SONIC AUTOMOTIVE INC

Previous wording

Unless otherwise noted, all discussion of increases or decreases are for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The following discussion of Franchised Dealerships Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition. The following discussion of EchoPark Segment used vehicles, wholesale vehicles, and finance, insurance and other, net is on a reported basis, except where otherwise noted. All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. The following discussion of Powersports Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a reported basis, except where otherwise noted. All currently operating stores in the Powersports Segment are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.

Current wording

Unless otherwise noted, all discussion of increases or decreases are for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. The following discussion of Franchised Dealerships Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition. The following discussion of EchoPark Segment used vehicles, wholesale vehicles, and finance, insurance and other, net is on a reported basis, except where otherwise noted. All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. The following discussion of Powersports Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a reported basis, except where otherwise noted. All currently operating stores in the Powersports Segment are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.

Previous wording

We are one of the largest automotive retailers in the U.S. (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of March 31, 2025: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of March 31, 2025, we operated 108 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment and 14 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 133 new vehicle franchises (representing 25 different brands of cars and light trucks) and 16 collision repair centers in 18 states. The EchoPark Segment consists of 18 stores in 10 states. The Powersports Segment consists of 10 franchises and four authorized retail outlets in three states.

Current wording

We are one of the largest automotive retailers in the U.S. (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of June 30, 2025: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of June 30, 2025, we operated 111 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment and 14 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 136 new vehicle franchises (representing 25 different brands of cars and light trucks) and 16 collision repair centers in 18 states. The EchoPark Segment consists of 18 stores in 10 states. The Powersports Segment consists of 41 franchises at 14 locations (11 full-service dealerships and three authorized retail outlets) in three states.

Previous wording

The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) seasonally adjusted annual rate of unit sales volume (the “total new vehicle SAAR”) increased 8% for the three months ended March 31, 2025, to approximately 16.6 million vehicles, compared to approximately 15.4 million vehicles for the three months ended March 31, 2024, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2025 new vehicle industry volume will be between 15.6 million vehicles (a decrease of 3% compared to 2024) and 16.3 million vehicles (an increase of 1% compared to 2024). The effects of changes in trade policy and the imposition of tariffs, interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand as a result of economic conditions, natural disasters or other unforeseen circumstances could cause the actual 2025 new vehicle industry volume to vary from expectations. Many factors, including brand and geographic concentrations as well as the industry sales mix between retail and fleet new vehicle unit sales volume, have caused our past results to differ from the industry’s overall trend. Our new vehicle sales strategy focuses on our retail new vehicle sales (as opposed to fleet new vehicle sales) and, as a result, we believe it is appropriate to compare our retail new vehicle unit sales volume to the industry retail new vehicle seasonally adjusted annual rate of unit sales volume (the “retail new vehicle SAAR”) (which excludes fleet new vehicle sales). According to PIN from J.D. Power, the retail new vehicle SAAR increased 11% to approximately 14.0 million vehicles for the three months ended March 31, 2025, from approximately 12.6 million vehicles for the three months ended March 31, 2024. We believe some of the increase in new vehicle SAAR during the three months ended March 31, 2025 is attributable to advanced purchases of new vehicles ahead of changes in U.S. tariff policy announced on April 2, 2025.

Current wording

The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) seasonally adjusted annual rate of unit sales volume (the “total new vehicle SAAR”) increased 2% and 3% for the three and six months ended June 30, 2025, respectively, to approximately 16.0 million vehicles for both the three and six months ended June 30, 2025, compared to approximately 15.7 million and 15.6 million vehicles for the three and six months ended June 30, 2024, respectively, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2025 new vehicle industry volume will be between 15.6 million vehicles (a decrease of 3% compared to 2024) and 16.3 million vehicles (an increase of 1% compared to 2024). The effects of changes in trade policy and the imposition of tariffs, interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand as a result of economic conditions, natural disasters or other unforeseen circumstances could cause the actual 2025 new vehicle industry volume to vary from expectations. Many factors, including brand and geographic concentrations as well as the industry sales mix between retail and fleet new vehicle unit sales volume, have caused our past results to differ from the industry’s overall trend. Our new vehicle sales strategy focuses on our retail new vehicle sales (as opposed to fleet new vehicle sales) and, as a result, we believe it is appropriate to compare our retail new vehicle unit sales volume to the industry retail new vehicle seasonally adjusted annual rate of unit sales volume (the “retail new vehicle SAAR”) (which excludes fleet new vehicle sales). According to PIN from J.D. Power, the retail new vehicle SAAR increased 6% and 4% to approximately 13.4 million and 13.2 million vehicles for the three and six months ended June 30, 2025, respectively, from approximately 12.7 million vehicles for both the three and six months ended June 30, 2024. We believe some of the increase in new vehicle SAAR during the three and six months ended June 30, 2025 is attributable to advanced purchases of new vehicles ahead of changes in U.S. tariff policy announced on April 2, 2025.

Previous wording

On June 19, 2024, CDK Global (“CDK”), a third-party provider of certain information systems, notified us that CDK had suspended certain systems used by us in response to a cybersecurity incident impacting CDK (the “CDK outage”). This outage adversely affected our business and results of operations during the second and third quarters of 2024. In connection with the CDK outage, we recognized $10.0 million in income from cyber insurance proceeds during the three months ended December 31, 2024, and $30.0 million in income from cyber insurance proceeds during the three months ended March 31, 2025, which was recorded as a reduction to Selling, general and administrative expenses.

