LITHIA MOTORS INC
For the period ended Mar 31, 2026. Filed Apr 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 29, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-24.
0001023128-25-000125
Item 2. Management’s Discussion and Analysis of Financial Condition andCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-29.
0001023128-26-000036
Item 2. Management’s Discussion and Analysis of Financial Condition andThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 458 previous paragraphs and 391 current paragraphs.
259 unchanged; 99 reworded; 31 added; 82 removed; 18 previous and 2 current paragraphs rearranged.
Tables are not compared: 55 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
network through acquisitions. We also provided shareholder return in the form of$12.8 million in dividends and
Current report
primarily as a result of our increase in SG&A as a percentage of gross profit and equity method investment losses.
Current report
New Vehicles
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decreased 7.1% due toa decrease in unit volume of 7.1% anda decrease in average selling prices of 1.0%.
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margins of 50 bps. Total same store new vehicle gross profit per unit, which includes the finance and insurance
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Used vehicle retail revenue for thethree months ended March 31, 2026 increased 7.3% compared to the same
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increased $1 to$1,813.
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Our aftersales revenue increased 6.1% in thethree months ended March 31, 2026 compared to the same period of
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increased 3.8%, driven byan increase in customer pay revenues of 4.8% andan increase inwarranty revenues of
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4.0% compared to the prior year.
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year reflected lower net charge-offs, attributable to the increased credit quality of the portfolio and improved
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economies of scale.
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SG&A as a percentage of gross profit was 73.0% for thethree months ended March 31, 2026 compared to 67.5%
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for the same period of 2025, driven by increases in all expense categories outpacing the increase in gross profit.
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Total SG&A expense increased 8.9%, driven by increases in personnel and other costs as a result of our acquisition
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activity.
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Adjusted SG&A for thethree months ended March 31, 2026 excludes$20.3 million in one-time contract buyouts and
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Floor Plan Interest Expense
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Floor plan interest expense decreased $1.2 million in thethree months ended March 31, 2026 compared to the
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1 See Non-GAAP Reconciliations for more details.
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Operating margin decreased 80 bps in thethree months ended March 31, 2026 compared to the same period in
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Group PLC.
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1 See Non-GAAP Reconciliations for more details.
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affected by the geographic mix of earnings during the period and a decrease in general business credits. Excluding
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Cash provided by operating activities for thethree months ended March 31, 2026 decreased $430.5 million
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payable, partially offset by changes intrade payables, unrealized investment loss, andtrade receivables compared
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below:
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(1) Includes the impact of converting inventory‑secured revolvers to floorplan facilities during the quarter, increasing net floorplan
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borrowings and adjusted operating cash flows $1,138.3 million.
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ended March 31, 2026 and 2025.
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(5)Non-GAAP financial measure.
Removed paragraphs (82)
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of inventory
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increase in total gross profit and financing operations, while remaining diligentin managing SG&A costs, reducing
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our total SG&A as a % of gross profit.
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new and used retail.
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new and used retail.
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New Retail Vehicles
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margins of 90 bps. Total same store new vehicle gross profit per unit, which includes the finance and insurance
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New vehicle retail revenue for thenine months ended September 30, 2025 increased 5.1% compared to the same
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vehicle retail revenue increased 4.4% due toan increase in unit volume of 2.6% andan increase in average selling
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prices of 1.7%.
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gross profit margins of 90 bps. Total same store new vehicle retail gross profit per unit, which includes the finance
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and insurance revenue generated from the sales of new retail vehicles, decreased $324 to$5,122.
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Used vehicle revenue for the three months ended September 30, 2025 increased 8.9% compared to the same
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used vehicle revenue increased 11.8% due toan increase in unit volume of 6.3% andan increase in average selling
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prices of 5.1%.
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from the sales of retail used vehicles, decreased $22 to$3,435.
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Used vehicle retail revenue for thenine months ended September 30, 2025 increased 5.6% compared to the same
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used vehicle retail sales increased 5.7% due toan increase in unit volume of 3.2% andan increase in average
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retail unit increased $20 to$1,847.
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Total finance and insurance income increased 5.2% in thenine months ended September 30, 2025 compared to the
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increased $26 to$1,857.
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Our aftersales revenue increased 2.4% in the three months ended September 30, 2025 compared to the same
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We focus on retaining customers by offering competitively-priced routine maintenance and through our marketing
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56.7% of the total.
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customer pay and warranty transactions. Overall same store aftersales gross margins increased 280 bps, primarily
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as a result ofincreased customer pay gross margin of 240 bps andincreased warranty gross margin of 120 bps.
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Our aftersales revenue increased 5.7% in thenine months ended September 30, 2025 compared to the same
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period of 2024, driven by same store performance and supported by acquisition activity. Same store warranty
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revenues saw a 15.7% increase compared to the prior year.
