certain products imported from Canada in response to Canada's tariff treatment of U.S. motor vehicles and auto parts. The duty became effective on August 22, 2026, and covered products are not exempt based on preferential treatment under the United States-Mexico-Canada Agreement. In September 2026, the President revised the list of Canadian products subject to the additional duty and provided that, effective September 15, 2026, the duty applies in addition to applicable Section 232 duties. Canada has imposed retaliatory tariffs on a range of U.S. products, including steel and aluminum, in addition to its existing tariffs on certain U.S. vehicles. Given the integration of the U.S. and Canadian automotive industries, these measures could increase manufacturers' costs, disrupt supply chains and affect vehicle availability, pricing and consumer demand. Toyota maintains significant manufacturing operations in Canada, and its Toyota and Lexus brands together represent our largest share of vehicle unit sales. Accordingly, trade measures affecting Canadian automotive production and cross-border supply could affect the cost and availability of vehicles sold at our dealerships. We cannot predict whether these measures will be further modified or challenged, or the extent or duration of any resulting impact on our business or on the automobile dealership sector as a whole.
Beginning in the second quarter of 2026, disruptions in the global supply of Group III base oils, a key component of synthetic motor oil, have resulted in supply constraints and increased costs for certain synthetic oils and lubricants across the sector. These disruptions have been attributed to refinery outages and shipping disruptions associated with ongoing geopolitical conflict in the Middle East. Prolonged supply constraints could increase the cost of lubricants used in our service operations, limit the availability of certain oil grades and affect our ability to perform routine service for customers. At this time, we cannot predict the extent or duration of any such impacts on our operations or on the operations of the broader automobile dealership sector.
In April 2026, we undertook cost-cutting measures within our U.S. business, reducing our staffing by nearly 700 full-time employees and reducing SG&A costs through contract and vendor elimination. We exceeded our target to remove at least $50 million in annual costs from our U.S. operations.
On April 13, 2026, the U.K. Department for Transport announced a proposal to update minimum vehicle emissions standards to align with the Euro 7 standard implemented in the European Union. If adopted, the Euro 7 standard would set stricter standards for exhaust and non-exhaust vehicle emissions, including greenhouse gas ("GHG") emissions. Euro 7 would also set battery durability requirements for EVs. If finalized, stricter emissions standards could result in increased costs and affect our U.K. results of operations. On July 6, 2026, the U.K. Department for Transport opened a consultation on its proposal to prohibit the maintenance or modification of vehicles subsequent to their manufacture that would prevent them from meeting the emissions standards in place when the vehicles were originally produced. The Department for Transport has estimated that the legislation will be passed in 2027.
On February 28, 2026, the U.S. and the State of Israel commenced coordinated military operations against the Islamic Republic of Iran ("Iran"). The resulting conflict has increased volatility in global supply chains and energy markets, as well as geopolitical instability. Disruptions affected energy supplies and critical maritime transit routes, particularly the Strait of Hormuz, driving increases in fuel prices and reductions in supplies, which adversely affected consumer demand for vehicles and broader economic conditions. Although the U.S. and Iran signed a memorandum of understanding on June 17, 2026, intended to end the conflict and reopen the Strait of Hormuz, the agreement subsequently broke down and military operations resumed in July 2026. The conflict remains ongoing, and although commercial traffic through the Strait of Hormuz increased during the third quarter, it has not returned to pre-conflict levels. In October 2026, renewed attacks on commercial vessels in the region further heightened concerns regarding the safety and reliability of maritime shipping routes. As a result, uncertainty regarding energy markets, commercial shipping and broader geopolitical conditions continues, and we cannot predict the extent or duration of any resulting impact on our business, financial condition or results of operations or the impact on the automobile dealership sector as a whole.
On February 20, 2026, the U.S. Supreme Court held that President Donald Trump lacked authority under the International Emergency Economic Powers Act ("IEEPA") to impose certain reciprocal and other emergency-based tariffs. The Supreme Court's decision and related executive action have created uncertainty regarding the future tariff environment, including the potential for litigation, refund claims by parties directly subject to the invalidated tariffs and the use of alternative statutory authorities by the administration to impose new or modified tariffs. In October 2026, U.S. Customs and Border Protection expanded its processing of certain refund claims related to the invalidated IEEPA tariffs. Additionally, the U.S. Court of International Trade certified a class of importers seeking refunds of previously collected duties. The certification remains subject to appeal, and the timing, availability and ultimate amount of any refunds remain uncertain. We cannot predict the timing, scope, nor outcome of future tariff-related actions or their potential effect, if any, on our results of operations or the impact on the operations of the broader automobile dealership sector. We will continue to monitor the impact of the Trump Administration's policies and the response of U.S. trading partners on our results of operations in future periods.
On February 18, 2026, the U.S. Environmental Protection Agency ("EPA") issued a final rule rescinding the GHG "Endangerment Finding," which provides the authority underpinning the majority of the EPA's GHG-related regulations, including those for emissions from new motor vehicles and engines, and the National Highway Traffic Safety Administration's Corporate Average Fuel Economy standards. The final rule also repealed all of the EPA's GHG emission standards for light-duty, medium-duty and heavy-duty motor vehicles and engines. Litigation challenging the EPA's final rule is ongoing, and we cannot predict the final outcome. Certain states, such as California, have previously adopted or have announced an intent to adopt standards regulating GHG and other vehicle emissions and setting EV targets which remain subject to legal challenges. On September 2, 2026, the U.S. District Court for the District of Columbia granted a preliminary injunction requiring the EPA to withdraw or correct its reclassification of certain California emissions waivers as rules subject to Congressional disapproval under the Congressional Review Act. The EPA subsequently appealed the ruling in September 2026. As a result, significant uncertainty remains regarding future U.S. vehicle emissions regulations and their potential impact on our operations and the operations of the broader automobile dealership sector.
We continue to monitor the uncertain macroeconomic, industry and capital market conditions. We assess goodwill and intangible franchise rights for impairment on an annual basis, or more frequently when events or circumstances indicate that an impairment may have occurred. Performance issues at individual dealerships, adverse retail automotive industry and economic trends, a sustained decline in the trading price of our common stock or our market capitalization, including below our book value, reductions in manufacturer incentives, tariffs, franchise terminations or dispositions and increases in interest rates or our cost of capital that increase the discount rates used in our valuations, increase the risk of an impairment charge. When assessing market capitalization, we consider the duration and severity of any decline and a reasonable control premium. Although the effect of the macroeconomic environment and capital market conditions on our results of operations cannot be predicted with certainty, we may be required to record impairment charges if market and industry conditions deteriorate to such a level whereby the fair value of our reporting units or individual franchises is less than the respective carrying value. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge, while non-cash, could have a material adverse effect on our results of operations and stockholders' equity.
As of September 30, 2026, goodwill and intangible franchise rights totaled approximately $2.9 billion, representing approximately 27% of our total assets and approximately 95% of our stockholders' equity, and this amount will increase as a result of the Hennessy Acquisition, the assets of which will be initially recorded at fair value with limited excess of fair value over carrying value. We considered the trading price of our common stock, among other factors, in evaluating whether a triggering event occurred during the Current Quarter and concluded that no interim impairment test was required. We will perform our annual impairment test as of October 31, 2026, and its results will be reflected in our 2026 Form 10-K.
Critical Accounting Policies and Accounting Estimates
For discussion of our critical accounting policies and accounting estimates, refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2025 Form 10-K. There have been no material changes to our critical accounting policies and estimates since December 31, 2025.
Results of Operations
The "same store" amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to accurately manage and monitor the underlying performance of the business and is also useful to investors.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. Our primary foreign currency exposure is to GBP. We consider constant currency information to be useful supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than USD using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. Additionally, we caution investors not to place undue reliance on non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. Our management also uses constant currency and adjusted cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures and the related reconciliations because we consider them useful to investors in evaluating longer-term period-over-period performance. These metrics also allow investors to better understand and evaluate the information used by management to assess operating performance.
Retail new and used vehicle units sold include new and used vehicle agency units sold under agency arrangements with certain manufacturers in the U.K. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues as only the sales commission is reported in revenues for dealerships operating under an agency arrangement. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
Certain amounts in the financial statements may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented.