Current wording

On June 19, 2024, CDK Global (“CDK”), a third-party provider of certain information systems, notified us that CDK had suspended certain systems used by us in response to a cybersecurity incident impacting CDK (the “CDK outage”). This outage adversely affected our business and results of operations during the second and third quarters of 2024. In connection with the CDK outage, we recognized $10.0 million in pre-tax income from cyber insurance proceeds during the three months ended December 31, 2024, $30.0 million in pre-tax income from cyber insurance proceeds during the three months ended March 31, 2025, and $10.0 million in pre-tax income from cyber insurance proceeds during the three months ended June 30, 2025, which were each recorded as a reduction to selling, general and administrative expenses.

Previous wording

Same store retail new vehicle revenue increased 13% during the three months ended March 31, 2025, driven primarily by a 10% increase in retail new vehicle unit sales volume, coupled with a 2% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased 9% during the three months ended March 31, 2025, due primarily to increased price competition as a result of increasing levels of available inventory and higher inventory invoice cost, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $643 per unit, or 17%, to $3,089 per unit during the three months ended March 31, 2025. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 51 days as of March 31, 2025, compared to 50 days as of March 31, 2024.

Current wording

Same store retail new vehicle revenue increased 6% and 10% during the three and six months ended June 30, 2025, driven primarily by a 5% and 8% increase in retail new vehicle unit sales volume, respectively, coupled with a 1% and 2% increase in retail new vehicle average selling price, respectively. Retail new vehicle gross profit decreased 1% and 5% during the three and six months ended June 30, 2025, respectively, due primarily to increased price competition as a result of increasing levels of available inventory and higher inventory invoice cost, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $212 per unit, or 6%, to $3,391 per unit during the three months ended June 30, 2025 and decreased $425 per unit, or 12%, to $3,245 per unit during the six months ended June 30, 2025. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 54 days as of June 30, 2025, compared to 59 days as of June 30, 2024.

Previous wording

Same store retail used vehicle revenue increased 1% during the three months ended March 31, 2025, driven primarily by a 3% increase in retail used vehicle average selling prices, partially offset by a 2% decrease in retail used vehicle sales volume. Retail used vehicle gross profit decreased 5% during the three months ended March 31, 2025, primarily due to lower retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit decreased $45 per unit, or 3%, to $1,555 per unit during the three months ended March 31, 2025 due primarily to higher inventory acquisition costs. Same store wholesale vehicle gross loss worsened by approximately $0.8 million, to a gross loss of approximately $1.0 million during the three months ended March 31, 2025, due primarily to a $117 per unit, or 355%, increase in wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. We generally focus on maintaining Franchised Dealerships Segment used vehicle inventory days’ supply in the 25- to 35-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 31 and 28 days as of March 31, 2025 and 2024, respectively.

Current wording

Same store retail used vehicle revenue increased 1% during both the three and six months ended June 30, 2025, driven primarily by a 5% and 4% increase in retail used vehicle average selling prices, respectively, partially offset by a 4% and 3% decrease in retail used vehicle sales volume, respectively. Retail used vehicle gross profit decreased 1% and 3% during the three and six months ended June 30, 2025, respectively, primarily due to lower retail used vehicle sales volume. Retail used vehicle gross profit per unit increased $49 per unit, or 3%, to $1,590 per unit during the three months ended June 30, 2025 and remained flat at $1,573 per unit during the six months ended June 30, 2025. Same store wholesale vehicle gross loss worsened by approximately $0.3 million, to a gross loss of approximately $0.8 million during the three months ended June 30, 2025, and worsened by approximately $1.0 million, to a gross loss of approximately $1.7 million during the six months ended June 30, 2025, due primarily to a $49 per unit, or 60%, increase in wholesale vehicle gross loss per unit, and a $83 per unit, or 148%, increase in wholesale vehicle gross loss per unit, respectively, as a result of changes in pricing and demand for vehicles at wholesale auction. We generally focus on maintaining Franchised Dealerships Segment used vehicle inventory days’ supply in the 25- to 35-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 35 and 30 days as of June 30, 2025 and 2024, respectively.

Previous wording

Same store Fixed Operations revenue increased 5% during the three months ended March 31, 2025, driven primarily by increased service capacity as a result of additional technician headcount, and higher parts and labor costs that were passed along to consumers. Fixed Operations gross profit increased 7% during the three months ended March 31, 2025, driven primarily by higher warranty revenue contribution and higher warranty gross margin. Fixed Operations gross margin increased 70 basis points, to 50.8%, during the three months ended March 31, 2025, primarily driven by an increase in warranty revenue contribution and higher warranty gross margin.

Current wording

Same store Fixed Operations revenue increased 10% and 8% during the three and six months ended June 30, 2025, respectively, driven primarily by increased service capacity as a result of additional technician headcount, and higher parts and labor costs that were passed along to consumers. Same store Fixed Operations gross profit increased 12% and 10% during the three and six months ended June 30, 2025, respectively, driven primarily by higher warranty revenue contribution and higher warranty gross margin. Same store Fixed Operations gross margin increased 90 basis points, to 51.3%, during the three months ended June 30, 2025, and increased 80 basis points, to 51.0%, during the six months ended June 30, 2025, primarily driven by an increase in warranty revenue contribution and higher warranty gross margin.