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decreased cost of funds, which collectively expanded total interest margin to 4.6%.
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Loan originations increased in the three months ended September 30, 2025 compared to the same period of 2024,
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and our penetration rate increased due to increased engagement with our stores. The weighted average contract
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rate of loans originated in the three months ended September 30, 2025 decreased to 8.6%, compared with 9.8% in
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the same period of 2024, primarily due to our maintaining competitive pricing following Federal Reserve rate cuts.
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The decrease in annualized net charge-offs of past due accounts as a percentage of ending managed receivables
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compared to the prior year reflects the increased credit quality of the portfolio as well as improved execution of our
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collateral management team.
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to the prior year reflected the increased credit quality of the portfolio as well as a decrease in the percentage of
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SG&A as a percentage of gross profit was 68.1% for the three months ended September 30, 2025 compared to
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66.0% for the same period of 2024. SG&A expense increased 5.8%, driven by increases in all areas due to
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Reworded paragraphs (99)
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•Future market conditions, including anticipated car and other sales levels and gross profit levels and the supply
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•Future market conditions, including anticipated vehicle and other sales, gross profit and inventory supply
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however consumers desire. As of September 30, 2025, we operated 447 locations representing 52 brands in the
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however consumers desire. As of March 31, 2026, we operated 465 locations representing 57 brands in the United
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United States, the United Kingdom, and Canada.
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States, the United Kingdom, and Canada.
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LAD builds magnetic customer loyalty across our 447 stores, our Driveway and GreenCars e-commerce platforms,
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LAD builds magnetic customer loyalty across our 465 stores, our Driveway and GreenCars e-commerce platforms,
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current valuation trends in acquisitions relative to stock price performance. During the first nine months of 2025, we
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current valuation trends in acquisitions relative to stock price performance. During the first three months of 2026, we
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utilized$257.7 million for capital expenditures investing in our existing business, paid$42.1 million in dividends, and
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utilized$97.1 million for capital expenditures investing in our existing business and$145.3 million expanding our
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$662.3 million in share repurchases. As of September 30, 2025, we had available liquidity of approximately$1.9
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$297.0 million in share repurchases. As of March 31, 2026, we had available liquidity of approximately$1.4 billion,
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billion, which was comprised of$206.5 million in unrestricted cash,$54.9 million in marketable securities, and$1.6
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which was comprised of$160.8 million in unrestricted cash,$55.9 million in marketable securities, and$1.2 billion
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billion availability on our credit facilities.
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availability on our credit facilities.
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We experienced growth of revenue in 2025 compared to 2024, primarily driven by increases in volume related to
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We experienced growth of revenue in 2026 compared to 2025, primarily driven byincreases in used vehicle and
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acquisitions. Total gross profit grew in 2025 compared to 2024, primarily driven by acquisition growth and supported
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aftersales volume related to acquisitions. Total gross profit grew in 2026 compared to 2025, primarily driven by
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by same store increases in aftersales and F&I. New vehicle retail gross profit decreased compared to 2024 due to
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acquisition growth and supported by same store increases in aftersales. New vehicle gross profit decreased
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continued normalization of margins. Net income grew in 2025 compared to 2024, primarily as a result of our
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compared to 2025 due to continued normalization of margins. Net income declined in 2026 compared to 2025,
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1 Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for
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1 Includes the sales and gross profit related to new, used, and finance and insurance and unit sales for new and used retail.
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months when operations occurred in both periods. For example, a store acquired in August 2024 would be included
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months when operations occurred in both periods. For example, a store acquired in February 2025 would be
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in same store operating data beginning in September 2025, after its first complete comparable month of operation.
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included in same store operating data beginning in March 2026, after its first complete comparable month of
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Thethird quarter operating results for the same store comparisons would include results for that store in only the
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operation. Thefirst quarter operating results for the same store comparisons would include results for that store in
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month of September for both comparable periods.
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only the month of March for both comparable periods.
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1 Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for
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1 Includes the sales and gross profit related to new, used, and finance and insurance and unit sales for new and used retail.
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We believe that our new vehicle retail sales create incremental profit opportunities through certain manufacturer
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We believe that our new vehicle sales create incremental profit opportunities through certain manufacturer incentive
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incentive programs, arranging of third-party financing, vehicle service and insurance contracts, future resale of used
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programs, arranging of third-party financing, vehicle service and insurance contracts, future resale of used vehicles
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vehicles acquired through trade-in, and aftersales. Our leaders in each market continue to adapt to changing
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acquired through trade-in, and aftersales. Our leaders in each market continue to adapt to changing conditions,
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conditions, respond to customer needs and manage inventory availability and selection.
