ASBURY AUTOMOTIVE GROUP INC

Previous wording

•adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver and market their vehicles successfully;

Current wording

•adverse conditions affecting the vehicle manufacturers whose brands we sell, and their ability to design, manufacture, deliver and market their vehicles successfully, including competitive pressures from potential new Chinese vehicle manufacturers;

Previous wording

•failure of our management information systems and our ability to successfully transition between key information systems, including our ability to successfully incorporate new technologies and continue our transition to Tekion, a dealer management systems ("DMS") provider, from CDK, another DMS provider;

Current wording

•our ability to incorporate and integrate new technologies and key information systems with our existing operations, including our ability to successfully transition to and integrate our operations with Tekion, a dealer management systems ("DMS") provider, from CDK, another DMS provider;

Previous wording

•macroeconomic and geopolitical conditions, including global trade relations, changes to consumer and business confidence, international tensions, hostilities and instability, including the present dispute between the United States and Iran, a slowdown in U.S. or global economic growth, higher rates of unemployment, changes in interest rates, inflation, and market volatility;

Current wording

•macroeconomic and geopolitical conditions, including global trade relations, changes to consumer and business confidence, international tensions, hostilities and instability, including the conflicts between the United States and Iran and between Russia and Ukraine related disruptions to global energy supplies and shipping routes, which have contributed to higher fuel prices and may affect consumer demand and preferences for the vehicles we sell, a slowdown in U.S. or global economic growth, higher rates of unemployment, changes in interest rates, inflation, and market volatility;

Previous wording

Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" below and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. We urge you to carefully consider those factors.

Current wording

Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 and "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" above and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. We urge you to carefully consider those factors.

Previous wording

We are one of the largest automotive retailers in the United States. As of June 30, 2026, through our Dealerships segment, we owned and operated 202 new vehicle franchises (158 dealership locations), representing 34 brands of automobiles, within 14 states. We also operated 37 collision centers, and Total Care Auto, Powered by Asbury ("TCA"), our F&I product provider. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts and collision repair service; and finance and insurance products. The finance and insurance products are provided by both TCA and independent third parties. The F&I products offered by TCA are sold through affiliated dealerships. For the six months ended June 30, 2026, our new vehicle revenue brand mix consisted of 41% imports, 33% luxury and 26% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.

Current wording

We are one of the largest automotive retailers in the United States. As of September 30, 2026, through our Dealerships segment, we owned and operated 197 new vehicle franchises (155 dealership locations), representing 34 brands of automobiles, within 14 states. We also operated 37 collision centers and TCA, our F&I product provider. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts and collision repair service; and finance and insurance products. The finance and insurance products are provided by both TCA and independent third parties. The F&I products offered by TCA are sold through affiliated dealerships. For the nine months ended September 30, 2026, our new vehicle revenue brand mix consisted of 41% imports, 33% luxury and 26% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.

Previous wording

In addition, our ability to sell certain new and used vehicles can be negatively impacted by a number of factors, some of which are outside of our control. Certain manufacturers continue to be hampered by the lack of availability of parts and key components from suppliers which has impacted new vehicle inventory levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these production slowdowns or when normalized production will resume at these manufacturers.

Current wording

In addition, our ability to sell certain new and used vehicles can be negatively impacted by a number of factors, some of which are outside of our control. Certain manufacturers continue to be hampered by the lack of availability of parts and key components from suppliers which have impacted new vehicle inventory levels and availability of certain parts. We cannot predict with any certainty how long the automotive retail industry will continue to be subject to these production slowdowns or when normalized production will resume at these manufacturers.

Previous wording

The Company's operating results for thethree and six months ended June 30, 2026 include the results of the Herb Chambers Businesses acquired in the third quarter of 2025. Accordingly, thethree and six months ended June 30, 2026 includes increases in revenue and gross profit related to the Herb Chambers Businesses, which have been offset by declines in revenues and gross profits due to several dealership divestitures in the second through fourth quarters of 2025 and February 2026.

Current wording

The Company's operating results for thethree and nine months ended September 30, 2026 include the results of the Herb Chambers Businesses acquired on July 21, 2025. Accordingly, the nine months ended September 30, 2026 include increases in revenue and gross profit related to the Herb Chambers Businesses, which are offset by declines in revenues and gross profits due to several dealership divestitures in the second through fourth quarters of 2025 and February 2026. Thethree months ended September 30, 2026 reflect declines in revenue and gross profit related to the aforementioned dealership divestitures.

