GROUP 1 AUTOMOTIVE INC

Previous wording

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 61 towns and cities in the U.K. As of June 30, 2026, our retail network consisted of 147 dealerships in the U.S. and 106 dealerships in the U.K.

Current wording

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.

Previous wording

On July 20, 2026, President Donald Trump signed a proclamation imposing an additional 50% ad valorem duty on certain products imported from Canada. The additional duty is scheduled to take effect on August 19, 2026, and would apply on top of any existing duties. Preferential tariff treatment under the United States-Mexico-Canada Agreement does not exempt covered goods. At this time, we cannot predict whether the additional duty will be implemented as scheduled, modified or challenged, or the extent or duration of any resulting impact on our business.

Current wording

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.

Previous wording

During the second quarter of 2026, disruptions in the global supply of Group III base oils, a key component of synthetic motor oil, 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. Continued 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.

Current wording

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.

Previous wording

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 expect that these efforts will remove at least $50 million in annual costs from our U.S. operations.

Current wording

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.

Previous wording

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. The consultation period closed on May 25, 2026, however the proposal has not yet been finalized. Further, 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.

Current wording

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.

Previous wording

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 additional increases in fuel prices and reductions in supplies, which adversely affected consumer demand for vehicles and broader economic conditions. On June 17, 2026, the U.S. and Iran signed a memorandum of understanding intended to end the conflict and reopen the Strait of Hormuz. However, the ceasefire has been repeatedly disrupted by renewed military operations and continued attacks in the region. As a result, uncertainty regarding energy markets, commercial shipping and broader geopolitical conditions continues, and we cannot predict the extent nor duration of any resulting impacts on our business, financial condition or results of operations.

Current wording

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.

Previous wording

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. We cannot predict the timing, scope, nor outcome of future tariff‑related actions or their potential effect, if any, on our results of operations. 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.

Current wording

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.

Previous wording

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. However, on June 12, 2026, the EPA announced its transmission to Congress of four of California’s Clean Air Act preemption waivers, which allow the state to implement more stringent emission control requirements, seeking congressional resolutions disapproving of the waivers under the Congressional Review Act. California has challenged the EPA’s action in the U.S. District Court for the District of Columbia, the outcome of which is uncertain. As a result, there is significant uncertainty with respect to U.S. regulations related to GHG emissions.

Current wording

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.

Previous wording

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 or accounting estimates since December 31, 2025.

Current wording

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.

Previous wording

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 believe providing constant currency information provides valuable 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 believe investors use these metrics 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.

Current wording

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.

Previous wording

Total revenues in the U.S. during the three months ended June 30, 2026 (“Current Quarter”) decreased $243.8 million, or 5.8%, as compared to the three months ended June 30, 2025 (“Prior Year Quarter”), driven by lower same store revenues and the disposition of stores.

Current wording

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.

Previous wording

Total same store revenues in the U.S. during the Current Quarter decreased $175.7 million, or 4.4%, as compared to the Prior Year Quarter, driven by lower revenues across most business lines.

Current wording

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.

Previous wording

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 54 days, six days higher than the Prior Year Quarter.

Current wording

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.

Previous wording

Used vehicle retail same store revenues underperformed the Prior Year Quarter, driven by a decrease in units sold, partially offset by higher pricing. We believe this underperformance reflects the same affordability pressures affecting new vehicle demand, as well as ongoing inventory supply constraints that limited available vehicle selection. We ended the Current Quarter with a U.S. used vehicle inventory supply of 32 days, one day higher than the Prior Year Quarter. Used vehicle wholesale same store revenues outperformed the Prior Year Quarter, driven by higher pricing, partially offset by fewer units sold.

Current wording

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.

Previous wording

Parts and service same store revenues outperformed the Prior Year Quarter, driven by increases in customer pay, warranty and wholesale revenues, partially offset by a decrease in collision revenues. Higher same store technician count resulted in an increase in customer pay repair orders, compared to the Prior Year Quarter, reflecting our continued technician recruiting and retention efforts and our greater capacity to meet increased demand. We continue to invest in incremental service capacity through new dealership construction and expansion of existing facilities.