The following tables summarize our operating results on a reported basis and on a same store basis:
Reported Operating Data - Consolidated
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 2,665.1 $ 2,807.4 $ (142.2) (5.1) % $ (2.7) (5.0) %
Used vehicle retail sales 1,691.1 1,852.1 (161.1) (8.7) % (1.7) (8.6) %
Used vehicle wholesale sales 124.0 148.4 (24.4) (16.5) % (0.1) (16.4) %
Total used 1,815.0 2,000.5 (185.5) (9.3) % (1.9) (9.2) %
Parts and service sales 700.7 733.9 (33.3) (4.5) % (0.5) (4.5) %
F&I, net 215.8 240.9 (25.0) (10.4) % (0.1) (10.3) %
Total revenues $ 5,396.7 $ 5,782.7 $ (386.0) (6.7) % $ (5.3) (6.6) %
Gross profit:
New vehicle retail sales $ 169.9 $ 186.1 $ (16.2) (8.7) % $ (0.2) (8.6) %
Used vehicle retail sales 79.9 85.4 (5.5) (6.5) % (0.1) (6.4) %
Used vehicle wholesale sales (2.7) (0.2) (2.5) NM - NM
Total used 77.1 85.1 (8.0) (9.4) % (0.1) (9.3) %
Parts and service sales 392.0 407.6 (15.7) (3.8) % (0.3) (3.8) %
F&I, net 215.8 240.9 (25.0) (10.4) % (0.1) (10.3) %
Total gross profit $ 854.8 $ 919.7 $ (64.9) (7.1) % $ (0.7) (7.0) %
Gross margin:
New vehicle retail sales 6.4 % 6.6 % (0.3) %
Used vehicle retail sales 4.7 % 4.6 % 0.1 %
Used vehicle wholesale sales (2.2) % (0.2) % (2.0) %
Total used 4.2 % 4.3 % - %
Parts and service sales 55.9 % 55.5 % 0.4 %
Total gross margin 15.8 % 15.9 % (0.1) %
Units sold:
Retail new vehicles sold 55,259 57,269 (2,010) (3.5) %
Retail used vehicles sold 53,343 59,574 (6,231) (10.5) %
Wholesale used vehicles sold 14,301 16,018 (1,717) (10.7) %
Total used 67,644 75,592 (7,948) (10.5) %
Average sales price per unit sold:
New vehicle retail $ 51,123 $ 50,816 $ 307 0.6 % $ (51) 0.7 %
Used vehicle retail $ 31,744 $ 31,112 $ 633 2.0 % $ (27) 2.1 %
Gross profit per unit sold:
New vehicle retail sales $ 3,074 $ 3,250 $ (176) (5.4) % $ (4) (5.3) %
Used vehicle retail sales $ 1,497 $ 1,433 $ 64 4.5 % $ (1) 4.6 %
Used vehicle wholesale sales $ (191) $ (15) $ (176) NM $ 1 NM
Total used $ 1,140 $ 1,126 $ 14 1.2 % $ (1) 1.3 %
F&I PRU $ 1,987 $ 2,061 $ (74) (3.6) % $ (1) (3.5) %
Other:
SG&A expenses $ 618.2 $ 654.9 $ (36.7) (5.6) % $ (0.5) (5.5) %
SG&A as % gross profit 72.3 % 71.2 % 1.1 %
Floorplan expense:
Floorplan interest expense $ 21.0 $ 23.7 $ (2.7) (11.2) % $ - (11.2) %
Less: floorplan assistance (1)
23.0 23.5 (0.5) (2.2) % - (2.1) %
Net floorplan expense $ (2.0) $ 0.2 $ (2.2) $ -
(1) Floorplan assistance is included within Gross profit - New vehicle retail sales above and Cost of sales - New vehicle retail sales in our Condensed Consolidated Statements of Operations.
NM - Not Meaningful
Same Store Operating Data - Consolidated
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 2,608.1 $ 2,629.9 $ (21.8) (0.8) % $ (2.6) (0.7) %
Used vehicle retail sales 1,658.7 1,763.0 (104.3) (5.9) % (1.7) (5.8) %
Used vehicle wholesale sales 117.2 137.5 (20.3) (14.8) % (0.1) (14.7) %
Total used 1,775.9 1,900.5 (124.6) (6.6) % (1.9) (6.5) %
Parts and service sales 687.2 673.8 13.4 2.0 % (0.5) 2.1 %
F&I, net 211.4 232.1 (20.7) (8.9) % (0.1) (8.9) %
Total revenues $ 5,282.7 $ 5,436.4 $ (153.7) (2.8) % $ (5.2) (2.7) %
Gross profit:
New vehicle retail sales $ 166.5 $ 176.4 $ (9.9) (5.6) % $ (0.2) (5.5) %
Used vehicle retail sales 78.7 82.0 (3.3) (4.0) % (0.1) (3.9) %
Used vehicle wholesale sales (2.2) 0.2 (2.4) NM - NM
Total used 76.5 82.2 (5.7) (7.0) % (0.1) (6.9) %
Parts and service sales 383.1 382.6 0.5 0.1 % (0.3) 0.2 %
F&I, net 211.4 232.1 (20.7) (8.9) % (0.1) (8.9) %
Total gross profit $ 837.6 $ 873.4 $ (35.8) (4.1) % $ (0.7) (4.0) %
Gross margin:
New vehicle retail sales 6.4 % 6.7 % (0.3) %
Used vehicle retail sales 4.7 % 4.7 % 0.1 %
Used vehicle wholesale sales (1.9) % 0.2 % (2.1) %
Total used 4.3 % 4.3 % - %
Parts and service sales 55.8 % 56.8 % (1.0) %
Total gross margin 15.9 % 16.1 % (0.2) %
Units sold:
Retail new vehicles sold 53,933 54,615 (682) (1.2) %
Retail used vehicles sold 52,272 57,153 (4,881) (8.5) %
Wholesale used vehicles sold 13,872 15,287 (1,415) (9.3) %
Total used 66,144 72,440 (6,296) (8.7) %
Average sales price per unit sold:
New vehicle retail $ 51,337 $ 50,000 $ 1,337 2.7 % $ (51) 2.8 %
Used vehicle retail $ 31,776 $ 30,868 $ 908 2.9 % $ (27) 3.0 %
Gross profit per unit sold:
New vehicle retail sales $ 3,088 $ 3,230 $ (142) (4.4) % $ (4) (4.3) %
Used vehicle retail sales $ 1,506 $ 1,435 $ 71 5.0 % $ (1) 5.1 %
Used vehicle wholesale sales $ (160) $ 15 $ (174) NM $ 1 NM
Total used $ 1,157 $ 1,135 $ 22 1.9 % $ (1) 2.0 %
F&I PRU $ 1,991 $ 2,077 $ (86) (4.1) % $ (1) (4.1) %
Other:
SG&A expenses $ 604.0 $ 612.9 $ (8.9) (1.5) % $ (0.5) (1.4) %
SG&A as % gross profit 72.1 % 70.2 % 1.9 %
NM - Not Meaningful
Reported Operating Data - Consolidated
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 7,833.6 $ 8,222.8 $ (389.2) (4.7) % $ 39.2 (5.2) %
Used vehicle retail sales 5,184.3 5,455.7 (271.5) (5.0) % 41.0 (5.7) %
Used vehicle wholesale sales 424.9 463.8 (38.8) (8.4) % 3.6 (9.1) %
Total used 5,609.2 5,919.5 (310.3) (5.2) % 44.5 (6.0) %
Parts and service sales 2,097.5 2,144.4 (46.9) (2.2) % 11.4 (2.7) %
F&I, net 648.5 704.8 (56.3) (8.0) % 2.5 (8.4) %
Total revenues $ 16,188.8 $ 16,991.5 $ (802.7) (4.7) % $ 97.7 (5.3) %
Gross profit:
New vehicle retail sales $ 516.1 $ 574.1 $ (58.0) (10.1) % $ 3.1 (10.6) %
Used vehicle retail sales 249.5 275.3 (25.8) (9.4) % 2.0 (10.1) %
Used vehicle wholesale sales (1.9) 1.8 (3.7) NM (0.1) NM
Total used 247.6 277.1 (29.5) (10.7) % 1.8 (11.3) %
Parts and service sales 1,181.0 1,191.4 (10.4) (0.9) % 6.3 (1.4) %
F&I, net 648.5 704.8 (56.3) (8.0) % 2.5 (8.4) %
Total gross profit $ 2,593.2 $ 2,747.4 $ (154.2) (5.6) % $ 13.7 (6.1) %
Gross margin:
New vehicle retail sales 6.6 % 7.0 % (0.4) %
Used vehicle retail sales 4.8 % 5.0 % (0.2) %
Used vehicle wholesale sales (0.5) % 0.4 % (0.8) %
Total used 4.4 % 4.7 % (0.3) %
Parts and service sales 56.3 % 55.6 % 0.7 %
Total gross margin 16.0 % 16.2 % (0.2) %
Units sold:
Retail new vehicles sold 160,992 169,131 (8,139) (4.8) %
Retail used vehicles sold 163,797 179,432 (15,635) (8.7) %
Wholesale used vehicles sold 45,018 49,402 (4,384) (8.9) %
Total used 208,815 228,834 (20,019) (8.7) %
Average sales price per unit sold:
New vehicle retail $ 51,741 $ 50,415 $ 1,325 2.6 % $ 257 2.1 %
Used vehicle retail $ 31,704 $ 30,425 $ 1,278 4.2 % $ 251 3.4 %
Gross profit per unit sold:
New vehicle retail sales $ 3,206 $ 3,394 $ (189) (5.6) % $ 19 (6.1) %
Used vehicle retail sales $ 1,523 $ 1,534 $ (11) (0.7) % $ 12 (1.5) %
Used vehicle wholesale sales $ (43) $ 36 $ (79) NM $ (3) NM
Total used $ 1,186 $ 1,211 $ (25) (2.1) % $ 9 (2.8) %
F&I PRU $ 1,997 $ 2,022 $ (25) (1.3) % $ 8 (1.6) %
Other:
SG&A expenses $ 1,842.2 $ 1,918.2 $ (76.0) (4.0) % $ 12.1 (4.6) %
SG&A as % gross profit 71.0 % 69.8 % 1.2 %
Floorplan expense:
Floorplan interest expense $ 66.3 $ 77.0 $ (10.7) (13.9) % $ 0.5 (14.5) %
Less: floorplan assistance (1)
64.9 66.5 (1.5) (2.3) % - (2.4) %
Net floorplan expense $ 1.4 $ 10.5 $ (9.1) $ 0.5
(1) Floorplan assistance is included within Gross profit - New vehicle retail sales above and Cost of sales - New vehicle retail sales in our Condensed Consolidated Statements of Operations.