Previous wording

Income from operations during the three months ended June 30, 2026 decreased by $37.9 million (15%) compared to the three months ended June 30, 2025, due to a $30.9 million (7%) increase in selling, general and administrative expenses, a $4.2 million increase in asset impairment expense, and a $4.0 million (21%) increase in depreciation and amortization expense, partially offset by a $1.2 million increase in gross profit.

Current wording

Income from operations during the three months ended September 30, 2026 decreased by $35.9 million (15%) compared to the three months ended September 30, 2025, due to a $71.0 million (9%) decrease in gross profit and a $2.5 million (12%) increase in depreciation and amortization expense, partially offset by a $25.9 million (5%) decrease in selling, general and administrative expenses and an $11.7 million decrease in asset impairment expense.

Previous wording

Total other expenses, net increased by $14.5 million (27%) during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, as a result of a $5.9 million decrease in gain on dealership divestitures, net, a $5.1 million (12%) increase in other interest expense, net, and a $3.5 million (19%) increase in floor plan interest expense. Income before income taxes decreased $52.5 million (26%) to $151.3 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Overall, net income decreased by $38.2 million (25%) during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Current wording

Total other expenses, net increased by $25.2 million (60%) during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, as a result of a $35.1 million decrease in gain on dealership divestitures, net, offset by a $6.2 million (23%) decrease in floor plan interest expense and a $3.7 million (7%) decrease in other interest expense, net. Income before income taxes decreased $61.1 million (31%) to $139.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. Overall, net income decreased by $42.0 million (29%) during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026, new vehicle revenue increased by $26.3 million (1%) due to an $819 (2%) increase in revenue per new vehicle sold, partially offset by a decrease in new vehicle units sold of 192 as compared to the three months ended June 30, 2025. Same store new vehicle revenue decreased by $133.1 million (6%), primarily driven by a decrease in new vehicle units sold of 2,689 (6%), partially offset by a $121 increase in revenue per new vehicle sold as compared to the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, new vehicle revenue decreased by $235.9 million (9%) due to a decrease in new vehicle units sold of 4,334 (9%) and a $181 decrease in revenue per new vehicle sold as compared to the three months ended September 30, 2025. Same store new vehicle revenue decreased by $195.3 million (8%) due to a decrease in new vehicle units sold of 3,860 (8%) and a $134 increase in revenue per new vehicle sold as compared to the three months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026, new vehicle gross profit and same store new vehicle gross profit decreased by $21.8 million (14%) and $34.7 million (24%), respectively. Same store new vehicle gross margin for the three months ended June 30, 2026 decreased 128 basis points to 5.6%. A 101 basis point decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued softening of the historically high new vehicle margins seen in recent years, combined with affordability constraints which have also served to compress margins.

Current wording

For the three months ended September 30, 2026, new vehicle gross profit and same store new vehicle gross profit decreased by $32.0 million (20%) and $29.7 million (20%), respectively. Same store new vehicle gross margin for the three months ended September 30, 2026 decreased 79 basis points to 5.6%. A 74 basis point decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued softening of the historically high new vehicle margins seen in recent years, combined with affordability constraints which have also served to compress margins.

Previous wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended June 30, 2026 was approximately 16.2 million which increased slightly as compared to approximately 16.1 million during the three months ended June 30, 2025. The start of the second quarter of 2025 reflected surging demand due to tariff uncertainty but tapered off in the latter half of the quarter. The second quarter of 2026 saw a sluggish start to new vehicle sales due to climbing gas prices; however, demand rebounded as consumers returned to the market likely boosted by lowering gas prices, manufacturer incentives and strength in the equity markets in the second quarter of 2026 despite the broader economic uncertainty. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Current wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended September 30, 2026 was approximately 16.4 million which decreased as compared to approximately 16.6 million during the three months ended September 30, 2025. New vehicle sales decreased during the three months ended September 30, 2026 due to challenging economic conditions, including higher gas prices and lower EV unit sales during the three months ended September 30, 2026 as compared to the prior year which saw a surge in EV unit sales due to federal tax incentives expiring on September 30, 2025. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Previous wording

For the three months ended June 30, 2026, used vehicle revenue decreased by $49.8 million (4%) compared to the same period of the prior year, due to a $35.4 million (3%) decrease in used vehicle retail revenue and a $14.4 million (9%) decrease in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $130.5 million (11%), due to a $104.4 million (10%) decrease in used vehicle retail revenue and a $26.2 million (18%) decrease in used vehicle wholesale revenue. Total used vehicle retail unit sales decreased by 9% on an all store basis and by 14% on a same store basis during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. While revenue per used vehicle retailed increased on both an all store and same store basis by 6% and 4%, respectively, the decrease in unit volumes on both an all store and same store basis negatively impacted used vehicle revenue for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Used vehicle revenue per vehicle sold increased due to the continued tight inventory levels heightened by consumers moving to the used vehicle market due to higher new vehicle prices. Used vehicle unit volumes continued to be negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage.

