GROUP 1 AUTOMOTIVE INC

Previous wording

We are a leading operator in the automotive retail industry. Through our omni-channel platform, we sell 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. We operate in geographically diverse markets that extend across 17 states in the U.S. and 34 towns and cities in the U.K. As of June 30, 2024, our retail network consisted of 147 dealerships in the U.S. and 55 dealerships in the U.K.

Current wording

We are a leading operator in the automotive retail industry. Through our omni-channel platform, we sell 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. We operate in geographically diverse markets that extend across 17 states in the U.S. and 73 towns and cities in the U.K. As of September 30, 2024, our retail network consisted of 146 dealerships in the U.S. and 113 dealerships in the U.K.

Previous wording

On March 20, 2024, the Environmental Protection Agency (“EPA”) finalized new emissions standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond. The final rule sets new, strict standards intended to reduce air pollutant emissions, including greenhouse gas emissions. The EPA projects the final rule will accelerate the transition to, and availability of, clean vehicle technologies, including hybrid electric vehicles and plug-in hybrid electric vehicles. Although the future impact of these regulations on our operations cannot be predicted with certainty, the regulations may have a significant impact on the future mix and demand for vehicles provided by our manufacturers. We will continue to monitor the impact of the final regulations on our manufacturers and dealership operations.

Current wording

On March 20, 2024, the Environmental Protection Agency (“EPA”) finalized new emissions standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond. The final rule sets new, strict standards intended to reduce air pollutant emissions, including greenhouse gas emissions; however, the new standards are now subject to legal challenge. The EPA projects the final rule will accelerate the transition to, and availability of, clean vehicle technologies, including hybrid electric vehicles and plug-in hybrid electric vehicles. Although the future impact of these regulations on our operations cannot be predicted with certainty, the regulations may have a significant impact on the future mix and demand for vehicles provided by our manufacturers. We will continue to monitor the impact of the final regulations on our manufacturers and dealership operations.

Previous wording

The global economy continues to experience inflation. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (the “Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023 and during the six months ended June 30, 2024 (“Current Year”). Continued inflation reducing the disposable income of our customers, volatility in new vehicle availability and higher interest rates increasing the monthly cost of financing vehicles, contributed to used vehicle prices continuing to decline during the three months ended June 30, 2024 (“Current Quarter”). During the Current Quarter, the Federal Reserve decided to keep the current interest rates unchanged.

Current wording

The global economy experienced elevated levels of inflation beginning in 2022. In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S. Federal Reserve (the “Federal Reserve”), along with other central banks, including in the U.K., maintained interest rates at elevated levels throughout 2023. In 2024, inflation began to return to historical norms. As a result, during the three months ended September 30, 2024 (“Current Quarter”), the Federal Reserve and the Bank of England lowered their interest rates by 50 and 25 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment.

Previous wording

Total revenues in the U.S. during the Current Quarter increased $121.6 million, or 3.2%, as compared to the three months ended June 30, 2023 (“Prior Year Quarter”), driven by the acquisition of stores, partially offset by lower same store revenues.

Current wording

Total revenues in the U.S. during the Current Quarter increased $71.5 million, or 1.8%, as compared to the Prior Year Quarter, driven by the acquisition of stores, partially offset by slightly lower same store revenues.

Previous wording

Total same store revenues in the U.S. during the Current Quarter decreased $66.2 million, or 1.8%, as compared to the Prior Year Quarter. This decrease was driven by lower revenues from new vehicle retail, used vehicle retail and wholesale, and parts and service, partially offset by higher F&I. The CDK Incident contributed to lower same store sales during the limited period of the CDK outage.

Current wording

Total same store revenues in the U.S. during the Current Quarter decreased $70.6 million, or 1.9%, as compared to the Prior Year Quarter. This decrease was driven by lower revenues from used vehicle retail, new vehicle retail and F&I, partially offset by higher parts and service revenues.

Previous wording

New vehicle retail same store revenues underperformed the Prior Year Quarter, driven by lower pricing, coupled with less units sold. Manufacturer vehicle deliveries increased in the Current Quarter and as a result, our inventory levels were higher than the Prior Year Quarter. Higher new vehicle supply compared to the Prior Year Quarter created downward pressure on pricing and margins. We ended the Current Quarter with a U.S. new vehicle inventory supply of 62 days, 35 days higher than the Prior Year Quarter.