Previous wording

Reported total revenues remained flat during the three months ended March 31, 2025, driven primarily by a 5% increase in retail used vehicle unit sales volume, offset by a 6% decrease in average retail used vehicle unit selling prices. Reported total gross profit increased 21% during the three months ended March 31, 2025, primarily driven by a 23% increase in F&I gross profit.

Current wording

Reported total revenues decreased 2% and 1% during the three and six months ended June 30, 2025, respectively, driven primarily by a 5% and 6% decrease in average retail used vehicle unit selling prices, respectively, partially offset by a 3% and 4% increase in total vehicle unit sales volume, respectively. Reported total gross profit increased 22% during both the three and six months ended June 30, 2025, respectively, driven primarily by a 47% and 23% increase in used vehicles gross profit, respectively.

Previous wording

Same market total revenues increased 3% during the three months ended March 31, 2025, primarily attributable to a 7% increase in total retail used vehicle unit sales volume, partially offset by a 6% decrease in average selling price per used retail unit. Same market total gross profit increased 19% during the three months ended March 31, 2025, driven by a 7% increase in total retail used vehicle unit sales volume and a 12% increase in combined retail used vehicle and F&I gross profit per unit.

Current wording

Same market total revenues decreased 2% and remained flat during the three and six months ended June 30, 2025, respectively, attributable to a 5% and 6% decrease in average selling price per used retail unit, respectively, partially offset by a 3% and 5% increase in total vehicle unit sales volume, respectively. Same market total gross profit increased 19% during both the three and six months ended June 30, 2025, respectively, driven by a 19% and 15% increase in combined retail used vehicle and F&I gross profit per unit, respectively and a 3% and 5% increase in total vehicle unit sales volume, respectively.

Previous wording

Reported retail used vehicle revenue decreased 2% during the three months ended March 31, 2025, driven primarily by a 6% decrease in average retail used vehicle unit selling prices, partially offset by a 5% increase in retail used vehicle unit sales volume. F&I revenue increased 23% during the three months ended March 31, 2025, driven primarily by a 17% increase in F&I gross profit per unit. Reported combined retail used vehicle and F&I gross profit per unit increased $456 per unit, or 15%, to $3,411 per unit during the three months ended March 31, 2025, due primarily to increases in F&I gross profit per unit during the three months ended March 31, 2025.

Current wording

Reported retail used vehicle revenue decreased 5% and 3% during the three and six months ended June 30, 2025, respectively, driven primarily by a 5% and 6% decrease in average retail used vehicle unit selling prices, respectively, partially offset by a 1% and 3% increase in retail used vehicle unit sales volume, respectively. F&I revenue increased 20% and 21% during the three and six months ended June 30, 2025, driven primarily by a 19% and 18% increase in F&I gross profit per unit. Reported combined retail used vehicle and F&I gross profit per unit increased $669 per unit, or 22%, to $3,747 per unit during the three months ended June 30, 2025, and increased $555 per unit, or 18%, to $3,569 for the six months ended June 30, 2025 due primarily to increases in F&I gross profit per unit during the three and six months ended June 30, 2025.

Previous wording

Reported wholesale vehicle gross loss improved by approximately $0.4 million during the three months ended March 31, 2025, primarily due to a 60% improvement in wholesale vehicle gross loss per unit and a 5% increase in wholesale vehicle unit sales volume. We generally focus on maintaining EchoPark Segment used vehicle inventory days’ supply in the 30- to 40-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported EchoPark Segment used vehicle inventory days’ supply was approximately 35 and 36 days as of March 31, 2025 and 2024, respectively.

Current wording

Reported wholesale vehicle gross loss worsened by approximately $0.5 million and $0.2 million during the three and six months ended June 30, 2025, respectively, primarily due to a 380% and 25% decline in wholesale vehicle gross loss per unit, respectively, partially offset by a 19% and 12% increase in wholesale vehicle unit sales volume during the three and six months ended June 30, 2025, respectively. We generally focus on maintaining EchoPark Segment used vehicle inventory days’ supply in the 30- to 40-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported EchoPark Segment used vehicle inventory days’ supply was approximately 41 and 38 days as of June 30, 2025 and 2024, respectively.

Previous wording

Reported retail new vehicle revenue increased by 22% during the three months ended March 31, 2025, primarily due to an 18% increase in retail new vehicle unit sales volume, coupled with a 4% increase in retail new vehicle average selling prices. Retail new vehicle gross profit increased 17% during the three months ended March 31, 2025 as a result of the higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit increased $5 per unit, to $2,681 per unit for the three months ended March 31, 2025.

Current wording

Reported retail new vehicle revenue increased by 24% and 23% during the during the three and six months ended June 30, 2025, respectively, primarily due to a 17% increase in retail new vehicle unit sales volume during both the three and six months ended June 30, 2025, coupled with a 6% and 5% increase in retail new vehicle average selling prices during the three and six months ended June 30, 2025, respectively. Retail new vehicle gross profit increased 34% and 27% during the three and six months ended June 30, 2025, respectively, as a result of the higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit increased $362 per unit, or 15%, to $2,828 per unit for the three months ended June 30, 2025 and increased $214 per unit, or 8%, to $2,767 per unit for the six months ended June 30, 2025.