Current wording

For the three months ended September 30, 2026, used vehicle revenue decreased by $118.1 million (8%) compared to the same period of the prior year, due to a $72.9 million (6%) decrease in used vehicle retail revenue and a $45.2 million (24%) decrease in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $83.1 million (6%), due to a $46.9 million (26%) decrease in used vehicle wholesale revenue and a $36.3 million (3%) decrease in used vehicle retail revenue. Total used vehicle retail unit sales decreased by 8% on an all store basis and by 6% on a same store basis during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. While revenue per used vehicle retailed increased on both an all store and same store basis by 3% and 3%, respectively, the decrease in unit volumes on both an all store and same store basis negatively impacted used vehicle revenue for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. Used vehicle revenue per vehicle sold increased due to the continued tight inventory levels heightened by consumers moving to the used vehicle market due to higher new vehicle prices. Used vehicle unit volumes continued to be negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage.

Previous wording

For the three months ended June 30, 2026, both the total company and same store used vehicle retail gross profit margin increased by 54 basis points and 34 basis points, respectively, as compared to the three months ended June 30, 2025. The used vehicle retail gross margin increased from 5.5% to 6.1% on an all store basis and increased from 5.6% to 6.0% on a same store basis. We attribute the increases in used vehicle retail gross profit margins to our continued strong execution around sourcing and disciplined focus on profitability over units sold. Additionally, the increase in used vehicle gross margins on a total company basis was driven by the addition of the Herb Chambers Dealershipsin thethree months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, both the total company and same store used vehicle retail gross profit margin increased by 35 basis points and 34 basis points, respectively, as compared to the three months ended September 30, 2025. The used vehicle retail gross margin increased from 5.0% to 5.4% on an all store basis and increased from 5.0% to 5.4% on a same store basis. Used vehicle retail gross profit increased $0.4 million (1%) for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 and increased $1.9 million (3%) on a same store basis for the same period. On a total company and same store basis, our gross profit per used vehicle retailed increased by $157 (10%) and $158 (10%), respectively, when compared to the prior year period. We attribute the increases in used vehicle retail gross profit margins to our continued strong execution around sourcing and disciplined focus on profitability.

Previous wording

The $33.1 million (6%) increase in parts and service revenue was primarily due to a $26.2 million (8%) increase in customer pay revenue and a $9.5 million (10%) increase in warranty revenue, partially offset by a $1.5 million (2%) decrease in collision revenue and a $1.1 million (1%) decrease in wholesale parts revenue. Same store parts and service revenue increased by $5.3 million (1%) to $550.7 million during the three months ended June 30, 2026 from $545.4 million during the three months ended June 30, 2025. The increase in same store parts and service revenue was due to a $5.4 million (2%) increase in customer pay revenue and a $2.5 million (2%) increase in wholesale parts revenue, partially offset by a $2.5 million (4%) decrease in collision revenue. The average age of vehicles continues to grow in 2026 reaching a historically high 13.0 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Current wording

The increase in same store parts and service revenue was primarily due to a $6.6 million (2%) increase in customer pay revenue and a $2.3 million (2%) increase in wholesale parts revenue, partially offset by a $3.2 million (3%) decrease in warranty revenue and a $1.3 million (2%) decrease in collision revenue. The average age of vehicles continues to grow in 2026 reaching a historically high 13.0 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Previous wording

For the three months ended June 30, 2026, total parts and service gross profit increased by $19.4 million (5%) to $374.2 million and same store total parts and service gross profit decreased by $2.6 million (1%) to $322.8 million when compared to the same period of the prior year. The all store increase is primarily due to the Herb Chambers acquisition, offset by store divestitures, while the same store increase is primarily due to increased customer pay and wholesale parts business offset by a decrease in the collision business profitability, which is in line with the increasing trend of aged vehicles.