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respond to customer needs and manage inventory availability and selection.
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New vehicle revenue for the three months ended September 30, 2025 increased 4.5% compared to the same
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New vehicle revenue for thethree months ended March 31, 2026 decreased 4.4% compared to the same period of
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period of 2024, primarily due to same store performance and supported by acquisition activity. Same store new
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2025, primarily due to same store performance, offset by acquisition activity. Same store new vehicle revenue
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Same store new vehicle gross profit per unit decreased 10.8%, driven bya decrease in new vehicle gross profit
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Same store new vehicle gross profit per unit decreased 7.7%, driven bya decrease in new vehicle gross profit
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revenue generated from the sales of new vehicles, decreased $372 to$4,916.
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revenue generated from the sales of new vehicles, decreased $139 to$4,866.
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period of 2024 driven by same store performance and supported by acquisition activity. On a same store basis,
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period of 2025 driven by same store performanceand supported by acquisition activity. On a same store basis,
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revenue increased 5.5% due toan increase in average selling prices of 3.0% andan increase in unit volume of
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used vehicle retail sales increased 4.6% due toan increase in average selling prices of 4.2% andan increase in unit
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selling prices of 2.4%. Total same store used vehicle retail gross profit per unit, which includes the finance and
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volume of 0.6%. Total same store used vehicle retail gross profit per unit, which includes the finance and insurance
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insurance revenue generated from the sales of used retail vehicles, increased $6 to$3,483.
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revenue generated from the sales of used retail vehicles, decreased $134 to$3,279.
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Total finance and insurance income increased 5.0% in the three months ended September 30, 2025 compared to
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Total finance and insurance income decreased 1.3% in thethree months ended March 31, 2026 compared to the
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same period of 2024, driven by same store performance and supported by acquisition activity. Same store finance
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same period of 2025, driven by same store performance, offset by acquisition activity. Same store finance and
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and insurance revenues increased 4.4%. On a same store basis, our finance and insurance revenue per retail unit
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insurance revenues decreased 3.7%. On a same store basis, our finance and insurance revenue per retail unit
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efforts. Customer pay revenue accounted for the largest share of our same-store aftersales revenue, representing
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2025, driven by same store performance and supported by acquisition activity. Same store aftersales revenue
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Same store aftersales gross profit increased 9.1%. This increase was primarily due to increased volumes of
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Same store aftersales gross profit increased 5.7%. This increase was primarily due to increased volume of
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warranty transactions. Overall same store aftersales gross margins increased 250 bps, primarily as a result of
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customer pay transactions. Overall same store aftersales gross margins increased 100 bps, primarily as a result of
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increased customer pay margins of 290 bps andincreased warranty gross margins of 120 bps.
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increased customer pay margins of 120 bps andincreased warranty gross margins of 50 bps.
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Financing Operations income reflects the interest and fee income generated by the portfolio of auto loan and
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Financing Operations income reflects theinterest and fee income generated by the portfolio of auto loan and
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Financing operations recorded higher income in thenine months ended September 30, 2025 compared to the same
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Financing operations recorded higher income in thethree months ended March 31, 2026 compared to the same
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to the same period of 2025.
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the authorizations do not have expiration dates.
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period of 2024, driven by same store performance and supported by acquisition activity. Same store new vehicle
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Same store new vehicle retail gross profit per unit decreased 10.2%, driven bya decrease in new vehicle retail
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Total same store used vehicle gross profit per unit, which includes the finance and insurance revenue generated
Previous report — wording carried elsewhere
period of 2024 driven by same store performance and supported by acquisition activity. On a same store basis,
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the same period of 2024, driven by same store performance and supported by acquisition activity. Same store
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finance and insurance revenues increased 5.7%. On a same store basis, our finance and insurance revenue per
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period of 2024, driven by same store performance and supported by acquisition activity.
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Same store aftersales gross profit increased 9.5%. This increase was primarily due to increased volumes of
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Financing operations recorded higher income in the three months ended September 30, 2025 compared to the
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same period of 2024, primarily due to the increased interest income resulting from the growth of the portfolio and a
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compared to 65.1% for the same period of 2024. Theincrease was primarily related to SG&A growth outpacing
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gross profit growth in the period.
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On a same store basis and excluding non-core charges, SG&A as a percentage of gross profit was 67.2%
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the same period of 2024 due to a decrease in interest rates and average new inventory levels.
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offset by increased SG&A of 3.9%.
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borrowings on our warehouse facilities compared to the same period of 2024, and our September 2025 issuance of
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period of 2024, primarily as a result of fair market value changes in our investment in Pinewood Technologies Group
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our annual effective income tax rate to be 25.1%.