Previous wording

Same store retail new vehicle revenue increased 8% during the three months ended March 31, 2025, primarily driven by a 4% increase in retail new vehicle unit sales volume and a 4% increase in retail new vehicle average selling price. Retail new vehicle gross profit remained flat during the three months ended March 31, 2025, as a result of the increase in retail new vehicle unit sales volume, offset by lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $84 per unit, or 3%, to $2,588, due primarily to higher inventory invoice costs. On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 166 and 225 days as of March 31, 2025 and 2024, respectively, varying based on manufacturer production levels and consumer demand.

Current wording

Same store retail new vehicle revenue increased 13% and 11% during the three and six months ended June 30, 2025, respectively, driven by a 7% and 6% increase in retail new vehicle unit sales volume and a 6% and 5% increase in retail new vehicle average selling price during the three and six months ended June 30, 2025, respectively. Retail new vehicle gross profit increased 19% and 11% during the three and six months ended June 30, 2025, respectively, as a result of the increase in retail new vehicle unit sales volume and an increase in gross profit per unit. Retail new vehicle gross profit per unit increased $282 per unit, or 11%, to $2,771 for the three months ended June 30, 2025 and increased $132 per unit, or 5%, to $2,696 per unit for the six months ended June 30, 2025, due primarily to higher inventory invoice costs. On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 135 and 187 days as of June 30, 2025 and 2024, respectively, varying based on manufacturer production levels and consumer demand.

Previous wording

Same store used vehicle revenue increased 47% during thethree months ended March 31, 2025, primarily driven by a 25% increase in retail used vehicle unit sales volume, coupled with a 17% increase in retail used vehicle average selling price. Retail used vehicle gross profit remained flat during the three months ended March 31, 2025 and retail used vehicle gross profit per unit decreased $373 per unit, or 17%, to $1,780, primarily due to higher inventory costs. On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 83 and 99 days as of March 31, 2025 and 2024, respectively.

Current wording

Same store used vehicle revenue increased 43% and 44%during thethree and six months ended June 30, 2025, respectively, primarily driven by a 46% and 37% increase in retail used vehicle unit sales volume forthe three and six months ended June 30, 2025, respectively. Retail used vehicle gross profit increased 22% and 14% during the three and six months ended June 30, 2025, respectively. Retail used vehicle gross profit per unit decreased $415 per unit, or 17%, to $2,043, for the three months ended June 30, 2025 and decreased $387 per unit, or 17%, to $1,940 per unit for the six months ended June 30, 2025, primarily due to higher inventory costs. On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 102 and 96 days as of June 30, 2025 and 2024, respectively.

Previous wording

Reported Fixed Operations revenue increased 3% during the three months ended March 31, 2025 and Fixed Operations gross profit increased 10% during the three months ended March 31, 2025, driven primarily by higher repair order volume as a result of acquisitions. Fixed Operations gross margin increased 220 basis points to 49% during the three months ended March 31, 2025, driven primarily by an increase in warranty revenue contribution and warranty gross margin.

Current wording

Reported Fixed Operations revenue increased 9% and 7% during the three and six months ended June 30, 2025, respectively, and Fixed Operations gross profit increased 9% during both the three and six months ended June 30, 2025, driven primarily by higher repair order volume as a result of acquisitions. Fixed Operations gross margin increased 30 basis points to 47.1% and increased 70 basis points to 47.7% during the three and six months ended June 30, 2025, respectively, driven primarily by an increase in customer pay and warranty revenue contribution and customer pay gross margin.

Previous wording

Same store Fixed Operations revenue decreased 10% and Fixed Operations gross profit decreased 3% during the three months ended March 31, 2025, driven primarily by lower repair order volume. Fixed Operations gross margin increased 300 basis points, to 50% during the three months ended March 31, 2025, driven primarily by an increase in warranty revenue contribution and warranty gross margin.

Current wording

Same store Fixed Operations revenue increased 2% and Fixed Operations gross profit increased 5% for the three months ended June 30, 2025, driven primarily by higher repair order volume during the quarter. Same store Fixed Operations revenue decreased 3% and Fixed Operations gross profit remained flat during the six months ended June 30, 2025, driven by lower repair order volume for the year-to-date period. Fixed Operations gross margin increased 70 basis points, to 48% and increased 160 basis points to 49% during the three and six months ended June 30, 2025, respectively, driven primarily by an increase in customer pay revenue contribution and customer pay gross margin.

Previous wording

Reported F&I revenue remained flat during the three months ended March 31, 2025 driven primarily by a 25% increase in combined retail new and used vehicle unit sales volume in the three months ended March 31, 2025, offset by a 21% decrease in F&I gross profit per retail unit in the three months ended March 31, 2025. F&I gross profit per retail unit decreased $254 per unit, or 21%, to $943 per unit during the three months ended March 31, 2025.