Current wording

For the three months ended September 30, 2026, total parts and service gross profit decreased by $18.2 million (5%) to $371.0 million and same store total parts and service gross profit decreased by $8.5 million (2%) to $352.6 million when compared to the same period of the prior year. The all store decrease in gross profit is primarily due to a reduction in internal work driven by lower used vehicle unit sales and store divestitures which occurred late 2026 and in the first half of 2026. The same store decrease is primarily due to a decrease in internal work as a result of a reduction in same store used vehicle sales volumes during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.

Previous wording

On a same store basis, F&I revenue, net decreased by $28.3 million (8%) during the six months ended June 30, 2026 when compared to the six months ended June 30, 2025, primarily due to an 11% decrease in total retail units sold, partially offset by a $60 (3%) increase in F&I per vehicle retailed. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all of our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Current wording

On a same store basis, F&I revenue, net decreased by $15.6 million (8%) during the three months ended September 30, 2026 when compared to the three months ended September 30, 2025, primarily due to a 7% decrease in total retail units sold, and a $19 (1%) decrease in F&I per vehicle retailed. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all of our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Previous wording

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the three months ended June 30, 2026, TCA generated $18.8 million of revenue, after dealership eliminations, consisting primarily of earned premiums and $5.4 million of investment income from the investment portfolio. F&I revenue increased by $3.2 million (21%) for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Current wording

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the three months ended September 30, 2026, TCA generated $14.2 million of revenue, after dealership eliminations, consisting primarily of earned premiums and $5.6 million of investment income from the investment portfolio. F&I revenue decreased by $9.4 million (40%) for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Previous wording

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the three months ended June 30, 2026, TCA recorded $12.4 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Current wording

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the three months ended September 30, 2026, TCA recorded $12.1 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Previous wording

We expect to complete the rollout to all of our dealerships in 2026 by offering TCA products on our Herb Chambers platform; however, no assurance can be given that the rollout will be completed with the timeframe contemplated.

Current wording

We completed the rollout to all of our dealerships in October 2026 by offering TCA products at our Herb Chambers Businesses.

Previous wording

On a same store basis, SG&A expense as a percentage of gross profit increased 360 basis points from 62.8% for the three months ended June 30, 2025 to 66.4% for the three months ended June 30, 2026. The increase in SG&A expense as a percentage of gross profit on a same store basis for the three months ended June 30, 2026 is the result of a decrease in gross profit, partially offset by a decrease in SG&A expense for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. On a same store basis, personnel costs decreased by $16.8 million (0.7%) for the three months ended June 30, 2026 as compared to the same period in the prior year due to a reduction in commissions payable on lower gross profits earned during the relevant periods. This was partially offset by an increase in rent and related expense of $6.6 million (1.3%) on a same store basis primarily due to a $5.0 million insurance recovery received in 2025.

Current wording

On a same store basis, SG&A expense as a percentage of gross profit increased 349 basis points from 64.7% for the three months ended September 30, 2025 to 68.2% for the three months ended September 30, 2026. The increase in SG&A expense as a percentage of gross profit on a same store basis for the three months ended September 30, 2026 is the result of a decrease in gross profit, partially offset by a decrease in SG&A expense for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. On a same store basis, personnel costs decreased by $22.5 million (0.1%) for the three months ended September 30, 2026 as compared to the same period in the prior year due to a reduction in commissions payable on lower gross profits earned during the relevant periods. This was partially offset by an increase in other expense of $9.9 million (2.7%) on a same store basis primarily due to the Tekion implementation costs and duplicative DMS costs.

Previous wording

Floor plan interest expense increased by $3.5 million (19%) to $21.6 million during the three months ended June 30, 2026 as compared to $18.1 million for the three months ended June 30, 2025, as a result of higher non-manufacturer floor plan balances in 2026 due to the Herb Chambers acquisition, partially offset by lower non-manufacturer floor plan balances due to store divestitures in 2025 and February 2026.

Current wording

Floor plan interest expense decreased by $6.2 million (23%) to $20.5 million during the three months ended September 30, 2026 as compared to $26.7 million for the three months ended September 30, 2025, as a result of lower interest rates in 2025 and lower floor plan balances in 2026 due to store divestitures in late 2025 and the first half of 2026.