Current wording

New vehicle retail same store revenues slightly underperformed the Prior Year Quarter, driven by lower pricing, partially offset by more units sold. Manufacturer vehicle deliveries increased in the Current Quarter and as a result, our inventory levels were higher than the Prior Year Quarter, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year Quarter created downward pressure on pricing and margins. We ended the Current Quarter with a U.S. new vehicle inventory supply of 56 days, 26 days higher than the Prior Year Quarter.

Previous wording

Used vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset bylower pricing. Improved new vehicle supply, impacts from inflation reducing the disposable income of our customers and higher interest rates increasing the monthly cost of financing vehicles continued to create downward pricing pressure.

Current wording

Used vehicle retail same store revenues underperformed the Prior Year Quarter, primarily driven by fewer units sold, coupled with lower used vehicle retail pricing. Used vehicle supply improved as a result of higher new vehicle supply. However, lingering impacts from above-historical average inflation over the past two years reducing the disposable income of our customers and higher interest rates compared to historical averages increasing the monthly cost of financing vehicles, continued to create downward pressure on pricing and demand.

Previous wording

F&I same store revenues outperformed the Prior Year Quarter, primarily driven by higher same store used vehicle units sold, coupled with higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Quarter, leading to the improved new vehicle F&I penetration.

Current wording

F&I same store revenues slightly underperformed the Prior Year Quarter, primarily driven by fewer same store used vehicle units sold, partially offset by higher same store F&I gross profit per unit sold. Penetration rates for vehicle service contracts, new vehicle finance and other F&I products improved, contributing to the higher same store F&I gross profit per unit sold. OEM incentives have increased in the Current Quarter, leading to the improved new vehicle F&I penetration.

Previous wording

Total gross profit in the U.S. during the Current Quarter decreased $1.9 million, or 0.3%, as compared to the Prior Year Quarter, driven by lower same store gross profit, partially offset by the acquisition of stores.

Current wording

Total gross profit in the U.S. during the Current Quarter decreased $4.6 million, or 0.7%, as compared to the Prior Year Quarter, driven by lower same store gross profit, partially offset by the acquisition of stores.

Previous wording

New vehicle retail 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. The decrease in same store gross profit per unit is due to higher deliveries from our OEMs and increasing inventory levels of new vehicles as described above.

Current wording

New vehicle retail same store gross profit underperformed the Prior Year Quarter, driven by a decrease in same store gross profit per unit sold, partially offset by a slight increase in same store units sold. The decrease in same store gross profit per unit is due to higher deliveries from our OEMs and increasing inventory levels of new vehicles as described above.

Previous wording

Used vehicle retail same store gross profit outperformed the Prior Year Quarter, primarily driven by higher same store units sold. Our used vehicle wholesale same store gross profit underperformed the Prior Year Quarter, driven by a decrease in same store gross profit per unit sold, partially offset by an increase in same store units sold.

Current wording

Used vehicle retail same store gross profit underperformed the Prior Year Quarter, primarily driven by a decrease in same store gross profit per unit sold, coupled with fewer same store units sold, as described above for used vehicle retail same store revenues. Our used vehicle wholesale same store gross profit outperformed the Prior Year Quarter, driven by an increase in same store gross profit per unit sold, coupled with an increase in same store units sold.

Previous wording

F&I same store gross profit, outperformed the Prior Year, as described above for F&I same store revenues.

Current wording

F&I same store gross profit, slightly underperformed the Prior Year Quarter, as described above for F&I same store revenues.

Previous wording

Total same store gross margin in the U.S. decreased 55 basis points, primarily driven by an underperformance in new vehicle retail for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by a slight improvement in parts and service gross margin due to the change in mix of business activities as described above in parts and service same store revenues.

Current wording

Total same store gross margin in the U.S. decreased 39 basis points, primarily driven by an underperformance in new vehicle retail for the reasons described above for same store gross profit for new vehicle retail. This underperformance was partially offset by an outperformance in used vehicle wholesale as described above in same store used vehicle gross profit.

Previous wording

SG&A as a percentage of gross profit increased 226 basis points and increased 524 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.

Current wording

SG&A as a percentage of gross profit increased 455 basis points and increased 387 basis points on an as reported and same store basis, respectively, compared to the Prior Year Quarter.