NM - Not Meaningful
Same Store Operating Data - Consolidated
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 7,592.6 $ 7,789.7 $ (197.1) (2.5) % $ 39.4 (3.0) %
Used vehicle retail sales 5,024.9 5,203.3 (178.4) (3.4) % 41.0 (4.2) %
Used vehicle wholesale sales 396.2 422.4 (26.3) (6.2) % 3.1 (7.0) %
Total used 5,421.1 5,625.8 (204.7) (3.6) % 44.0 (4.4) %
Parts and service sales 2,037.8 1,981.1 56.6 2.9 % 11.3 2.3 %
F&I, net 631.9 680.5 (48.7) (7.1) % 2.6 (7.5) %
Total revenues $ 15,683.3 $ 16,077.1 $ (393.8) (2.4) % $ 97.3 (3.1) %
Gross profit:
New vehicle retail sales $ 498.7 $ 548.3 $ (49.6) (9.0) % $ 3.1 (9.6) %
Used vehicle retail sales 243.5 265.0 (21.5) (8.1) % 1.9 (8.8) %
Used vehicle wholesale sales (0.6) 3.4 (4.0) (117.8) % (0.1) (114.8) %
Total used 242.9 268.4 (25.5) (9.5) % 1.8 (10.2) %
Parts and service sales 1,144.7 1,123.2 21.5 1.9 % 6.2 1.4 %
F&I, net 631.9 680.5 (48.7) (7.1) % 2.6 (7.5) %
Total gross profit $ 2,518.1 $ 2,620.4 $ (102.3) (3.9) % $ 13.6 (4.4) %
Gross margin:
New vehicle retail sales 6.6 % 7.0 % (0.5) %
Used vehicle retail sales 4.8 % 5.1 % (0.2) %
Used vehicle wholesale sales (0.2) % 0.8 % (1.0) %
Total used 4.5 % 4.8 % (0.3) %
Parts and service sales 56.2 % 56.7 % (0.5) %
Total gross margin 16.1 % 16.3 % (0.2) %
Units sold:
Retail new vehicles sold 156,585 161,555 (4,970) (3.1) %
Retail used vehicles sold 159,307 171,842 (12,535) (7.3) %
Wholesale used vehicles sold 43,445 46,499 (3,054) (6.6) %
Total used 202,752 218,341 (15,589) (7.1) %
Average sales price per unit sold:
New vehicle retail $ 51,652 $ 50,021 $ 1,631 3.3 % $ 265 2.7 %
Used vehicle retail $ 31,597 $ 30,297 $ 1,300 4.3 % $ 258 3.4 %
Gross profit per unit sold:
New vehicle retail sales $ 3,185 $ 3,394 $ (209) (6.2) % $ 20 (6.7) %
Used vehicle retail sales $ 1,528 $ 1,542 $ (14) (0.9) % $ 12 (1.7) %
Used vehicle wholesale sales $ (14) $ 73 $ (87) (119.1) % $ (2) (115.9) %
Total used $ 1,198 $ 1,229 $ (31) (2.6) % $ 9 (3.3) %
F&I PRU $ 2,000 $ 2,041 $ (41) (2.0) % $ 8 (2.4) %
Other:
SG&A expenses $ 1,813.2 $ 1,812.9 $ 0.3 - % $ 11.7 (0.6) %
SG&A as % gross profit 72.0 % 69.2 % 2.8 %
Reported Operating Data - U.S.
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 2,050.5 $ 2,187.0 $ (136.6) (6.2) %
Used vehicle retail sales 1,146.8 1,230.4 (83.5) (6.8) %
Used vehicle wholesale sales 74.3 90.9 (16.6) (18.2) %
Total used 1,221.2 1,321.3 (100.1) (7.6) %
Parts and service sales 538.4 567.6 (29.2) (5.1) %
F&I, net 181.0 202.1 (21.0) (10.4) %
Total revenues $ 3,991.1 $ 4,277.9 $ (286.9) (6.7) %
Gross profit:
New vehicle retail sales $ 121.1 $ 138.1 $ (17.0) (12.3) %
Used vehicle retail sales 54.4 60.6 (6.2) (10.2) %
Used vehicle wholesale sales - 1.1 (1.1) (103.9) %
Total used 54.4 61.7 (7.3) (11.8) %
Parts and service sales 301.1 313.1 (12.0) (3.8) %
F&I, net 181.0 202.1 (21.0) (10.4) %
Total gross profit $ 657.7 $ 715.0 $ (57.3) (8.0) %
Gross margin:
New vehicle retail sales 5.9 % 6.3 % (0.4) %
Used vehicle retail sales 4.7 % 4.9 % (0.2) %
Used vehicle wholesale sales (0.1) % 1.2 % (1.2) %
Total used 4.5 % 4.7 % (0.2) %
Parts and service sales 55.9 % 55.2 % 0.8 %
Total gross margin 16.5 % 16.7 % (0.2) %
Units sold:
Retail new vehicles sold 39,275 41,582 (2,307) (5.5) %
Retail used vehicles sold 35,662 39,636 (3,974) (10.0) %
Wholesale used vehicles sold 8,749 9,984 (1,235) (12.4) %
Total used 44,411 49,620 (5,209) (10.5) %
Average sales price per unit sold:
New vehicle retail $ 52,208 $ 52,595 $ (388) (0.7) %
Used vehicle retail $ 32,158 $ 31,042 $ 1,117 3.6 %
Gross profit per unit sold:
New vehicle retail sales $ 3,084 $ 3,322 $ (238) (7.2) %
Used vehicle retail sales $ 1,527 $ 1,529 $ (3) (0.2) %
Used vehicle wholesale sales $ (5) $ 108 $ (112) (104.5) %
Total used $ 1,225 $ 1,243 $ (18) (1.5) %
F&I PRU $ 2,416 $ 2,488 $ (72) (2.9) %
Other:
SG&A expenses $ 452.1 $ 481.2 $ (29.0) (6.0) %
SG&A as % gross profit 68.7 % 67.3 % 1.5 %
Same Store Operating Data - U.S.
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 2,013.3 $ 2,084.5 $ (71.2) (3.4) %
Used vehicle retail sales 1,124.1 1,200.6 (76.5) (6.4) %
Used vehicle wholesale sales 73.1 85.5 (12.3) (14.4) %
Total used 1,197.2 1,286.1 (88.9) (6.9) %
Parts and service sales 527.5 523.6 3.8 0.7 %
F&I, net 177.2 197.8 (20.6) (10.4) %
Total revenues $ 3,915.1 $ 4,092.0 $ (176.9) (4.3) %
Gross profit:
New vehicle retail sales $ 118.5 $ 133.6 $ (15.1) (11.3) %
Used vehicle retail sales 54.1 59.1 (5.0) (8.5) %
Used vehicle wholesale sales 0.2 1.1 (0.9) (84.4) %
Total used 54.2 60.2 (6.0) (9.9) %
Parts and service sales 294.5 297.0 (2.5) (0.8) %
F&I, net 177.2 197.8 (20.6) (10.4) %
Total gross profit $ 644.5 $ 688.6 $ (44.2) (6.4) %
Gross margin:
New vehicle retail sales 5.9 % 6.4 % (0.5) %
Used vehicle retail sales 4.8 % 4.9 % (0.1) %
Used vehicle wholesale sales 0.2 % 1.3 % (1.1) %
Total used 4.5 % 4.7 % (0.2) %
Parts and service sales 55.8 % 56.7 % (0.9) %
Total gross margin 16.5 % 16.8 % (0.4) %
Units sold:
Retail new vehicles sold 38,466 40,307 (1,841) (4.6) %
Retail used vehicles sold 35,005 38,889 (3,884) (10.0) %
Wholesale used vehicles sold 8,609 9,771 (1,162) (11.9) %
Total used 43,614 48,660 (5,046) (10.4) %
Average sales price per unit sold:
New vehicle retail $ 52,340 $ 51,716 $ 625 1.2 %
Used vehicle retail $ 32,112 $ 30,873 $ 1,239 4.0 %
Gross profit per unit sold:
New vehicle retail sales $ 3,082 $ 3,315 $ (233) (7.0) %
Used vehicle retail sales $ 1,544 $ 1,520 $ 25 1.6 %
Used vehicle wholesale sales $ 20 $ 113 $ (93) (82.3) %
Total used $ 1,243 $ 1,237 $ 6 0.5 %
F&I PRU $ 2,411 $ 2,497 $ (86) (3.5) %
Other:
SG&A expenses $ 443.8 $ 459.7 $ (15.8) (3.4) %
SG&A as % gross profit 68.9 % 66.8 % 2.1 %
U.S. Segment - Three Months Ended September 30, 2026 Compared to 2025
Revenues
Total revenues in the U.S. during the Current Quarter decreased $286.9 million, or 6.7%, as compared to the three months ended September 30, 2025 ("Prior Year Quarter"), driven by lower same store revenues and the disposition of stores.
Total same store revenues in the U.S. during the Current Quarter decreased $176.9 million, or 4.3%, as compared to the Prior Year Quarter, driven by lower revenues across most business lines.
New vehicle retail same store revenues underperformed the Prior Year Quarter, driven by a decrease in units sold, partially offset by higher pricing. This underperformance reflects affordability pressures impacting demand, as well as inventory pressure on certain brands. We ended the Current Quarter with a U.S. new vehicle inventory supply of 51 days, one day lower than the Prior Year Quarter.
Used vehicle retail same store revenues underperformed the Prior Year Quarter, driven by a decrease in units sold, partially offset by higher pricing. We attribute this underperformance to the same affordability pressures affecting new vehicle demand, as well as ongoing inventory supply constraints that limit available vehicle selection. We ended the Current Quarter with a U.S. used vehicle inventory supply of 33 days, two days higher than the Prior Year Quarter. Used vehicle wholesale same store revenues underperformed the Prior Year Quarter, driven by fewer units sold, coupled with lower pricing.
Parts and service same store revenues outperformed the Prior Year Quarter, driven by increases in customer pay, wholesale and warranty revenues, partially offset by a decrease in collision revenues. Same store customer pay repair orders increased compared to the Prior Year Quarter, reflecting continued demand for our service offerings. We continue to invest in incremental service capacity through new dealership construction and expansion of existing facilities.
F&I same store revenues underperformed the Prior Year Quarter, driven by lower same store new and used vehicle retail units sold, coupled with lower penetration rates on certain product offerings, partially offset by higher income per contract across several of our products.
Gross Profit
Total gross profit in the U.S. during the Current Quarter decreased $57.3 million, or 8.0%, as compared to the Prior Year Quarter, driven by lower same store gross profit and the disposition of stores.
Total same store gross profit in the U.S. during the Current Quarter decreased $44.2 million, or 6.4%, as compared to the Prior Year Quarter, driven by lower gross profit across all business lines.