Previous wording

The $14.3 million (28%) decrease in income tax expense was primarily the result of a $52.5 million (26%) decrease in income before income taxes and a benefit for interest income relating to tax overpayments. Our effective tax rate for the three months ended June 30, 2026 was 24.3% compared to 25.0% in the prior year comparative period, which differed from the U.S. statutory rate primarily due to the favorable effects of amended state income tax returns and the aforementioned interest income benefit offset by the unfavorable effects of the shortfall component of equity compensation, which are discrete items, and the unfavorable effects of various permanent tax adjustments such as executive compensation. We estimate our effective tax rate for the year ended December 31, 2026 at approximately 25%. This estimated effective tax rate includes the effects of the tax benefits related to the purchase of transferable tax credits.

Current wording

The $19.2 million (36%) decrease in income tax expense was primarily the result of a $61.1 million (31%) decrease in income before income taxes, a benefit for interest income relating to tax overpayments, and a reduction to the unfavorable effects of the permanent executive compensation tax adjustment. Our effective tax rate for the three months ended September 30, 2026 was 24.4% compared to 26.5% in the prior year comparative period, which differed from the U.S. statutory rate primarily due to the favorable effects of amended state income tax returns and the aforementioned interest income benefit offset by the unfavorable effects of the shortfall component of equity compensation, which are discrete items, and the unfavorable effects of various permanent tax adjustments such as executive compensation. We estimate our effective tax rate for the year ended December 31, 2026 to be approximately 24.8%. This estimated effective tax rate includes the effects of the tax benefits related to the purchase of transferable tax credits.

Previous wording

Total revenue for the six months ended June 30, 2026 decreased by $24.0 million compared to the six months ended June 30, 2025, due to a $79.3 million (3%) decrease in used vehicle revenue, an $11.0 million decrease in new vehicle revenue, and a $6.1 million (2%) decrease in F&I, net revenue, offset by a $72.3 million (6%) increase in parts and service revenue. During the six months ended June 30, 2026, gross profit increased by $3.9 million, driven by a $41.9 million (6%) increase in parts and service gross profit and a $2.2 million (2%) increase in used vehicle gross profit, offset by a $36.4 million (12%) decrease in new vehicle gross profit and a $3.8 million (1%) decrease in F&I gross profit.

Current wording

Total revenue for the nine months ended September 30, 2026 decreased by $411.2 million (3%) compared to the nine months ended September 30, 2025, due to a $246.9 million (4%) decrease in new vehicle revenue, a $197.3 million (5%) decrease in used vehicle revenue, and a $23.9 million (4%) decrease in F&I, net revenue, offset by a $56.9 million (3%) increase in parts and service revenue. During the nine months ended September 30, 2026, gross profit decreased by $67.1 million (3%), driven by a $68.4 million (15%) decrease in new vehicle gross profit, a $20.5 million (4%) decrease in F&I gross profit, and a $1.9 million (1%) decrease in used vehicle gross profit, offset by a $23.7 million (2%) increase in parts and service gross profit.

Previous wording

Income from operations during the six months ended June 30, 2026 decreased by $78.4 million (16%), compared to the six months ended June 30, 2025, primarily due to a $84.9 million (9%) increase in selling, general and administrative expenses and a $7.4 million (19%) increase in depreciation and amortization expense, partially offset by a $10.1 million (71%) decrease in asset impairment expense and a $3.9 million increase in gross profit.

Current wording

Income from operations during the nine months ended September 30, 2026 decreased by $114.3 million (16%) compared to the nine months ended September 30, 2025, primarily due to a $67.1 million (3%) decrease in gross profit, a $59.1 million (4%) increase in selling, general and administrative expenses, and a $9.9 million (17%) increase in depreciation and amortization expense, partially offset by a $21.8 million decrease in asset impairment expense.

Previous wording

Total other expenses, net decreased by $101.0 million (90%) during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily as a result of a $115.7 million increase in gain on dealership divestitures, net, offset by a $10.8 million (13%) increase in other interest expense, net and a $3.8 million (10%) increase in floor plan interest expense. Income before income taxes increased $22.7 million (6%) to $401.9 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Overall, net income increased by $17.6 million (6%) during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Current wording