Current wording

Reported F&I revenue remained flat and decreased 1% during the three and six months ended June 30, 2025, respectively, driven primarily by a 23% and 22% decrease in F&I gross profit per retail unit in the three and six months ended June 30, 2025, respectively, offset by a 29% and 27% increase in combined retail new and used vehicle unit sales volume in the three and six months ended June 30, 2025, respectively. F&I gross profit per retail unit decreased $264 per unit, or 23%, to $889 per unit during the three months ended June 30, 2025 and decrease $260 per unit, or 22%, to $912 per unit during the six months ended June 30, 2025.

Previous wording

The following table depicts the breakdown of our Franchised Dealerships Segment new vehicle revenues by brand for the three months ended March 31, 2025 and 2024:

Current wording

The following table depicts the breakdown of our Franchised Dealerships Segment new vehicle revenues by brand for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table provides a reconciliation of Franchised Dealerships Segment reported basis and same store basis for new vehicles:

Current wording

The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for new vehicles:

Previous wording

Retail new vehicle revenue increased 13%, due primarily to a 10% increase in retail new vehicle unit sales volume and a 2% increase in retail new vehicle average selling prices. Retail new vehicle gross profit decreased approximately $8.1 million, or 9%, as a result of lower retail new vehicle gross profit per unit, offset partially by higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit decreased $643 per unit, or 17%, to $3,089 per unit, due primarily to increased price competition and higher inventory invoice costs.

Current wording

Retail new vehicle revenue increased 10%, due primarily to an 8% increase in retail new vehicle unit sales volume and a 2% increase in retail new vehicle average selling prices. Retail new vehicle gross profit decreased approximately $8.8 million, or 5%, as a result of lower retail new vehicle gross profit per unit, offset partially by higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit decreased $425 per unit, or 12%, to $3,245 per unit, due primarily to increased price competition as a result of higher levels of available inventory than in the prior year period and higher inventory invoice costs.

Previous wording

Retail used vehicle revenue increased approximately $5.0 million, or 1%, driven primarily by a 3% increase in retail used vehicle average selling prices, partially offset by a 2% decrease in retail used vehicle unit sales volume. Retail used vehicle gross profit decreased approximately $2.0 million, or 5%, driven primarily by a $45 per unit, or 3%, decrease in retail used vehicle gross profit per unit, as well as a 2% decrease in retail used vehicle unit sales volume, due primarily to higher inventory acquisition costs and increased price competition as a result of ongoing consumer affordability challenges.

Current wording

Retail used vehicle revenue increased approximately $4.9 million, or 1%, driven primarily by a 5% increase in retail used vehicle average selling prices, partially offset by a 4% decrease in retail used vehicle unit sales volume. Retail used vehicle gross profit decreased approximately $0.3 million, or 1%, driven primarily by a 4% decrease in retail used vehicle unit sales volume, offset by a $49 per unit, or 3%, increase in retail used vehicle gross profit per unit.

Previous wording

Wholesale vehicle revenue increased approximately $5.8 million, or 12%, driven primarily by a 21% increase in wholesale vehicle unit sales volume, partially offset by a 7% decrease in wholesale vehicle revenue per unit during the three months ended March 31, 2025. Wholesale vehicle gross profit (loss) worsened by approximately $0.8 million.

Current wording

Wholesale vehicle revenue increased approximately $8.6 million, or 18%, driven primarily by a 17% increase in wholesale vehicle unit sales volume coupled with a 1% increase in wholesale vehicle revenue per unit during the three months ended June 30, 2025. Wholesale vehicle gross profit (loss) worsened by approximately $0.3 million, driven primarily by a $49 per unit worsening of wholesale vehicle gross profit (loss) per unit during the second quarter of 2025.

Previous wording

F&I revenue increased approximately $9.9 million, or 8%, due primarily to a 4% increase in F&I gross profit per retail unit and a 4% increase in total combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $92 per unit, or 4%, to $2,442 per unit, due primarily to higher gross profit per finance contract and service contract, and an increase in other aftermarket contract penetration rates.

Current wording

F&I revenue increased approximately $18.6 million, or 15%, due primarily to a 14% increase in F&I gross profit per retail unit and a 1% increase in total combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $335 per unit, or 14%, to $2,718 per unit, due primarily to higher gross profit per finance contract and service contract, an increase in other aftermarket contract penetration rates, and changes to our F&I product cost structure.

Previous wording

Finance contract revenue for combined retail new and used vehicles increased 9%, due primarily to a 6% increase in gross profit per finance contract and a 3% increase in finance contract volume. Service contract revenue for combined retail new and used vehicles increased 9%, due primarily to a 2% increase in service contract volume and a 7% increase in gross profit per service contract. Other aftermarket contract revenue for combined retail new and used vehicles increased 7%, due primarily to a 2% increase in gross profit per other aftermarket contract, a 4% increase in total contracts, and a 30-basis point increase in the other aftermarket contract penetration rate.

Current wording

Finance contract revenue for combined retail new and used vehicles increased 9%, due primarily to a 6% increase in gross profit per finance contract and a 2% increase in finance contract volume. Service contract revenue for combined retail new and used vehicles increased 10%, due primarily to a 4% increase in service contract volume and a 6% increase in gross profit per service contract. Other aftermarket contract revenue for combined retail new and used vehicles increased 4%, due primarily to a 1% increase in gross profit per other aftermarket contract, a 4% increase in total contracts, and a 140-basis point increase in the other aftermarket contract penetration rate.