New vehicle retail same store gross profit underperformed the Prior Year Quarter, driven by a decrease in gross profit per unit sold and a decline in same store new vehicle retail units sold. The decline in units sold reflects reduced inventory availability for certain brands, and vehicle affordability continues to be a concern for consumers.
Used vehicle retail same store gross profit underperformed the Prior Year Quarter, primarily driven by a decrease in same store used vehicle retail units sold, partially offset by higher same store gross profit per unit sold. Additionally, the limited availability of new vehicle inventory for certain brands reduced used vehicle availability and, along with ongoing affordability concerns, further impacted used vehicle retail units sold. Used vehicle wholesale same store gross profit underperformed the Prior Year Quarter, driven by a decrease in same store gross profit per unit sold, coupled with a decrease in same store units sold.
Parts and service same store gross profit underperformed the Prior Year Quarter, driven by decreases in collision and wholesale gross profit, partially offset by increases in customer pay and warranty gross profit. We continue to prioritize higher margin service business and shop efficiency initiatives.
F&I same store gross profit underperformed the Prior Year Quarter, as described above for F&I same store revenues.
Total same store gross margin in the U.S. decreased 37 basis points for the Current Quarter as compared to the Prior Year Quarter.
SG&A Expenses
SG&A as a percentage of gross profit increased 146 basis points and 212 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.
Total SG&A expenses in the U.S. during the Current Quarter decreased $29.0 million, or 6.0%, as compared to the Prior Year Quarter, primarily driven by lower same store SG&A expenses and the disposition of stores. Total same store SG&A expenses in the U.S. during the Current Quarter decreased $15.8 million, or 3.4%, as compared to the Prior Year Quarter, primarily driven by a decrease in employee-related costs resulting from reduced staffing as part of our cost-cutting measures and lower commission expense associated with lower gross profit, as well as lower legal settlements, partially offset by acquisition costs related to the Hennessy Acquisition, higher legal fees and advertising expense.
Reported Operating Data - U.S.
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 5,925.5 $ 6,288.7 $ (363.2) (5.8) %
Used vehicle retail sales 3,377.2 3,577.9 (200.8) (5.6) %
Used vehicle wholesale sales 256.6 269.4 (12.8) (4.8) %
Total used 3,633.8 3,847.3 (213.6) (5.6) %
Parts and service sales 1,596.6 1,654.4 (57.8) (3.5) %
F&I, net 532.4 586.5 (54.1) (9.2) %
Total revenues $ 11,688.3 $ 12,376.9 $ (688.6) (5.6) %
Gross profit:
New vehicle retail sales $ 361.6 $ 419.2 $ (57.6) (13.7) %
Used vehicle retail sales 170.3 195.0 (24.8) (12.7) %
Used vehicle wholesale sales 5.2 6.2 (1.0) (15.6) %
Total used 175.5 201.2 (25.7) (12.8) %
Parts and service sales 893.9 911.8 (17.9) (2.0) %
F&I, net 532.4 586.5 (54.1) (9.2) %
Total gross profit $ 1,963.4 $ 2,118.7 $ (155.3) (7.3) %
Gross margin:
New vehicle retail sales 6.1 % 6.7 % (0.6) %
Used vehicle retail sales 5.0 % 5.5 % (0.4) %
Used vehicle wholesale sales 2.0 % 2.3 % (0.3) %
Total used 4.8 % 5.2 % (0.4) %
Parts and service sales 56.0 % 55.1 % 0.9 %
Total gross margin 16.8 % 17.1 % (0.3) %
Units sold:
Retail new vehicles sold 112,490 120,484 (7,994) (6.6) %
Retail used vehicles sold 106,020 117,914 (11,894) (10.1) %
Wholesale used vehicles sold 27,629 29,862 (2,233) (7.5) %
Total used 133,649 147,776 (14,127) (9.6) %
Average sales price per unit sold:
New vehicle retail $ 52,676 $ 52,195 $ 481 0.9 %
Used vehicle retail $ 31,854 $ 30,344 $ 1,511 5.0 %
Gross profit per unit sold:
New vehicle retail sales $ 3,215 $ 3,479 $ (265) (7.6) %
Used vehicle retail sales $ 1,606 $ 1,654 $ (48) (2.9) %
Used vehicle wholesale sales $ 188 $ 206 $ (18) (8.8) %
Total used $ 1,313 $ 1,361 $ (49) (3.6) %
F&I PRU $ 2,437 $ 2,460 $ (24) (1.0) %
Other:
SG&A expenses $ 1,314.7 $ 1,400.2 $ (85.5) (6.1) %
SG&A as % gross profit 67.0 % 66.1 % 0.9 %
Same Store Operating Data - U.S.
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/(Decrease) % Change
Revenues:
New vehicle retail sales $ 5,740.5 $ 6,018.7 $ (278.2) (4.6) %
Used vehicle retail sales 3,249.8 3,476.1 (226.2) (6.5) %
Used vehicle wholesale sales 245.8 247.8 (2.0) (0.8) %
Total used 3,495.7 3,723.9 (228.2) (6.1) %
Parts and service sales 1,548.3 1,532.5 15.8 1.0 %
F&I, net 517.6 572.5 (54.8) (9.6) %
Total revenues $ 11,302.1 $ 11,847.5 $ (545.5) (4.6) %
Gross profit:
New vehicle retail sales $ 347.5 $ 405.7 $ (58.2) (14.3) %
Used vehicle retail sales 166.0 190.2 (24.2) (12.7) %
Used vehicle wholesale sales 5.5 5.9 (0.4) (6.2) %
Total used 171.5 196.0 (24.5) (12.5) %
Parts and service sales 864.7 866.1 (1.4) (0.2) %
F&I, net 517.6 572.5 (54.8) (9.6) %
Total gross profit $ 1,901.3 $ 2,040.2 $ (138.9) (6.8) %
Gross margin:
New vehicle retail sales 6.1 % 6.7 % (0.7) %
Used vehicle retail sales 5.1 % 5.5 % (0.4) %
Used vehicle wholesale sales 2.2 % 2.4 % (0.1) %
Total used 4.9 % 5.3 % (0.4) %
Parts and service sales 55.9 % 56.5 % (0.7) %
Total gross margin 16.8 % 17.2 % (0.4) %
Units sold:
Retail new vehicles sold 109,448 116,491 (7,043) (6.0) %
Retail used vehicles sold 102,649 114,886 (12,237) (10.7) %
Wholesale used vehicles sold 26,829 28,779 (1,950) (6.8) %
Total used 129,478 143,665 (14,187) (9.9) %
Average sales price per unit sold:
New vehicle retail $ 52,450 $ 51,666 $ 783 1.5 %
Used vehicle retail $ 31,660 $ 30,257 $ 1,403 4.6 %
Gross profit per unit sold:
New vehicle retail sales $ 3,175 $ 3,482 $ (308) (8.8) %
Used vehicle retail sales $ 1,617 $ 1,655 $ (38) (2.3) %
Used vehicle wholesale sales $ 205 $ 204 $ 1 0.6 %
Total used $ 1,325 $ 1,365 $ (40) (2.9) %
F&I PRU $ 2,441 $ 2,474 $ (34) (1.4) %
Other:
SG&A expenses $ 1,314.1 $ 1,344.2 $ (30.0) (2.2) %
SG&A as % gross profit 69.1 % 65.9 % 3.2 %
U.S. Segment - Nine Months Ended September 30, 2026 Compared to 2025
Revenues
Total revenues in the U.S. during the nine months ended September 30, 2026 ("Current Year") decreased $688.6 million, or 5.6%, as compared to the nine months ended September 30, 2025 ("Prior Year"), driven by lower same store revenues and the disposition of stores.
Total same store revenues in the U.S. during the Current Year decreased $545.5 million, or 4.6%, as compared to the Prior Year. This decrease was driven by lower revenues across most business lines.
New vehicle retail same store revenues underperformed the Prior Year, driven by a decrease in units sold, partially offset by higher pricing. This underperformance reflects affordability pressures impacting demand, as well as inventory pressure on certain brands. Additionally, the Prior Year had strong results ahead of the implementation of announced tariffs. We ended the Current Year with a U.S. new vehicle inventory supply of 51 days, one day lower than the Prior Year.
Used vehicle retail same store revenues underperformed the Prior Year, driven by a decrease in units sold, partially offset by higher pricing. We attribute this underperformance to the same affordability pressures affecting new vehicle demand, as well as ongoing inventory supply constraints that limited available vehicle selection. We ended the Current Year with a U.S. used vehicle inventory supply of 33 days, two days higher than the Prior Year. Used vehicle wholesale same store revenues underperformed the Prior Year, driven by fewer units sold, partially offset by higher pricing.
Parts and service same store revenues outperformed the Prior Year, driven by increases in customer pay, warranty and wholesale revenues, partially offset by a decrease in collision revenues. Same store customer pay repair orders increased compared to the Prior Year, reflecting continued demand for our service offerings. We continue to invest in incremental service capacity through new dealership construction and expansion of existing facilities.
F&I same store revenues underperformed the Prior Year, primarily driven by lower same store new and used vehicle retail units sold, coupled with lower penetration rates on certain product offerings, partially offset by higher income per contract across several of our products.
Gross Profit
Total gross profit in the U.S. during the Current Year decreased $155.3 million, or 7.3%, as compared to the Prior Year, driven by lower same store gross profit and the disposition of stores.
Total same store gross profit in the U.S. during the Current Year decreased $138.9 million, or 6.8%, as compared to the Prior Year, driven by lower gross profit across all business lines.
New vehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in gross profit per unit sold and a decline in same store new vehicle retail units sold. The decline in units sold reflects reduced inventory availability for certain brands, and vehicle affordability remains a concern for consumers.