Total other expenses, net decreased by $75.9 million (49%) during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily as a result of an $80.7 million increase in gain on dealership divestitures, net and a $2.3 million (4%) decrease in floor plan interest expense, offset by a $7.2 million (5%) increase in other interest expense, net. Income before income taxes decreased by $38.4 million (7%) to $541.0 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. Overall, net income decreased by $24.4 million (6%) during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, new vehicle revenue decreased by $11.0 million due to a decrease in new vehicle units sold of 2,406 (3%), partially offset by a $1,358 (3%) increase in revenue per new vehicle sold as compared to the six months ended June 30, 2025. Same store new vehicle revenue decreased by $319.8 million (8%), driven by a decrease in new vehicles sold of 7,033 (9%), partially offset by a $543 (1%) increase in revenue per new vehicle sold as compared to the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, new vehicle revenue decreased by $246.9 million (4%) due to a decrease in new vehicle units sold of 6,740 (5%), partially offset by a $815 (2%) increase in revenue per new vehicle sold as compared to the nine months ended September 30, 2025. Same store new vehicle revenue decreased by $515.2 million (8%), driven by a decrease in new vehicles sold of 10,893 (9%), partially offset by a $395 (1%) increase in revenue per new vehicle sold as compared to the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, new vehicle gross profit and same store new vehicle gross profit decreased by $36.4 million (12%) and $61.6 million (22%), respectively. Same store new vehicle gross margin for the six months ended June 30, 2026 decreased 105 basis points to 5.8%. An 80 basis point decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years, combined with affordability constraints which have also served to compress margins.

Current wording

For the nine months ended September 30, 2026, new vehicle gross profit and same store new vehicle gross profit decreased by $68.4 million (15%) and $91.3 million (21%), respectively. Same store new vehicle gross margin for the nine months ended September 30, 2026 decreased 96 basis points to 5.7%. A 77 basis point decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the softening of historically high new vehicle margins seen in recent years, combined with affordability constraints which have also served to compress margins.

Previous wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the six months ended June 30, 2026 was approximately 15.9 million which decreased as compared to approximately 16.3 million during the six months ended June 30, 2025. The decrease in SAAR period over period was due to higher consumer demand for new vehicles driven by automobile tariff uncertainty in the first and second quarter of 2025 that did not recur in 2026. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Current wording

The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the nine months ended September 30, 2026 was approximately 16.1 million which decreased as compared to approximately 16.4 million during the nine months ended September 30, 2025. The decrease in SAAR period over period was due to higher consumer demand for new vehicles driven by automobile tariff uncertainty in the first and second quarter of 2025 that did not recur in 2026. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.

Previous wording

For the six months ended June 30, 2026, used vehicle revenue decreased by $79.3 million (3%) compared to the same period of the prior year, due to a $54.7 million (2%) decrease in used vehicle retail revenue and a $24.5 million (8%) decrease in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $263.3 million (11%) due to a $208.8 million (10%) decrease in used vehicle retail revenue and a $54.5 million (18%) decrease in used vehicle wholesale revenue. Total used vehicle retail unit sales decreased by 7% on an all store basis and by 13% on a same store basis during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. While revenue per used vehicle retailed increased on both an all store and same store basis by 5% and 3%, respectively, the decrease in unit volumes on both an all store and same store basis negatively impacted used vehicle revenue for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Used vehicle revenue per vehicle sold increased due to the continued tight inventory levels heightened by consumers moving to the used vehicle market due to higher new vehicle prices. Used vehicle unit volumes were negatively impacted by lower new vehicle unit sales which reduced trade-ins, our primary source of used vehicle inventory, and the continued lack of inventory availability, especially in vehicles with lower mileage.

Current wording

For the nine months ended September 30, 2026, used vehicle revenue decreased by $197.3 million (5%) compared to the same period of the prior year, due to a $127.6 million (4%) decrease in used vehicle retail revenue and a $69.7 million (14%) decrease in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $346.5 million (10%) due to a $245.1 million (8%) decrease in used vehicle retail revenue and a $101.3 million (21%) decrease in used vehicle wholesale revenue. Total used vehicle retail unit sales decreased by 8% on an all store basis and by 10% on a same store basis during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. While revenue per used vehicle retailed increased on both an all store and same store basis by 4% and 3%, respectively, the decrease in unit volumes on both an all store and same store basis negatively impacted used vehicle revenue for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. Used vehicle revenue per vehicle sold increased due to the continued tight inventory levels heightened by consumers moving to the used vehicle market due to higher new vehicle prices. Used vehicle unit volumes were negatively impacted by lower new vehicle unit sales which reduced trade-ins, our primary source of used vehicle inventory, and the continued lack of inventory availability, especially in vehicles with lower mileage.