Previous wording

Retail used vehicle revenue increased approximately $0.5 million, due primarily to a 6% decrease in retail used vehicle revenue per unit, offset partially by a 7% increase in retail used vehicle unit sales volume. Combined retail used vehicle gross profit and F&I revenue increased approximately $10.3 million, or 19%, due primarily to an $11.6 million, or 24%, increase in F&I revenue and a 12%, or $355 per unit increase in combined retail used vehicle and F&I gross profit. The increasein combined retail used vehicle and F&I gross profit per unit was due primarily to higher F&I penetration rates, an improvement in inventory acquisition costs as a result of sourcing a higher percentage of inventory from non-auction sources, and expanding our inventory to include older vehicles, which typically earn a higher gross profit per unit.

Current wording

Retail used vehicle revenue decreased approximately $21.4 million, due primarily to a 5% decrease in retail used vehicle revenue per unit, offset partially by a 1% increase in retail used vehicle unit sales volume. Combined retail used vehicle gross profit and F&I revenue increased approximately $10.1 million, or 19%, due primarily to an $8.8 million, or 19%, increase in F&I revenue and a$590, or a 19% per unit increase in combined retail used vehicle and F&I gross profit. The increasein combined retail used vehicle and F&I gross profit per unit was due primarily to higher F&I penetration rates, changes to our F&I product cost structure, an improvement in inventory acquisition costs as a result of sourcing a higher percentage of inventory from non-auction sources, and expanding our inventory to include older vehicles, which typically earn a higher gross profit per unit.

Previous wording

Same market wholesale vehicle revenue increased approximately $1.8 million, or 7%, due primarily to a 13% increase in wholesale vehicle unit sales volume, offset partially by a 5% decrease in wholesale vehicle revenue per unit. As we adjust the inventory mix of nearly new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.

Current wording

Same market wholesale vehicle revenue increased approximately $3.5 million, or 16%, due primarily to a 19% increase in wholesale vehicle unit sales volume, offset partially by a 3% decrease in wholesale vehicle revenue per unit. As we adjust the inventory mix of nearly new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.

Previous wording

The following table provides a reconciliation of Powersports Segment reported basis and same store basis for retail new vehicles:

Current wording

The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for retail new vehicles:

Previous wording

Retail new vehicle revenue increased 8%, due primarily to a 4% increase in retail new vehicle average selling prices, along with a 4% increase in retail new vehicle unit sales volume. Retail new vehicle gross profit was flat, as a result of lower retail new vehicle gross profit per unit, offset by higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit decreased $84 per unit, or 3%, to $2,588 per unit, due primarily to higher inventory invoice costs and changes in brand mix.

Current wording

Retail new vehicle revenue increased 13%, due primarily to a 6% increase in retail new vehicle average selling prices, along with a 7% increase in retail new vehicle unit sales volume. Retail new vehicle gross profit increased 19%, as a result of higher retail new vehicle gross profit per unit and higher retail new vehicle unit sales volume. Retail new vehicle gross profit per unit increased $282 per unit, or 11%, to $2,771 per unit.

Previous wording

Same store wholesale vehicle revenue increased approximately $0.6 million, due to higher wholesale vehicle unit sales volume. Same store wholesale vehicle gross loss remained flat.

Current wording

Same store wholesale vehicle revenue increased approximately $0.2 million, due to higher wholesale vehicle unit sales volume. Same store wholesale vehicle gross profit loss improved by approximately $0.1 million.

Previous wording

Same store Fixed Operations revenue decreased approximately $0.6 million, or 10%, and same store Fixed Operations gross profit decreased approximately $0.1 million, or 3%, primarily due to lower parts and accessories volume and higher inventory costs of parts and accessories. Customer pay revenue decreased approximately $0.6 million, or 35%, and customer pay gross profit decreased approximately $0.3 million, or 43%. Warranty revenue increased approximately $0.5 million, or 125%, and warranty gross profit increased approximately $0.4 million, or 133%. Wholesale parts revenue decreased approximately $0.1 million, or 50%, and wholesale parts gross profit decreased approximately $0.1 million, or 100%. Internal, sublet and other revenue decreased approximately $0.4 million, or 10%, and internal, sublet and other gross profit decreased approximately $0.1 million, or 6%.

Current wording

Same Store Fixed Operations revenue decreased approximately $0.4 million, or 3%, and same store Fixed Operations gross profit was flat. Customer pay revenue decreased approximately $0.2 million or 6%, and customer pay gross profit increased approximately $0.3 million, or 33%. Warranty revenue increased approximately $0.6 million, or 38%, and warranty gross profit increased approximately $0.1 million, or 7%. Wholesale parts revenue decreased approximately $0.2 million, or 50%, and wholesale parts gross profit decreased approximately $0.1 million, or 60%. Internal, sublet and other revenue decreased approximately $0.6 million, or 6%, and internal, sublet and other gross profit decreased approximately $0.3 million, or 7%.

Previous wording

Same store F&I revenue was flat. F&I gross profit per retail unit decreased $129 per unit, or 11%, to $1,037 per unit, due primarily to a decrease in gross profit per finance, service and other aftermarket contracts.