Current wording

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.

Previous wording

Total gross profit in the U.S. during the Current Quarter decreased $70.2 million, or 9.6%, as compared to the Prior Year Quarter, driven by lower same store gross profit and the disposition of stores.

Current wording

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.

Previous wording

Total same store gross profit in the U.S. during the Current Quarter decreased $58.5 million, or 8.4%, as compared to the Prior Year Quarter, driven by lower gross profit across most business lines.

Current wording

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.

Previous wording

New vehicle retail same store gross profit underperformed the Prior Year Quarter, driven by reduced inventory availability for certain brands, a decrease in gross profit per unit sold and a decline in same store new vehicle retail units sold. Vehicle affordability continues to be a concern for the consumer.

Current wording

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.

Previous wording

Used vehicle retail same store gross profit underperformed the Prior Year Quarter, primarily driven by lower same store gross profit per unit sold, coupled with a decrease in same store used vehicle retail units sold. Additionally, the limited availability of new vehicle inventory for certain brands reduced used vehicle availability, further impacting used vehicle retail units sold. Used vehicle wholesale same store gross profit outperformed the Prior Year Quarter, driven by an increase in same store gross profit per unit sold, partially offset by a decrease 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 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.

Previous wording

Total same store gross margin in the U.S. decreased 73 basis points for the Current Quarter as compared to the Prior Year Quarter.

Current wording

Total same store gross margin in the U.S. decreased 37 basis points for the Current Quarter as compared to the Prior Year Quarter.

Previous wording

Total SG&A expenses in the U.S. during the Current Quarter decreased $27.2 million, or 5.8%, as compared to the Prior Year Quarter, primarily driven by a $27.6 million 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. Total same store SG&A expenses in the U.S. during the Current Quarter, decreased $16.7 million, or 3.7%, as compared to the Prior Year Quarter, primarily driven by a decrease in employee related costs as described above, partially offset by the absence of CDK outage related credits recognized in the Prior Year Quarter that did not recur in the Current Quarter, as well as lower manufacturer advertising assistance as a result of decreases in units sold.

Current wording

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.

Previous wording

Total revenues in the U.S. during the six months ended June 30, 2026 (“Current Year”) decreased $401.7 million, or 5.0%, as compared to the six months ended June 30, 2025 (“Prior Year”), driven by lower same store revenues and the disposition of stores.

Current wording

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.

Previous wording

Total same store revenues in the U.S. during the Current Year decreased $368.6 million, or 4.8%, as compared to the Prior Year. This decrease was driven by lower revenues across most business lines.

Current wording

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.

Previous wording

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 54 days, six days higher than the Prior Year.

Current wording

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.

Previous wording

Used vehicle retail same store revenues underperformed the Prior Year, driven by a decrease in units sold, partially offset by higher pricing. We believe this underperformance reflects 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 32 days, one day higher than the Prior Year. Used vehicle wholesale same store revenues outperformed the Prior Year, driven by higher pricing, partially offset by fewer units sold.

Current wording

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.

Previous wording

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. Higher same store technician count resulted in an increase in customer pay repair orders, compared to the Prior Year, reflecting our continued technician recruiting and retention efforts and our greater capacity to meet increased demand. We continue to invest in incremental aftersales capacity through new dealership construction and expansion of existing facilities.

Current wording

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.

Previous wording

Total gross profit in the U.S. during the Current Year decreased $98.0 million, or 7.0%, as compared to the Prior Year, driven by lower same store gross profit and the disposition of stores.

Current wording

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.

Previous wording

New vehicle retail same store gross profit underperformed the Prior Year, driven by reduced inventory availability for certain brands, a decrease in gross profit per unit sold and a decline in same store new vehicle retail units sold. Vehicle affordability remains a concern for some consumers.

Current wording

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.