Used vehicle retail same store gross profit underperformed the Prior Year, primarily driven by a decrease in same store used vehicle retail units sold, coupled with lower same store gross profit per unit sold. Additionally, the limited availability of new vehicle inventory for certain brands reduced used vehicle availability and, along with ongoing affordability concerns, further impacted used vehicle retail units sold. Used vehicle wholesale same store gross profit underperformed the Prior Year, primarily driven by a decrease in same store units sold.
Parts and service same store gross profit underperformed the Prior Year, driven by decreases in collision and wholesale gross profit, partially offset by increases in customer pay and warranty gross profit. This reflects both the impact of the strategic decision to reduce our collision footprint in exchange for higher margin service business, as well as our continued focus on shop efficiency.
F&I same store gross profit underperformed the Prior Year, as described above for F&I same store revenues.
Total same store gross margin in the U.S. decreased 40 basis points for the Current Year as compared to the Prior Year.
SG&A Expenses
SG&A as a percentage of gross profit increased 87 basis points and 323 basis points on an as reported and same store basis, respectively, as compared to the Prior Year.
Total SG&A expenses in the U.S. during the Current Year decreased $85.5 million, or 6.1%, as compared to the Prior Year, primarily driven by lower same store SG&A expenses and the disposition of stores, including a $43.2 million increase in gains recognized on disposal of assets. Total same store SG&A expenses in the U.S. during the Current Year decreased $30.0 million, or 2.2%, as compared to the Prior Year, primarily driven by a decrease in employee-related costs resulting from reduced staffing as part of our cost-cutting measures and lower commission expense associated with lower gross profit, as well as lower legal settlements. These decreases were partially offset by acquisition costs related to the Hennessy Acquisition, higher legal fees and advertising expense, lower manufacturer advertising assistance as a result of decreases in units sold, as well as the absence of CDK outage related credits recognized in the Prior Year that did not recur in the Current Year.
Reported Operating Data - U.K.
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 614.7 $ 620.4 $ (5.7) (0.9) % $ (2.7) (0.5) %
Used vehicle retail sales 544.2 621.8 (77.5) (12.5) % (1.7) (12.2) %
Used vehicle wholesale sales 49.6 57.5 (7.8) (13.6) % (0.1) (13.4) %
Total used 593.9 679.3 (85.4) (12.6) % (1.9) (12.3) %
Parts and service sales 162.3 166.3 (4.1) (2.4) % (0.5) (2.1) %
F&I, net 34.8 38.8 (4.0) (10.4) % (0.1) (10.0) %
Total revenues $ 1,405.6 $ 1,504.8 $ (99.1) (6.6) % $ (5.3) (6.2) %
Gross profit:
New vehicle retail sales $ 48.8 $ 48.0 $ 0.8 1.6 % $ (0.2) 2.1 %
Used vehicle retail sales 25.4 24.8 0.7 2.6 % (0.1) 2.9 %
Used vehicle wholesale sales (2.7) (1.3) (1.4) (103.5) % - (104.6) %
Total used 22.7 23.4 (0.7) (3.0) % (0.1) (2.8) %
Parts and service sales 90.9 94.5 (3.7) (3.9) % (0.3) (3.5) %
F&I, net 34.8 38.8 (4.0) (10.4) % (0.1) (10.0) %
Total gross profit $ 197.1 $ 204.7 $ (7.6) (3.7) % $ (0.7) (3.3) %
Gross margin:
New vehicle retail sales 7.9 % 7.7 % 0.2 %
Used vehicle retail sales 4.7 % 4.0 % 0.7 %
Used vehicle wholesale sales (5.4) % (2.3) % (3.1) %
Total used 3.8 % 3.5 % 0.4 %
Parts and service sales 56.0 % 56.8 % (0.8) %
Total gross margin 14.0 % 13.6 % 0.4 %
Units sold:
Retail new vehicles sold 15,984 15,687 297 1.9 %
Retail used vehicles sold 17,681 19,938 (2,257) (11.3) %
Wholesale used vehicles sold 5,552 6,034 (482) (8.0) %
Total used 23,233 25,972 (2,739) (10.5) %
Average sales price per unit sold:
New vehicle retail $ 47,756 $ 45,326 $ 2,430 5.4 % $ (211) 5.8 %
Used vehicle retail $ 30,906 $ 31,251 $ (345) (1.1) % $ (99) (0.8) %
Gross profit per unit sold:
New vehicle retail sales $ 3,051 $ 3,059 $ (8) (0.3) % $ (15) 0.2 %
Used vehicle retail sales $ 1,437 $ 1,242 $ 196 15.7 % $ (4) 16.1 %
Used vehicle wholesale sales $ (485) $ (219) $ (265) (121.2) % $ 2 (122.3) %
Total used $ 978 $ 902 $ 76 8.4 % $ (2) 8.7 %
F&I PRU $ 1,033 $ 1,089 $ (56) (5.1) % $ (4) (4.8) %
Other:
SG&A expenses $ 166.0 $ 173.7 $ (7.7) (4.4) % $ (0.5) (4.1) %
SG&A as % gross profit 84.2 % 84.9 % (0.6) %
Same Store Operating Data - U.K.
(In millions, except unit data)
Three Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 594.8 $ 545.4 $ 49.4 9.1 % $ (2.6) 9.5 %
Used vehicle retail sales 534.6 562.4 (27.8) (4.9) % (1.7) (4.6) %
Used vehicle wholesale sales 44.1 52.0 (8.0) (15.3) % (0.1) (15.0) %
Total used 578.7 614.5 (35.7) (5.8) % (1.9) (5.5) %
Parts and service sales 159.7 150.2 9.6 6.4 % (0.5) 6.7 %
F&I, net 34.3 34.3 (0.1) (0.2) % (0.1) 0.2 %
Total revenues $ 1,367.5 $ 1,344.3 $ 23.2 1.7 % $ (5.2) 2.1 %
Gross profit:
New vehicle retail sales $ 48.0 $ 42.8 $ 5.2 12.1 % $ (0.2) 12.6 %
Used vehicle retail sales 24.7 22.9 1.8 7.7 % (0.1) 8.0 %
Used vehicle wholesale sales (2.4) (0.9) (1.5) NM - NM
Total used 22.3 22.0 0.3 1.1 % (0.1) 1.4 %
Parts and service sales 88.6 85.6 3.0 3.5 % (0.3) 3.9 %
F&I, net 34.3 34.3 (0.1) (0.2) % (0.1) 0.2 %
Total gross profit $ 193.1 $ 184.8 $ 8.4 4.5 % $ (0.7) 4.9 %
Gross margin:
New vehicle retail sales 8.1 % 7.9 % 0.2 %
Used vehicle retail sales 4.6 % 4.1 % 0.5 %
Used vehicle wholesale sales (5.4) % (1.7) % (3.7) %
Total used 3.8 % 3.6 % 0.3 %
Parts and service sales 55.5 % 57.0 % (1.5) %
Total gross margin 14.1 % 13.7 % 0.4 %
Units sold:
Retail new vehicles sold 15,467 14,308 1,159 8.1 %
Retail used vehicles sold 17,267 18,264 (997) (5.5) %
Wholesale used vehicles sold 5,263 5,516 (253) (4.6) %
Total used 22,530 23,780 (1,250) (5.3) %
Average sales price per unit sold:
New vehicle retail $ 48,155 $ 44,288 $ 3,868 8.7 % $ (213) 9.2 %
Used vehicle retail $ 31,092 $ 30,859 $ 233 0.8 % $ (100) 1.1 %
Gross profit per unit sold:
New vehicle retail sales $ 3,103 $ 2,993 $ 110 3.7 % $ (15) 4.2 %
Used vehicle retail sales $ 1,428 $ 1,254 $ 174 13.9 % $ (4) 14.2 %
Used vehicle wholesale sales $ (454) $ (161) $ (294) NM $ 3 NM
Total used $ 988 $ 926 $ 63 6.8 % $ (3) 7.0 %
F&I PRU $ 1,046 $ 1,053 $ (7) (0.7) % $ (4) (0.3) %
Other:
SG&A expenses $ 160.2 $ 153.2 $ 6.9 4.5 % $ (0.5) 4.8 %
SG&A as % gross profit 82.9 % 82.9 % - %
NM - Not Meaningful
U.K. Segment - Three Months Ended September 30, 2026 Compared to 2025
Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.344 at September 30, 2025, to £1 to $1.326 at September 30, 2026, or a decrease in the value of the GBP of 1.3%.
Revenues
Total revenues in the U.K. during the Current Quarter decreased $99.1 million, or 6.6%, as compared to the Prior Year Quarter, driven primarily by the impact of dealership dispositions.
Total same store revenues in the U.K. during the Current Quarter increased $23.2 million, or 1.7%, as compared to the Prior Year Quarter, driven by increases in new vehicle retail and parts and service revenues, partially offset by decreases in used vehicles and F&I, net revenues. On a constant currency basis, same store revenues increased 2.1%, reflecting growth in parts and service, F&I, net and new vehicle retail revenues, offset by a decline in used vehicle revenues.
New vehicle retail same store revenues increased 9.5% on a constant currency basis, as compared to the Prior Year Quarter, driven by an increase in retail units sold and higher pricing. New vehicle performance was solid, benefiting from a strong September plate change month and disciplined execution at the dealership level. The Current Quarter ended with a new vehicle inventory supply of 21 days, an increase of one day compared to the Prior Year Quarter.
Used vehicle retail same store revenues decreased 4.6% on a constant currency basis, as compared to the Prior Year Quarter, driven by a decrease in used vehicle units sold, partially offset by a constant currency increase in average selling price. These changes were the result of our efforts to improve used vehicle inventory acquisition discipline in advance of the September plate change month, which reduced used vehicles acquired but increased our average used vehicle selling price. The Current Quarter ended with a used vehicle inventory supply of 48 days, an increase of two days from the Prior Year Quarter. Used vehicle wholesale same store revenues decreased 15.0% on a constant currency basis, as compared to the Prior Year Quarter, primarily driven by a decrease in wholesale used vehicle units sold.