Previous wording

Total revenues in the U.S. during the Current Year increased $424.9 million, or 5.9%, as compared to the same period in 2023 (“Prior Year”), driven by the acquisition of stores and higher same store revenues.

Current wording

Total revenues in the U.S. during the nine months ended September 30, 2024 (“Current Year”) increased $496.4 million, or 4.5%, as compared to the same period in 2023 (“Prior Year”), driven by the acquisition of stores.

Previous wording

Total same store revenues in the U.S. during the Current Year increased $78.8 million, or 1.2%, as compared to the Prior Year. This increase was driven by higher revenues from new vehicle retail, used vehicle retail, parts and service and F&I. The CDK Incident contributed to lower same store sales during the limited period of the CDK outage.

Current wording

Total same store revenues in the U.S. during the Current Year increased $8.2 million, or 0.1%, as compared to the Prior Year. This increase was driven by higher revenues from new vehicle retail, parts and service and F&I, largely offset by lower used vehicle revenues.

Previous wording

New vehicle retail same store revenues outperformed the Prior Year, driven by more units sold, partially offset by lower pricing. Manufacturer vehicle deliveries were increased in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year created downward pressure on pricing and margins. We ended the Current Year with a U.S. new vehicle inventory supply of 62 days, 35 days higher than the Prior Year.

Current wording

New vehicle retail same store revenues slightly outperformed the Prior Year, driven by more units sold, partially offset by lower pricing. Manufacturer vehicle deliveries were increased in the Current Year and as a result, our inventory levels were higher than the Prior Year, providing for the increase in units sold. Higher new vehicle supply compared to the Prior Year created downward pressure on pricing and margins. We ended the Current Year with a U.S. new vehicle inventory supply of 56 days, 26 days higher than the Prior Year.

Previous wording

Used vehicle retail same store revenues underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing, partially offset by more units sold.. Improved new vehicle supply, impacts from inflation reducing the disposable income of our customers and higher interest rates increasing the monthly cost of financing vehicles continued to create downward pricing pressure.

Current wording

Used vehicle retail same store revenues underperformed the Prior Year, driven by lower pricing, partially offset by more units sold. Used vehicle supply improved as a result of higher new vehicle supply. However, lingering impacts from above-historical average inflation over the past two years reducing the disposable income of our customers and higher interest rates compared to historical averages increasing the monthly cost of financing vehicles, continued to create downward pressure on pricing and demand.

Previous wording

Total gross profit in the U.S. during the Current Year increased $19.6 million, or 1.5%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.

Current wording

Total gross profit in the U.S. during the Current Year increased $15.0 million, or 0.8%, as compared to the Prior Year, primarily driven by the acquisition of stores, partially offset by lower same store gross profit.

Previous wording

Total same store gross profit in the U.S. during the Current Year decreased $31.8 million, or 2.6%, as compared to the Prior Year, primarily driven by downward pressures on new vehicle margins, partially offset by increases from used vehicle retail, F&I and parts and service.

Current wording

Total same store gross profit in the U.S. during the Current Year decreased $58.4 million, or 3.1%, as compared to the Prior Year, primarily driven by downward pressure on new vehicle margins, partially offset by increases from parts and service and F&I.

Previous wording

Newvehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in units sold. The decrease in new vehicle retail same store gross profit per unit is due to higher deliveries from our OEMs, leading to increasing inventory levels of new vehicles as described above.

Current wording

Newvehicle retail same store gross profit underperformed the Prior Year, driven by a decrease in new vehicle retail same store gross profit per unit sold, partially offset by an increase in units sold. The decrease in new vehicle retail same store gross profit per unit sold is due to higher deliveries from our OEMs, leading to increasing inventory levels of new vehicles as described above.

Previous wording

Used vehicle retail same store gross profit outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold.

Current wording

Used vehicle retail same store gross profit slightly outperformed the Prior Year, primarily driven by higher same store used vehicle retail units sold, partially offset by lower same store gross profit per unit sold.

Previous wording

Total same store gross margin in the U.S. decreased 67 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by an improvement in parts and service gross margin as described above for parts and service same store revenues.