Previous wording

For the six months ended June 30, 2026, the total company and same store used vehicle retail gross profit margin increased by 56 basis points and 46 basis points, respectively, as compared to the six months ended June 30, 2025. The used vehicle retail gross margin increased from 5.4% to 5.9% on an all store basis and increased from 5.5% to 6.0% on a same store basis. We attribute the increases in used vehicle gross profit margins to strong execution around sourcing and disciplined focus on profitability over units sold. Additionally, the increase in used vehicle gross margins on a total company basis was driven by the addition of the Herb Chambers Dealerships in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, the total company and same store used vehicle retail gross profit margin increased by 49 basis points and 40 basis points, respectively, as compared to the nine months ended September 30, 2025. The used vehicle retail gross margin increased from 5.2% to 5.7% on an all store basis and increased from 5.3% to 5.7% on a same store basis. Used vehicle retail gross profit increased $9.5 million (5%) for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 and decreased $1.3 million (1%) on a same store basis for the same period. On a total company and same store basis, our gross profit per used vehicle retailed increased $232 (14%) and $178 (11%), respectively, when compared to the prior year period. This was primarily driven by increases in used vehicle market prices due to the tight used vehicle inventory market. We attribute the increases in used vehicle gross profit margins to strong execution around sourcing and disciplined focus on profitability.

Previous wording

The $72.3 million (6%) increase in parts and service revenue was primarily due to a $51.3 million (8%) increase in customer pay revenue, a $24.6 million (13%) increase in warranty revenue, and a $0.9 million increase in wholesale parts revenue, partially offset by a $4.5 million (3%) decrease in collision revenue. Same store parts and service revenue increased by $7.5 million (1%) to $1,084.3 million during the six months ended June 30, 2026 from $1,076.8 million during the six months ended June 30, 2025. The increase in same store parts and service revenue was due to a $9.1 million (2%) increase in customer pay revenue, a $5.8 million (3%) increase in wholesale parts revenue, and a $1.2 million (1%) increase in warranty revenue, partially offset by an $8.6 million (7%) decrease in collision revenue. The average age of vehicles in 2026 is historically high at 13.0 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Current wording

The $56.9 million (3%) increase in parts and service revenue was primarily due to a $48.1 million (5%) increase in customer pay revenue and a $20.2 million (7%) increase in warranty revenue, partially offset by a $9.1 million (5%) decrease in collision revenue and a $2.3 million (1%) decrease in wholesale parts revenue. Same store parts and service revenue increased by $11.9 million (1%) to $1,697.1 million during the nine months ended September 30, 2026 from $1,685.2 million during the nine months ended September 30, 2025. The increase in same store parts and service revenue was due to a $15.8 million (2%) increase in customer pay revenue and an $8.1 million (3%) increase in wholesale parts revenue, partially offset by a $10.0 million (5%) decrease in collision revenue and a $2.0 million (1%) decrease in warranty revenue. The average age of vehicles in 2026 is historically high at 13.0 years. Consumers are retaining vehicles for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.

Previous wording

For the six months ended June 30, 2026, total parts and service gross profit increased by $41.9 million (6%) to $739.3 million, and same store total parts and service gross profit decreased by $6.3 million (1%) to $632.1 million when compared to the same period of the prior year. The all store increase is primarily due to the Herb Chambers acquisition, offset by store divestitures, while the same store decrease is primarily due to a decrease in internal work and the collision business profitability offset by increased customer pay and warranty volume, which is in line with the increasing trend of aged vehicles.

Current wording

For the nine months ended September 30, 2026, total parts and service gross profit increased by $23.7 million (2%) to $1,110.3 million, and same store total parts and service gross profit decreased by $14.8 million (1%) to $984.7 million when compared to the same period of the prior year. The all store increase is primarily due to the Herb Chambers acquisition, offset by store divestitures, while the same store decrease is primarily due to a decrease in internal work and the collision business profitability offset by increased customer pay and warranty volume, which is in line with the increasing trend of aged vehicles.

Previous wording

On a same store basis, F&I revenue, net decreased by $9.0 million (5%) during the three months ended June 30, 2026 when compared to the three months ended June 30, 2025, primarily due to a 10% decrease in total retail units sold, partially offset by a $113 (5%) increase in F&I per vehicle retailed. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all of our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Current wording

On a same store basis, F&I revenue, net decreased by $43.9 million (8%) during the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025, primarily due to a 9% decrease in total retail units sold, partially offset by a $31 (1%) increase in F&I per vehicle retailed. F&I revenue, net was negatively impacted by the deferral of commission revenue on the sale of TCA products, which we continue to roll out to all of our stores, as compared to the immediate revenue recognition on the sale of third party F&I products. In addition, customers continue to look for ways to manage lower monthly payments in a high interest rate environment.