Parts and service same store revenues increased 6.7% on a constant currency basis, as compared to the Prior Year Quarter, driven by increases across all business lines, led by wholesale parts revenues. The increase was driven by investments in our U.K. customer contact center, which streamlined operations to make scheduling appointments easier for customers, generating increased customer pay activity as compared to the Prior Year Quarter.
F&I, net same store revenues increased 0.2% on a constant currency basis, as compared to the Prior Year Quarter, driven by higher new vehicle retail unit sales.
Gross Profit
Total gross profit in the U.K. during the Current Quarter decreased $7.6 million, or 3.7%, as compared to the Prior Year Quarter, driven primarily by the impact of dealership dispositions.
Total same store gross profit in the U.K. during the Current Quarter increased $8.4 million, or 4.5%, as compared to the Prior Year Quarter. On a constant currency basis, total same store gross profit increased 4.9%, driven by increases in new vehicle retail, used vehicle retail, parts and service and F&I, net gross profit, partially offset by a decline in used vehicle wholesale gross profit.
New vehicle retail same store gross profit increased 12.6% on a constant currency basis, as compared to the Prior Year Quarter, driven by an increase in retail units sold and a constant currency increase in gross profit per unit sold.
Used vehicle retail same store gross profit increased 8.0% on a constant currency basis as compared to the Prior Year Quarter, driven by an increase in constant currency gross profit per unit sold. This increase in gross profit was driven by our efforts to improve used vehicle inventory acquisition discipline in advance of the September plate change month. Used vehicle wholesale same store gross profit declined as compared to the Prior Year Quarter, reflecting widened losses per unit sold on lower average wholesale volumes.
Parts and service same store gross profit, on a constant currency basis, increased by 3.9% as compared to the Prior Year Quarter, driven by the increase in parts and service same store revenues, as discussed above.
F&I same store gross profit, on a constant currency basis, increased as compared to the Prior Year Quarter, as described above in F&I same store revenues.
Total same store gross margin in the U.K. increased 38 basis points, driven by improvements in new and used vehicle retail gross margin, offset by declines in our other lines of business.
SG&A Expenses
SG&A as a percentage of gross profit decreased by 62 and one basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.
Total SG&A expenses in the U.K. during the Current Quarter decreased $7.7 million, or 4.4%, as compared to the Prior Year Quarter. Total same store SG&A expenses in the U.K. during the Current Quarter increased $6.9 million, or 4.5%, as compared to the Prior Year Quarter. Total same store SG&A expenses increased 4.8% on a constant currency basis, as compared to the Prior Year Quarter, driven by higher facility, information technology and advertising costs.
Reported Operating Data - U.K.
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,908.2 $ 1,934.1 $ (26.0) (1.3) % $ 39.2 (3.4) %
Used vehicle retail sales 1,807.1 1,877.8 (70.7) (3.8) % 41.0 (5.9) %
Used vehicle wholesale sales 168.4 194.4 (26.0) (13.4) % 3.6 (15.2) %
Total used 1,975.4 2,072.2 (96.7) (4.7) % 44.5 (6.8) %
Parts and service sales 500.9 490.0 10.9 2.2 % 11.4 (0.1) %
F&I, net 116.1 118.3 (2.3) (1.9) % 2.5 (4.1) %
Total revenues $ 4,500.6 $ 4,614.6 $ (114.1) (2.5) % $ 97.7 (4.6) %
Gross profit:
New vehicle retail sales $ 154.5 $ 154.9 $ (0.4) (0.3) % $ 3.1 (2.2) %
Used vehicle retail sales 79.2 80.3 (1.1) (1.3) % 2.0 (3.8) %
Used vehicle wholesale sales (7.1) (4.4) (2.8) (62.9) % (0.1) (59.6) %
Total used 72.1 75.9 (3.8) (5.0) % 1.8 (7.4) %
Parts and service sales 287.2 279.6 7.5 2.7 % 6.3 0.4 %
F&I, net 116.1 118.3 (2.3) (1.9) % 2.5 (4.1) %
Total gross profit $ 629.8 $ 628.8 $ 1.1 0.2 % $ 13.7 (2.0) %
Gross margin:
New vehicle retail sales 8.1 % 8.0 % 0.1 %
Used vehicle retail sales 4.4 % 4.3 % 0.1 %
Used vehicle wholesale sales (4.2) % (2.3) % (2.0) %
Total used 3.7 % 3.7 % - %
Parts and service sales 57.3 % 57.1 % 0.3 %
Total gross margin 14.0 % 13.6 % 0.4 %
Units sold:
Retail new vehicles sold 48,502 48,647 (145) (0.3) %
Retail used vehicles sold 57,777 61,518 (3,741) (6.1) %
Wholesale used vehicles sold 17,389 19,540 (2,151) (11.0) %
Total used 75,166 81,058 (5,892) (7.3) %
Average sales price per unit sold:
New vehicle retail $ 48,995 $ 45,327 $ 3,669 8.1 % $ 1,010 5.9 %
Used vehicle retail $ 31,426 $ 30,582 $ 844 2.8 % $ 713 0.4 %
Gross profit per unit sold:
New vehicle retail sales $ 3,185 $ 3,184 $ 1 - % $ 63 (1.9) %
Used vehicle retail sales $ 1,372 $ 1,305 $ 66 5.1 % $ 34 2.5 %
Used vehicle wholesale sales $ (410) $ (224) $ (186) (83.0) % $ (8) (79.3) %
Total used $ 960 $ 937 $ 23 2.4 % $ 24 (0.2) %
F&I PRU $ 1,092 $ 1,074 $ 18 1.7 % $ 24 (0.5) %
Other:
SG&A expenses $ 527.6 $ 518.1 $ 9.5 1.8 % $ 12.1 (0.5) %
SG&A as % gross profit 83.8 % 82.4 % 1.4 %
Same Store Operating Data - U.K.
(In millions, except unit data)
Nine Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change Currency Impact on Current Period Results Constant Currency % Change
Revenues:
New vehicle retail sales $ 1,852.1 $ 1,771.0 $ 81.0 4.6 % $ 39.4 2.4 %
Used vehicle retail sales 1,775.1 1,727.3 47.8 2.8 % 41.0 0.4 %
Used vehicle wholesale sales 150.3 174.6 (24.3) (13.9) % 3.1 (15.7) %
Total used 1,925.4 1,901.9 23.6 1.2 % 44.0 (1.1) %
Parts and service sales 489.5 448.7 40.9 9.1 % 11.3 6.6 %
F&I, net 114.2 108.0 6.2 5.7 % 2.6 3.3 %
Total revenues $ 4,381.3 $ 4,229.6 $ 151.7 3.6 % $ 97.3 1.3 %
Gross profit:
New vehicle retail sales $ 151.2 $ 142.6 $ 8.6 6.0 % $ 3.1 3.9 %
Used vehicle retail sales 77.5 74.8 2.6 3.5 % 1.9 1.0 %
Used vehicle wholesale sales (6.1) (2.5) (3.7) (148.5) % (0.1) (144.3) %
Total used 71.4 72.4 (1.0) (1.4) % 1.8 (3.9) %
Parts and service sales 280.0 257.1 22.8 8.9 % 6.2 6.5 %
F&I, net 114.2 108.0 6.2 5.7 % 2.6 3.3 %
Total gross profit $ 616.8 $ 580.2 $ 36.6 6.3 % $ 13.6 4.0 %
Gross margin:
New vehicle retail sales 8.2 % 8.1 % 0.1 %
Used vehicle retail sales 4.4 % 4.3 % - %
Used vehicle wholesale sales (4.1) % (1.4) % (2.7) %
Total used 3.7 % 3.8 % (0.1) %
Parts and service sales 57.2 % 57.3 % (0.1) %
Total gross margin 14.1 % 13.7 % 0.4 %
Units sold:
Retail new vehicles sold 47,137 45,064 2,073 4.6 %
Retail used vehicles sold 56,658 56,956 (298) (0.5) %
Wholesale used vehicles sold 16,616 17,720 (1,104) (6.2) %
Total used 73,274 74,676 (1,402) (1.9) %
Average sales price per unit sold:
New vehicle retail $ 49,288 $ 45,076 $ 4,212 9.3 % $ 1,051 7.0 %
Used vehicle retail $ 31,483 $ 30,379 $ 1,104 3.6 % $ 728 1.2 %
Gross profit per unit sold:
New vehicle retail sales $ 3,209 $ 3,165 $ 43 1.4 % $ 65 (0.7) %
Used vehicle retail sales $ 1,367 $ 1,314 $ 54 4.1 % $ 33 1.6 %
Used vehicle wholesale sales $ (368) $ (139) $ (229) NM $ (6) NM
Total used $ 974 $ 969 $ 5 0.5 % $ 24 (2.0) %
F&I PRU $ 1,101 $ 1,059 $ 41 3.9 % $ 25 1.6 %
Other:
SG&A expenses $ 499.1 $ 468.7 $ 30.4 6.5 % $ 11.7 4.0 %
SG&A as % gross profit 80.9 % 80.8 % 0.1 %
NM - Not Meaningful
U.K. Segment - Nine Months Ended September 30, 2026 Compared to 2025
Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold as only the sales commission is reported within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold. The GBP to USD foreign currency exchange rate has fluctuated from £1 to $1.344 at September 30, 2025, to £1 to $1.326 at September 30, 2026, or a decrease in the value of the GBP of 1.3%.
Revenues
Total revenues in the U.K. during the Current Year decreased $114.1 million, or 2.5%, as compared to the Prior Year, driven by the net impact of dispositions, partially offset by higher same store revenues and favorable foreign currency translation.
Total same store revenues in the U.K. during the Current Year increased $151.7 million, or 3.6%, as compared to the Prior Year, driven by outperformances across nearly all lines of business, led by parts and service, F&I, net and new and used vehicle retail revenues, partially offset by a decline in used vehicle wholesale sales. On a constant currency basis, same store revenues increased 1.3%, reflecting growth in parts and service, F&I, net and new vehicle retail revenues, offset by a decline in used vehicle wholesale revenues.