Current wording

Same store F&I revenue was flat, due primarily to a 15% increase in retail new and used vehicle unit sales volume, partially offset by a 13% decrease in F&I gross profit per retail unit. F&I gross profit per retail unit decreased $141 per unit, or 13%, to $984 per unit, due primarily to a decrease in gross profit per finance, service and other aftermarket contracts.

Previous wording

Same store finance contract revenue decreased 17%, due primarily to a 35% decrease in gross profit per finance contract, offset partially by a 27% increase in combined new and used vehicle finance contract volume. Service contract revenue decreased 4%, due primarily to a 16% decrease in gross profit per service contract, offset partially by a 14% increase in retail new and used vehicle service contract unit sales volume. Other aftermarket contract revenue increased 18%, due primarily to a 940-basis point increase in the other aftermarket contract penetration rate, and a 36% increase in other aftermarket contract volume, offset partially by a 13% decrease in gross profit per other aftermarket contract.

Current wording

Same store finance contract revenue decreased 4%, due primarily to a 22% decrease in gross profit per finance contract, offset partially by a 23% increase in combined new and used vehicle finance contract volume. Service contract revenue decreased 5%, due primarily to a 17% decrease in gross profit per service contract, offset partially by a 14% increase in retail new and used vehicle service contract unit sales volume. Other aftermarket contract revenue increased 19%, driven primarily by a 340-basis point increase in the other aftermarket contract penetration rate and a 25% increase in other aftermarket contract volume, offset partially by a 5% decrease in gross profit per other aftermarket contract.

Previous wording

(5)For the three months ended March 31, 2025, amount includes approximately $0.2 million of pre-tax property and equipment charges for real estate held for sale in the EchoPark Segment and approximately $1.1 million of pre-tax property, equipment and right-of-use asset charges for the Powersports Segment. For the three months ended March 31, 2024, amount includes approximately $1.0 million of pre-tax property and equipment charges for the Franchised Dealerships Segment. Due to rounding, segment level financial data may not sum to consolidated results.

Current wording

(5)For the three months ended June 30, 2025, amount includes approximately $165.9 million of non-cash pre-tax franchise asset impairment charges for the Franchised Dealerships Segment and approximately $6.5 million of non-cash pre-tax franchise asset impairment charges for the Powersports Segment. For the three months ended June 30, 2024, amount includes approximately $1.4 million of non-cash pre-tax property and equipment charges for real estate held for sale in the EchoPark Segment.

Previous wording

(2)For the three months ended March 31, 2025, amount includes approximately $30.0 million of pre-tax benefit in cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024, approximately $0.9 million of pre-tax charges related to storm damage, and approximately $0.3 million of pre-tax charges related to disposition losses. For the three months ended March 31, 2024, amount includes approximately $2.2 million of pre-tax charges for severance and long-term compensation expense and approximately $1.0 million of pre-tax impairment charges related to property and equipment. Due to rounding, segment level financial data may not sum to consolidated results.

Current wording

(2)For the six months ended June 30, 2025, amount includes $40.0 million of pre-tax benefit from cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024, approximately $5.0 million of pre-tax charges related to storm damage, approximately $165.9 million of non-cash pre-tax franchise asset impairment charges, and approximately $2.7 million of pre-tax charges related to dispositions. For the six months ended June 30, 2024, amount includes approximately $11.2 million of pre-tax charges related to excess compensation related to the CDK outage, approximately $3.6 million of pre-tax charges related to storm damage, approximately $2.2 million of pre-tax charges for severance and long-term compensation expense and approximately $1.0 million of non-cash pre-tax impairment charges related to property and equipment. Due to rounding, segment level financial data may not sum to consolidated results.

Previous wording

(3)For the three months ended March 31, 2025, amount includes approximately $0.2 million of pre-tax gain on sale of EchoPark property and approximately $0.2 million of pre-tax impairment charges related to property and equipment. For the three months ended March 31, 2024, amount includes approximately $2.1 million of pre-tax charges for severance and long-term compensation expense, and approximately $2.1 million of pre-tax charges related to closed store accrued expenses related to the indefinite suspension of operations at certain EchoPark locations. Due to rounding, segment level financial data may not sum to consolidated results.

Current wording

(3)For the six months ended June 30, 2025, amount includes approximately $1.0 million of pre-tax gain on sale of real estate and approximately $0.2 million of non-cash pre-tax property and equipment impairment charges for real estate held for sale. For the six months ended June 30, 2024, amount includes approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.7 million of pre-tax charges for severance and long-term compensation expense, approximately $2.2 million of pre-tax charges related to closed store accrued expenses related to the indefinite suspension of operations at certain EchoPark locations, approximately $1.4 million of non-cash pre-tax impairment charges related to property and equipment, approximately $0.6 million of pre-tax gain on acquisitions and dispositions and approximately $0.4 million of pre-tax charges related to excess compensation related to the CDK outage. Due to rounding, segment level financial data may not sum to consolidated results.

Previous wording

(4)For the three months ended March 31, 2025, amount includes approximately $0.9 million of pre-tax charges related to disposition losses and approximately $1.1 million of pre-tax impairment charges related to property, equipment, and right-of-use assets. Due to rounding, segment level financial data may not sum to consolidated results.