Current wording

Total same store gross margin in the U.S. decreased 57 basis points, primarily driven by an underperformance in new vehicle retail, for the reasons described above for same store gross profit per unit sold for new vehicle retail. This underperformance was partially offset by improvement in parts and service and used vehicle gross margins.

Previous wording

SG&A as a percentage of gross profit increased 62 basis points and increased 471 basis points on an as reported and same store basis, respectively, compared to the Prior Year.

Current wording

SG&A as a percentage of gross profit increased 196 basis points and increased 442 basis points on an as reported and same store basis, respectively, compared to the Prior Year.

Previous wording

Total SG&A expenses in the U.S. during the Current Year increased $20.1 million, or 2.5%, as compared to the Prior Year, primarily driven by higher same store SG&A expenses, partially offset by lower SG&A expenses from store dispositions. Total same store SG&A expenses in the U.S. during the Current Year increased $36.8 million, or 4.8%, as compared to the Prior Year, primarily driven by increased activity related to employee-related costs, outside services and professional fees, information technology equipment and related services, loaner car and related expenses, advertising expenses, insurance expenses and legal fees. SG&A expenses also included $5.9 million in pre-tax one-time compensation payments to retain our field employees during the CDK Incident.

Current wording

Total SG&A expenses in the U.S. during the Current Year increased $48.1 million, or 4.0%, as compared to the Prior Year, primarily driven by higher same store SG&A expenses. Total same store SG&A expenses in the U.S. during the Current Year increased $44.9 million, or 3.8%, as compared to the Prior Year, primarily driven byfees associated with the Inchcape Acquisition, coupled with increased outside services, professional fees, employee related costs, advertising expenses, loaner car and related expenses, information technology equipment and related services, insurance expenses and legal fees. SG&A expenses also included $5.9 million in pre-tax one-time compensation payments to retain our field employees during the CDK Incident.

Previous wording

Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles 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 $1.266 at June 30, 2023, to £1 to $1.265 at June 30, 2024, or a decrease in the value of the GBP of 0.1 %.

Current wording

Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles 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 $1.221 at September 30, 2023, to £1 to $1.339 at September 30, 2024, or an increase in the value of the GBP of 9.7%.

Previous wording

New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year Quarter, driven by more units sold, coupled with higher pricing. The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. We ended the Current Quarter with a U.K. new vehicle inventory supply of 35 days, six days higher than the Prior Year Quarter.

Current wording

New vehicle retail same store revenues, on a constant currency basis, were relatively consistent with the Prior Year Quarter. We ended the Current Quarter with a U.K. new vehicle inventory supply of 23 days, one day higher than the Prior Year Quarter.

Previous wording

Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing on a constant currency basis.

Current wording

Used vehicle retail same store revenues, on a constant currency basis, underperformed the Prior Year Quarter, primarily driven by lower used vehicle retail pricing on a constant currency basis and fewer units sold.

Previous wording

Total same store gross profit in the U.K. during the Current Quarter decreased $7.0 million, or 6.7%, as compared to the Prior Year Quarter. On a constant currency basis, total same store gross profit decreased 7.4%, driven by downward pressures on margins for all lines of business.

Current wording

Total same store gross profit in the U.K. during the Current Quarter decreased $0.2 million, or 0.2%, as compared to the Prior Year Quarter. On a constant currency basis, total same store gross profit decreased 3.2%, driven by downward pressure on same store new vehicle and used vehicle gross profit, partially offset by higher same store parts and service gross profit.

Previous wording

New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to a decrease in new vehicle retail gross profit per unit sold, partially offset by an increase units sold, as a result of the increase in new vehicle production as described above generating downward pressure on new vehicle margins.

Current wording

New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to a decrease in new vehicle retail gross profit per unit sold, partially offset by an increase units sold, as a result of the increase in new vehicle production since the Prior Year Quarter, generating downward pressure on new vehicle margins.

Previous wording

Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year Quarter, driven by increases in parts and service same store revenues, as discussed above.

Current wording

Parts and service same store gross profit, on a constant currency basis, outperformed the Prior Year Quarter, driven by increases in parts and service same store revenues, as discussed above in parts and service same store revenues.