New vehicle retail same store revenues increased 2.4% on a constant currency basis, as compared to the Prior Year, driven by increases in both unit sales and average selling prices. The Current Year ended with a U.K. new vehicle inventory supply of 21 days, an increase of one day compared to the Prior Year.
Used vehicle retail same store revenues increased 0.4% on a constant currency basis, as compared to the Prior Year, driven by an increase in average selling prices offset by a slight decrease in units sold. The Current Year ended with a U.K. used vehicle inventory supply of 48 days, an increase of two days compared to the Prior Year. Used vehicle wholesale same store revenues decreased 15.7% on a constant currency basis, as compared to the Prior Year, primarily driven by a decrease in wholesale used vehicle units sold, as well as a decline in average wholesale values.
Parts and service same store revenues increased 6.6% on a constant currency basis, as compared to the Prior Year, driven by increases across all business lines, led by wholesale parts revenues. The increase was driven by investments in our U.K. customer contact center, which streamlined operations to make scheduling appointments easier for customers. In addition, we expanded Saturday appointment availability and implemented more competitive service fee pricing to drive our customer pay business, which together contributed to an increase in customer service activity as compared to the Prior Year.
F&I, net same store revenues increased 3.3% on a constant currency basis, as compared to the Prior Year, driven by higher income per contract from our retail finance fees, improved penetration rates on vehicle service contracts and higher new vehicle retail unit sales.
Gross Profit
Total gross profit in the U.K. during the Current Year increased $1.1 million, or 0.2%, as compared to the Prior Year, driven by improved same store performance and favorable foreign currency translation, partially offset by the net impact of dispositions.
Total same store gross profit in the U.K. during the Current Year increased $36.6 million, or 6.3%, as compared to the Prior Year. On a constant currency basis, total same store gross profit increased 4.0%, driven by increases in parts and service, F&I and new and used vehicle retail gross profit, partially offset by a decline in used vehicle wholesale gross profit.
New vehicle retail same store gross profit increased 3.9% on a constant currency basis, as compared to the Prior Year, driven by an increase in retail units sold, partially offset by lower constant currency gross profit per unit sold.
Used vehicle retail same store gross profit increased 1.0% on a constant currency basis, as compared to the Prior Year, driven by an increase in gross profit per unit sold, partially offset by a decrease in retail units sold.
Parts and service same store gross profit increased 6.5% on a constant currency basis, as compared to the Prior Year, driven by the increase in parts and service same store revenues, as discussed above.
F&I same store gross profit increased on a constant currency basis, as compared to the Prior Year, as described above in F&I same store revenues.
Total same store gross margin in the U.K. increased 36 basis points, primarily driven by an improvement in new vehicle retail gross margin, partially offset by declines in used vehicle retail, used vehicle wholesale and parts and service gross margins.
SG&A Expenses
SG&A as a percentage of gross profit increased by 137 and 13 basis points on an as reported and same store basis, respectively, compared to the Prior Year.
Total SG&A expenses in the U.K. during the Current Year increased $9.5 million, or 1.8%, as compared to the Prior Year. Total same store SG&A expenses in the U.K. during the Current Year increased $30.4 million, or 6.5%, as compared to the Prior Year. Total same store SG&A expenses increased 4.0% on a constant currency basis, as compared to the Prior Year, driven by facility costs, information technology and employee-related costs. These increases were partially offset by lower professional service fees, as a result of our cost-cutting measures.
Consolidated Selected Comparisons - Three and Nine Months Ended September 30, 2026 Compared to 2025
The following table (in millions) and discussion of our results of operations are on a consolidated basis, unless otherwise noted.
Three Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change
Depreciation and amortization expense $ 31.2 $ 31.6 $ (0.4) (1.1) %
Asset impairments $ 7.0 $ 123.9 $ (116.9) (94.4) %
Restructuring charges $ 0.1 $ 1.6 $ (1.5) (96.7) %
Floorplan interest expense $ 21.0 $ 23.7 $ (2.7) (11.2) %
Other interest expense, net $ 48.1 $ 48.0 $ 0.2 0.3 %
Provision for income taxes $ 28.7 $ 23.0 $ 5.6 24.4 %
Nine Months Ended September 30,
2026 2025 Increase/ (Decrease) % Change
Depreciation and amortization expense $ 93.3 $ 89.6 $ 3.7 4.1 %
Asset impairments $ 10.5 $ 124.6 $ (114.1) (91.6) %
Restructuring charges $ 3.2 $ 20.3 $ (17.1) (84.3) %
Floorplan interest expense $ 66.3 $ 77.0 $ (10.7) (13.9) %
Other interest expense, net $ 143.6 $ 130.4 $ 13.2 10.1 %
Provision for income taxes $ 100.7 $ 106.8 $ (6.2) (5.8) %
Depreciation and Amortization Expense
Depreciation and amortization expense for the Current Quarter decreased compared to Prior Year Quarter, primarily driven by the disposition of dealerships and related real estate and the reclassification of certain real estate to assets held for sale. This decrease was partially offset by depreciation on property and equipment acquired in our U.S. and U.K. segments. For the Current Year, depreciation and amortization expense was higher compared to the Prior Year, primarily driven by acquired property and equipment in our U.S. and U.K. segments, as we continue to strategically add dealership related real estate and facilities to our investment portfolio and make improvements to our existing facilities intended to enhance the profitability of our dealerships and improve the overall customer experience.
Asset Impairments
Asset impairments totaled $7.0 million in the Current Quarter and $10.5 million in the Current Year, compared to $123.9 million in the Prior Year Quarter and $124.6 million in the Prior Year. During the Current Year, we recognized fixed asset impairment charges of $8.9 million in the U.S. segment and fixed asset impairment charges of $0.5 million and operating lease asset impairments of $1.1 million in the U.K. segment. During the Prior Year, we recognized goodwill, intangible franchise rights and fixed asset impairment charges of $93.0 million, $23.9 million and $7.7 million, respectively, primarily in the U.K. reporting unit.
Restructuring Charges
Total restructuring charges during the Current Quarter decreased $1.5 million or 96.7% as compared to the Prior Year Quarter. For the Current Year, restructuring charges decreased $17.1 million or 84.3% as compared to the Prior Year. The decrease in restructuring charges was primarily driven by the completion of the 2024 Restructuring Plan in the Prior Year and the near completion of the 2025 Restructuring Plan in the Current Year. Restructuring charges consist of planned workforce realignment, strategic closing of certain facilities and systems integrations, among other efforts to increase operational efficiency and profitability.
Refer to Note 4. Restructuring within our Notes to Condensed Consolidated Financial Statements for further discussion of our restructuring plan.
Floorplan Interest Expense
Our floorplan interest expense fluctuates with changes in our outstanding borrowings and associated interest rates, which are based on SOFR, the U.S. prime rate or other benchmark rates. Outstanding borrowings largely fluctuate based on our levels of new and used vehicle inventory. To mitigate the impact of interest rate fluctuations, we employ an interest rate hedging strategy, whereby we swap variable interest rate exposure on a portion of our borrowings for a fixed interest rate.
Total floorplan interest expense during the Current Quarter decreased $2.7 million, or 11.2%, as compared to the Prior Year Quarter. For the Current Year, floorplan interest expense decreased $10.7 million, or 13.9%, as compared to the Prior Year. The decrease in floorplan interest expense during the Current Quarter and Current Year was driven by lower new and used vehicle inventories and reduced floorplan interest rates, along with higher floorplan offset interest income. This is partially offset by a decrease in interest income from interest rate swaps due to a floorplan swap that expired during the Current Year.
Refer to Note 7. Financial Instruments and Fair Value Measurements within our Notes to Condensed Consolidated Financial Statements for additional discussion of interest rate swaps.
Other Interest Expense, Net
Other interest expense, net consists of interest charges primarily on our 4.00% Senior Notes, 6.375% Senior Notes, 6.250% Senior Notes, 6.625% Senior Notes, real estate related debt and other debt, partially offset by interest income.
Other interest expense, net during the Current Quarter, increased $0.2 million, or 0.3%, as compared to the Prior Year Quarter. For the Current Year, other interest expense, net, increased $13.2 million, or 10.1%, as compared to the Prior Year. The increase in other interest expense, net during the Current Quarter and Current Year was primarily attributable to interest expense associated with the Acquisition Line as well as interest expense associated with the issuance of the 6.250% Senior Notes and 6.625% Senior Notes during the Current Quarter, partially offset by a decrease in interest expense associated with other debt and real estate. The increase in interest expense was also driven by a decrease in interest income from interest rate swaps due to certain mortgage swaps that expired during the Current Year. Refer to Note 9. Debt within our Notes to Condensed Consolidated Financial Statements for additional discussion of our debt.
Provision for Income Taxes
Provision for income taxes of $28.7 million during the Current Quarter increased by $5.6 million, or 24.4%, as compared to the Prior Year Quarter. For the Current Year, our provision for income taxes of $100.7 million decreased by $6.2 million, or 5.8%, as compared to the Prior Year. The increase in income tax expense in the Current Quarter as compared to the Prior Year Quarter was primarily due to higher pre-tax income in the Current Quarter. The decrease in tax expense in the Current Year as compared to the Prior Year was primarily due to tax benefits realized on dispositions in the Current Year. Our Current Quarter and Current Year effective tax rates of 21.8% and 23.1%, respectively, were lower than our Prior Year Quarter's and Prior Year's effective tax rates of 63.7% and 27.6%, primarily due to the book impairment of U.K. goodwill in the Prior Year Quarter and the Prior Year that was not deductible for tax purposes.
We consider it more-likely-than-not that our deferred tax assets, net of valuation allowances provided, will be realized, based primarily on assumptions of our future taxable income, considering future reversals of existing taxable temporary differences.