Previous wording

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the six months ended June 30, 2026, TCA generated $44.0 million of revenue, after dealership eliminations, consisting primarily of earned premiums and $10.7 million of investment income from the investment portfolio. F&I revenue decreased by $2.6 million (6%) for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 due to the continued roll-out of TCA products across Asbury dealerships resulting in the deferral of F&I revenue over the TCA contract term as opposed to the immediate recognition of revenue associated with third-party F&I product sales.

Current wording

Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the nine months ended September 30, 2026, TCA generated $58.2 million of revenue, after dealership eliminations, consisting primarily of earned premiums and $16.3 million of investment income from the investment portfolio. F&I revenue decreased by $12.0 million

Previous wording

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the six months ended June 30, 2026, TCA recorded $24.6 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Current wording

Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the nine months ended September 30, 2026, TCA recorded $36.7 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.

Previous wording

We expect to complete the rollout to all of our dealerships in 2026 by offering TCA products on our Herb Chambers platform; however, no assurance can be given that the rollout will be completed with the timeframe contemplated.

Current wording

We completed the rollout to all of our dealerships in October 2026 by offering TCA products at our Herb Chambers Businesses.

Previous wording

SG&A expense as a percentage of gross profit increased 557 basis points from 63.1% for the six months ended June 30, 2025 to 68.7% for the six months ended June 30, 2026. The increase in SG&A as a percentage of gross profit on a total company basis during the six months ended June 30, 2026 is primarily due to the relatively flat gross profit for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 and an increase in SG&A expense driven by the Herb Chambers Businesses and offset by store divestitures in 2025 and the first quarter of 2026.

Current wording

SG&A expense as a percentage of gross profit increased 461 basis points from 64.0% for the nine months ended September 30, 2025 to 68.6% for the nine months ended September 30, 2026. The increase in SG&A as a percentage of gross profit on a total company basis during the nine months ended September 30, 2026 is the result of a decrease in gross profit for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 and an increase in SG&A expense driven by the Herb Chambers Businesses and offset by store divestitures in 2025 and the first quarter of 2026.

Previous wording

On a same store basis, SG&A expense as a percentage of gross profit increased 495 basis points from 62.6% for the six months ended June 30, 2025 to 67.5% for the six months ended June 30, 2026. The increase in SG&A expense as a percentage of gross profit on a same store basis for the six months ended June 30, 2026 is the result of a decrease in gross profit, partially offset by a decrease in SG&A expense for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. On a same store basis, personnel costs decreased by $32.9 million (0.9%) for the six months ended June 30, 2026 as compared to the same period in the prior year due to a reduction in commissions payable on lower gross profits earned during the relevant periods. In addition, rent and related expense increased on a same store basis by $21.4 million (2.0%) primarily due to a $15.0 million insurance recovery received in the first half of 2025 and $3.8 million in costs associated with weather events. In addition, other expense increased on a same store basis by $7.8 million (1.9%) primarily due to the Tekion implementation costs and duplicative DMS costs.

Current wording

On a same store basis, SG&A expense as a percentage of gross profit increased 443 basis points from 63.3% for the nine months ended September 30, 2025 to 67.8% for the nine months ended September 30, 2026. The increase in SG&A expense as a percentage of gross profit on a same store basis for the nine months ended September 30, 2026 is the result of a decrease in gross profit, partially offset by a decrease in SG&A expense for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. On a same store basis, personnel costs decreased by $55.4 million (0.6%) for the nine months ended September 30, 2026 as compared to the same period in the prior year due to a reduction in commissions payable on lower gross profits earned during the relevant periods. In addition, rent and related expense increased on a same store basis by $20.1 million (1.3%) primarily due to a $15.0 million insurance recovery received in the first half of 2025 and $3.8 million in costs associated with weather events in 2026. In addition, other expense increased on a same store basis by $17.7 million (2.2%) primarily due to the Tekion implementation costs and duplicative DMS costs.

Previous wording

During the six months ended June 30, 2026, we recognized asset impairment charges of $4.2 million related to a dealership that met the criteria to be reflected as assets held for sale in June 2026, and whose franchise rights carrying value exceeded the Company's estimate of the franchise rights fair value less costs to sell.

Current wording

During the nine months ended September 30, 2026, we recognized asset impairment charges of $4.2 million related to a dealership that met the criteria to be reflected as assets held for sale in June 2026, and whose franchise rights carrying value exceeded the Company's estimate of the franchise rights fair value less costs to sell.