Previous wording

Total SG&A expenses in the U.K. during the Current Quarter increased $3.4 million, or 4.5%, as compared to the Prior Year Quarter. Total same store SG&A expenses in the U.K. during the Current Quarter increased $2.4 million, or 3.2%, as compared to the Prior Year Quarter. On a constant currency basis, total same store SG&A expenses increased 2.4%. These increases were primarily driven by increased legal fees associated with the pending acquisition of Inchcape plc, coupled with increased advertising expenses and demonstration and loaner car and related expenses, offset by lower employee related costs compared to the Prior Year Quarter.

Current wording

Total SG&A expenses in the U.K. during the Current Quarter increased $66.9 million, or 84.4%, as compared to the Prior Year Quarter. Total same store SG&A expenses in the U.K. during the Current Quarter increased $8.4 million, or 10.8%, as compared to the Prior Year Quarter. On a constant currency basis, total same store SG&A expenses increased 7.8%. These increases were primarily driven by fees associated with the Inchcape Acquisition, coupled with increased employee related costs and advertising costs, offset by lower facilities costs compared to the Prior Year Quarter.

Previous wording

Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles 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 $1.266 at June 30, 2023, to £1 to $1.265 at June 30, 2024, or a decrease in the value of the GBP of 0.1 %.

Current wording

Retail new vehicle units sold include new vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new vehicles 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 $1.221 at September 30, 2023, to £1 to $1.339 at September 30, 2024, or an increase in the value of the GBP of 9.7%.

Previous wording

Total same store revenues in the U.K. during the Current Year increased $53.3 million, or 3.5%, as compared to the Prior Year, primarily driven byoutperformances in new vehicle retail sales and parts and service, partially offset by lower used vehicle sales and F&I. On a constant currency basis, same store revenues increased 0.8%, primarily driven by an outperformance in new vehicle retail sales and parts and service.

Current wording

Total same store revenues in the U.K. during the Current Year increased $39.9 million, or 1.7%, as compared to the Prior Year, primarily driven byoutperformances in new vehicle retail sales and parts and service and the benefit of positive foreign currency exchange rate movement, partially offset by lower used vehicle sales and F&I. On a constant currency basis, same store revenues decreased 1.0%, primarily driven by underperformances inused vehicle sales and F&I, offset by highernew vehicle retail sales and parts and service.

Previous wording

New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold, coupled with higher pricing. The shortage of new vehicle inventory, compared to pre-COVID-19 pandemic levels, despite recent manufacturers’ production improvements, drove strong pricing. We ended the Current Year with a U.K. new vehicle inventory supply of 35 days, six days higher than the Prior Year.

Current wording

New vehicle retail same store revenues, on a constant currency basis, outperformed the Prior Year, driven by more units sold, coupled with slightly higher pricing. We ended the Current Year with a U.K. new vehicle inventory supply of 23 days, one day higher than the Prior Year.

Previous wording

Total same store gross profit in the U.K. during the Current Year decreased $13.9 million, or 6.5%, as compared to the Prior Year. On a constant currency basis, total same store gross profit decreased 8.9%, driven by downward pressures on margins for all lines of business.

Current wording

Total same store gross profit in the U.K. during the Current Year decreased $14.1 million, or 4.5%, as compared to the Prior Year. On a constant currency basis, total same store gross profit decreased 7.1%, driven by downward pressures on margins across all lines of business.

Previous wording

New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in units sold, as a result of the increase in vehicle inventory production as described above generating downward pressure on new vehicle margins.

Current wording

New vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, primarily due to decrease in new vehicle retail gross profit per unit sold, partially offset by an increase in units sold, as a result of the increase in vehicle inventory production generating downward pressure on new vehicle margins.

Previous wording

Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by a slight increase in used vehicle retail units sold.

Current wording

Used vehicle retail same store gross profit, on a constant currency basis, underperformed the Prior Year, driven by a decrease in used vehicle retail same store gross profit per unit sold, partially offset by an increase in used vehicle retail units sold.

Previous wording

F&I same store gross profit, on a constant currency basis, modestly underperformed the Prior Year, as described above in F&I same store revenues.

Current wording

F&I same store gross profit, on a constant currency basis, underperformed the Prior Year, as described above in F&I same store revenues.

Previous wording

Total same store gross margin in the U.K. decreased 120 basis points, driven by margin declines for all lines of business, caused by inflationary impacts.

Current wording

Total same store gross margin in the U.K. decreased 82 basis points, driven by margin declines across all lines of business attributable to the factors as described above under gross profit.