Current wording

(4)For the six months ended June 30, 2025, amount includes approximately $0.9 million of pre-tax charges related to dispositions, approximately $0.4 million of non-cash pre-tax property, equipment and right-of-use asset impairment charges, and approximately $7.2 million of non-cash pre-tax franchise asset impairment charges. Due to rounding, segment level financial data may not sum to consolidated results.

Previous wording

For the Franchised Dealerships Segment, SG&A expenses for the three months ended March 31, 2025 included approximately $0.9 million of pre-tax charges related to storm damage, approximately $0.3 million of pre-tax charges related to disposition losses, and a $30.0 million pre-tax benefit related to cyber insurance proceeds from the CDK outage. For the EchoPark Segment, SG&A expenses for the three months ended March 31, 2025 included approximately $0.2 million of pre-tax gain on sale of property. For the Powersports Segment, SG&A expenses for the three months ended March 31, 2025 included approximately $0.9 million of pre-tax charges related to disposition losses. For the Franchised Dealerships Segment, SG&A expenses for the three months ended March 31, 2024 included approximately $2.2 million of pre-tax charges for severance and long-term compensation expense. For the EchoPark Segment, SG&A expenses for the three months ended March 31, 2024 also included approximately $2.1 million of pre-tax charges for severance and long-term compensation expense and approximately $2.1 million of pre-tax charges related to closed store accrued expenses in connection with the indefinite suspension of operations at certain EchoPark locations.

Current wording

For the Franchised Dealerships Segment, SG&A expenses for the three months ended June 30, 2025 included approximately $4.1 million of pre-tax charges related to storm damage, and approximately $2.4 million of pre-tax charges related to dispositions, offset partially by a $10.0 million pre-tax benefit related to cyber insurance proceeds from the CDK outage. For the Franchised Dealerships Segment, SG&A expenses for the three months ended June 30, 2024 included approximately $9.2 million of pre-tax charges related to excess compensation as a result of the CDK outage and approximately $3.6 million of pre-tax charges related to storm damage. For the EchoPark Segment, SG&A expenses for the three months ended June 30, 2025 included approximately $0.8 million of pre-tax gain on sale of real estate. For the EchoPark Segment, SG&A expenses for the three months ended June 30, 2024 included approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $0.7 million of pre-tax charges for severance and long-term compensation expense, approximately $0.6 million of pre-tax gain on real estate dispositions, and approximately $0.4 million of pre-tax charges related to excess compensation as a result of the CDK outage.

Previous wording

Overall SG&A expenses decreased in dollar amount and decreased as a percentage of gross profit, primarily due to a $30.0 million benefit from cyber insurance proceeds recorded in other SG&A expenses. Compensation expense increased in dollar amount and decreased as a percentage of gross profit, based on the variable nature of our sales associate pay plans. Advertising expense increased in dollar amount and was flat as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to the sale of several properties that were previously subleased. Other SG&A expenses decreased in both dollar amount and as a percentage of gross profit, primarily due to the benefit of cyber insurance proceeds.

Current wording

Overall SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher compensation expense as a result of higher gross profit levels, partially offset by a $40.0 million benefit from cyber insurance proceeds recorded in other SG&A expenses. Compensation expense increased in dollar amount and decreased as a percentage of gross profit, based on the variable nature of our sales associate pay plans. Advertising expense increased in dollar amount and was flat as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to the increase in leased dealerships in Q4 2024. Other SG&A expenses decreased in both dollar amount and as a percentage of gross profit, primarily due to the benefit of cyber insurance proceeds.

Previous wording

Depreciation and amortization expense increased approximately $3.4 million, or 9%, during the three months ended March 31, 2025, due primarily to completed construction projects and purchases of fixed assets for use in our franchised dealerships.

Current wording

Depreciation and amortization expense increased approximately $3.5 million, or 9%, and $7.2 million, or 10%, during the three and six months ended June 30, 2025, due primarily to completed construction projects and purchases of fixed assets for use in our franchised dealerships.

Previous wording

We typically maintain a floor plan deposit balance (as shown in the table below under the heading “Liquidity and Capital Resources”) that earns interest income based on the used floor plan interest rate, effectively reducing net used vehicle floor plan interest expense. The floor plan deposit balance was $365.0 million and $320.0 million as of March 31, 2025 and March 31, 2024, respectively, as well as $340.0 million and $345.0 million as of December 31, 2024 and December 31, 2023, respectively. Our interest expense, floor plan fluctuates with changes in our outstanding borrowings and associated interest rates, which are variable based on one-month Term SOFR or the U.S. prime rate, plus credit spreads specified in the related agreements.

Current wording

We typically maintain a floor plan deposit balance (as shown in the table below under the heading “Liquidity and Capital Resources”) that earns interest income based on the used floor plan interest rate, effectively reducing net used vehicle floor plan interest expense. The floor plan deposit balance was $100.0 million and $400.0 million as of June 30, 2025 and June 30, 2024, respectively, and was $340.0 million and $345.0 million as of December 31, 2024 and December 31, 2023, respectively. Our interest expense, floor plan fluctuates with changes in our outstanding borrowings and associated interest rates, which are variable based on one-month Term SOFR or the U.S. prime rate, plus credit spreads specified in the applicable agreements.