Previous wording

Used vehicle retail same store gross profit underperformed the Prior Year, primarily driven by lower same store gross profit per unit sold, coupled with a decrease in same store used vehicle retail units sold. Additionally, the limited availability of new vehicle inventory for certain brands reduced used vehicle availability, further impacting used vehicle retail units sold. Used vehicle wholesale same store gross profit outperformed the Prior Year, driven by an increase in same store gross profit per unit sold, partially offset by a decrease in same store units sold.

Current wording

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.

Previous wording

Parts and service same store gross profit outperformed the Prior Year, driven by increases in customer pay and warranty gross profit, partially offset by decreases in collision and wholesale gross profit. We believe this reflects both the benefit of the strategic decision to reduce our collision footprint in exchange for higher margin service business, and our focus on shop efficiency.

Current wording

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.

Previous wording

Total same store gross margin in the U.S. decreased 41 basis points for the Current Year as compared to the Prior Year.

Current wording

Total same store gross margin in the U.S. decreased 40 basis points for the Current Year as compared to the Prior Year.

Previous wording

SG&A as a percentage of gross profit increased 59 basis points and increased 380 basis points on an as reported and same store basis, respectively, as compared to the Prior Year.

Current wording

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.

Previous wording

Total SG&A expenses in the U.S. during the Current Year decreased $56.5 million, or 6.1%, as compared to the Prior Year, primarily driven by an increase in gains recognized on disposal of assets of $40.6 million, coupled with a $24.8 million decrease in employee related costs resulting from reduced staffing as part of our cost-cutting measures and lower commission expenses associated with lower gross profit. Total same store SG&A expenses in the U.S. during the Current Year, decreased $14.2 million, or 1.6%, as compared to the Prior Year, primarily driven by a decrease in employee related costs as described above. These decreases were partially offset by the absence of CDK outage related credits recognized in the Prior Year that did not recur in the Current Year, as well as lower manufacturer advertising assistance as a result of decreases in units sold and higher third-party service fees.

Current wording

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.

Previous wording

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$1.372 at June 30, 2025, to £1 to$1.324 at June 30, 2026, or a decrease in the value of the GBP of 3.4%.

Current wording

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%.

Previous wording

Total revenues in the U.K. during the Current Quarter decreased $74.7 million, or 4.9%, as compared to the Prior Year Quarter, driven primarily by the impact of dealership dispositions.

Current wording

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.

Previous wording

Total same store revenues in the U.K. during the Current Quarter remained flat, as compared to the Prior Year Quarter, as increases in parts and service, new vehicle retail and F&I, net revenues were offset by a decline in used vehicle revenues. On a constant currency basis, same store revenues decreased 0.6%, reflecting growth in parts and service, F&I, net and new vehicle retail revenues, offset by a decline in used vehicle revenues.

Current wording

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 byincreases 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.

Previous wording

Used vehicle retail same store revenues decreased 0.6% 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. The Current Quarter ended with a used vehicle inventory supply of 43 days, no change from the Prior Year Quarter. Used vehicle wholesale same store revenues decreased 21.1% on a constant currency basis, as compared to the Prior Year Quarter, primarily driven by a decrease in wholesale used vehicle units sold, as well as a decline in average wholesale values.

Current wording

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.

Previous wording

Parts and service same store revenues increased 4.5% on a constant currency basis, as compared to the Prior Year Quarter, driven by increases across all business lines, led by wholesale parts revenues. We have invested in improvements to our U.K. customer contact center, streamlining operations to make scheduling appointments easier for customers, which also contributed to increased customer pay activity as compared to the Prior Year Quarter.

Current wording

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.

Previous wording

F&I, net same store revenues increased 4.7% 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 and used vehicle retail unit sales.

Current wording

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.

Previous wording

Total gross profit in the U.K. during the Current Quarter decreased $5.0 million, or 2.4%, as compared to the Prior Year Quarter, driven primarily by the impact of dealership dispositions.

Current wording

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.