Liquidity and Capital Resources
Our liquidity and capital resources are primarily derived from cash on hand, cash temporarily invested as a pay down of our U.S. Floorplan Line, FMCC Facility and GM Financial Facility levels (refer to Note 10. Floorplan Notes Payable within our Notes to Condensed Consolidated Financial Statements for additional information), cash from operations, borrowings under our credit facilities, working capital, dealership and real estate acquisition financing and proceeds from debt and equity offerings. We anticipate we will generate sufficient cash flows from operations, coupled with cash on hand and available borrowing capacity under our credit facilities, to fund our working capital requirements, service our debt and meet any other recurring operating expenditures.
Available Liquidity Resources
We had the following sources of liquidity available (in millions):
September 30, 2026
Cash and cash equivalents $ 881.5
Floorplan offset accounts 153.0
Available capacity under Acquisition Line 1,442.4
Total liquidity $ 2,477.0
Cash Flows
We arrange our new and used vehicle inventory floorplan financing through lenders affiliated with our vehicle manufacturers and our Revolving Credit Facility. In accordance with U.S. GAAP, we report floorplan financed with lenders affiliated with our vehicle manufacturers (excluding the cash flows from or to manufacturer-affiliated lenders participating in our syndicated lending group) within Cash Flows from Operating Activities in the Condensed Consolidated Statements of Cash Flows. We report floorplan financed with the Revolving Credit Facility (including the cash flows from or to manufacturer-affiliated lenders participating in the facility) and other credit facilities in the U.K. unaffiliated with our manufacturer partners, within Cash Flows from Financing Activities in the Condensed Consolidated Statements of Cash Flows. Refer to Note 10. Floorplan Notes Payable within our Notes to Condensed Consolidated Financial Statements for additional discussion of our Revolving Credit Facility.
However, we consider all floorplan financing of inventory purchases in the normal course of business should correspond with the related inventory activity and be classified as an operating activity. As a result, we use the non-GAAP measure "Adjusted net cash provided by/used in operating activities" and "Adjusted net cash provided by/used in financing activities" to further evaluate our cash flows. We consider this classification eliminates excess volatility in our operating cash flows prepared in accordance with U.S. GAAP. In addition, floorplan financing associated with dealership acquisitions and dispositions is classified as investing activities on an adjusted basis to eliminate excess volatility in our operating cash flows prepared in accordance with U.S. GAAP.
The following table reconciles cash flows on a U.S. GAAP basis to the corresponding adjusted amounts (in millions):
Nine Months Ended September 30,
2026 2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities: $ 342.0 $ 565.3
Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset and net acquisitions and dispositions 2.8 (63.4)
Change in Floorplan notes payable - manufacturer affiliates associated with net acquisitions and dispositions and floorplan offset activity 5.6 (2.0)
Adjusted net cash provided by operating activities $ 350.4 $ 500.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities: $ 83.3 $ (659.1)
Change in cash paid for acquisitions, associated with Floorplan notes payable 11.3 51.2
Change in proceeds from disposition of franchises, property and equipment, associated with Floorplan notes payable (94.9) (18.2)
Adjusted net cash used in investing activities $ (0.3) $ (626.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activities: $ 424.3 $ 84.5
Change in Floorplan notes payable, excluding floorplan offset 75.3 32.3
Adjusted net cash provided by financing activities $ 499.6 $ 116.7
Sources and Uses of Liquidity from Operating Activities - Nine Months Ended September 30, 2026 Compared to 2025
For the Current Year, net cash provided by operating activities decreased by $223.4 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by operating activities decreased by $149.7 million. The decrease on an adjusted basis was primarily driven by a $120.8 million decrease in accounts payable and accrued expenses, a $118.6 million decrease in non-cash asset impairment charges and a $33.0 million increase in non-cash gains from the disposition of assets. This was partially offset by a $54.8 million increase in net income, $29.7 million decrease in inventories and a $21.1 million decrease in prepaid expenses and other assets.
Sources and Uses of Liquidity from Investing Activities - Nine Months Ended September 30, 2026 Compared to 2025
For the Current Year, net cash provided by investing activities increased by $742.5 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash used in investing activities decreased by $625.8 million, primarily due to a $323.6 million increase in proceeds from the disposition of franchises and property and equipment, as well as a $286.8 million decrease in acquisition activity and $25.0 million decrease in purchases of property and equipment.
Capital Expenditures
Our capital expenditures include costs to extend the useful lives of current dealership facilities, as well as to start or expand operations. In general, expenditures relating to the construction or expansion of dealership facilities are driven by dealership acquisition activity, new franchises being granted to us by a manufacturer, significant growth in sales at an existing facility, relocation opportunities or manufacturer imaging programs. We critically evaluate all planned future capital spending, working closely with our manufacturer partners to maximize the return on our investments.
For the Current Year, $167.1 million was used to purchase property and equipment.
Sources and Uses of Liquidity from Financing Activities - Nine Months Ended September 30, 2026 Compared to 2025
For the Current Year, net cash provided by financing activities increased by $339.9 million, as compared to the Prior Year. On an adjusted basis for the same period, adjusted net cash provided by financing activities increased by $382.8 million. The increase on an adjusted basis was primarily driven by the issuance of $1.3 billion of 6.250% Senior Notes and 6.625% Senior Notes, an increase in net borrowings on our U.S. Floorplan Line of $466.0 million (representing the net cash activity in our floorplan offset account), a $177.3 million decrease in repurchases of common stock and a $78.4 million increase in net borrowings of other debt. This increase was partially offset by an increase in net repayments on the Acquisition Line of $1.6 billion.
Credit Facilities, Debt Instruments and Other Financing Arrangements
Our various credit facilities, debt instruments and other financing arrangements are used to finance the purchase of inventory and real estate, provide acquisition funding and provide working capital for general corporate purposes.
The following table summarizes the commitment of our credit facilities as of September 30, 2026 (in millions):
Total
Commitment 		Outstanding Available
U.S. Floorplan Line (1)
$ 1,750.0 $ 1,122.1 $ 627.9
Acquisition Line (2)
1,750.0 12.3 1,442.4
Total revolving credit facility 3,500.0 1,134.4 2,070.3
FMCC Facility (3)
200.0 161.7 38.3
GM Financial Facility (4)
376.7 209.1 167.6
Total U.S. credit facilities (5)
$ 4,076.7 $ 1,505.2 $ 2,276.2
(1) The available balance at September 30, 2026, includes $153.0 million of immediately available funds. The remaining available balance can be used for vehicle inventory financing.
(2) The outstanding balance of $12.3 million is related to outstanding letters of credit of $12.3 million. The available borrowings may be limited from time to time, based on certain debt covenant calculations, and as a result, the outstanding balance plus available borrowings may not equal the total commitment.
(3) The available balance at September 30, 2026, includes no immediately available funds. The remaining available balance can be used for Ford new vehicle inventory financing.
(4) The available balance at September 30, 2026, includes no immediately available funds. The remaining available balance can be used for General Motors new and loaner vehicle inventory financing.
(5) The outstanding balance excludes $630.9 million of borrowings with manufacturer-affiliates and third-party financial institutions for foreign and loaner vehicle financing not associated with any of our U.S. credit facilities.
We have other credit facilities in the U.S. and the U.K. with third-party financial institutions, most of which are affiliated with the automobile manufacturers that provide financing for portions of our new, used and rental vehicle inventories. In addition, we have outstanding debt instruments, including our 4.00% Senior Notes, 6.375% Senior Notes, 6.250% Senior Notes and 6.625% Senior Notes, as well as real estate related and other debt instruments. Refer to Note 9. Debt within our Notes to Condensed Consolidated Financial Statements for further information.
Covenants
Our Revolving Credit Facility, indentures governing our 4.00% Senior Notes, 6.375% Senior Notes, 6.250% Senior Notes and 6.625% Senior Notes and certain mortgage term loans contain customary financial and operating covenants that place restrictions on us, including our ability to incur additional indebtedness, create liens or to sell or otherwise dispose of assets and merge or consolidate with other entities. Certain of our mortgage agreements contain cross-default provisions that, in the event of a default of certain mortgage agreements and of our Revolving Credit Facility, could trigger an uncured default.
As of September 30, 2026, we were in compliance with the requirements of the financial covenants under our debt agreements. We are required to maintain the ratios detailed in the following table:
As of September 30, 2026
Required Actual
Total adjusted leverage ratio < 5.75 3.26
Fixed charge coverage ratio > 1.20 2.78
Based on our position as of September 30, 2026, and our outlook as discussed within Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, we consider our liquidity to be sufficient and do not anticipate any material liquidity constraints or issues with our ability to remain in compliance with our debt covenants.
Refer to Note 9. Debt and Note 10. Floorplan Notes Payable within our Notes to Condensed Consolidated Financial Statements for further discussion of our debt instruments, credit facilities and other financing arrangements existing as of September 30, 2026.
Share Repurchases and Dividends
From time to time, our Board of Directors authorizes the repurchase of shares of our common stock up to a certain monetary limit and at a prescribed cost limit per share. On November 11, 2025, our Board of Directors increased the share repurchase authorization to $500.0 million. For the Current Year, 205,190 shares were repurchased, at an average price of $353.08 per share, for a total of $72.4 million, excluding excise taxes of $0.5 million. As of September 30, 2026, we had $306.3 million available under our current share repurchase authorization.
During the three months ended March 31, 2026, our Board of Directors approved an increase in the 2026 annual dividend rate to $2.20 per share, which represents an increase of 10%, or $0.20, as compared to the 2025 annual dividend rate of $2.00 per share. Consistent with this increase, a quarterly cash dividend of $0.55 per share on all shares of our common stock was approved, which resulted in $19.5 million paid to common stockholders and $0.2 million to unvested restricted stock award holders.
Future share repurchases and the payment of any future dividends are subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, covenant compliance, changes in laws and regulations, current economic environment and other factors considered relevant.
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