SONIC AUTOMOTIVE INC
For the period ended Dec 31, 2025. Filed Feb 23, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 23, 2026
SAH$61.71-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-19.
0001043509-25-000003
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-23.
0001628280-26-010570
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 273 previous paragraphs and 251 current paragraphs.
145 unchanged; 80 reworded; 21 added; 48 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 53 previous and 53 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
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. We estimate the disruption from the CDK outage negatively impacted reported income before taxes by approximately $47.2 million during 2024 which includes approximately $13.4 million in additional compensation expenses incurred as a result of the incident. 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 and $40.0 million in pre-tax income from cyber insurance proceeds during 2025, which were recorded as a reduction to selling, general and administrative expenses.
Current report
Same store retail new vehicle revenue increased 19% in 2025, primarily driven by a 11% increase in retail new vehicle unit sales volume, coupled with a 7% increase in retail new vehicle average selling price. Retail new vehicle gross profit increased 24% in 2025, as a result of the increase in retail new vehicle unit sales volume and increase in retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit increased $319 per unit, or 12%, to $3,032 per unit, due primarily to the increase in retail new vehicle unit sales volume. On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 140 days as of December 31, 2025, compared to 178 days as of December 31, 2024, varying based on manufacturer production levels and consumer demand.
Current report
Reported retail used vehicle revenue increased 70% in 2025, primarily driven by a 54% increase in retail used vehicle unit sales volume, coupled with a 10% increase in retail used vehicle average selling price. Reported retail used vehicle gross profit increased 28% in 2025, as a result of higher retail used vehicle unit sales volume. Reported retail used vehicle gross profit per unit decreased $417 per unit, or 17%, to $1,980 per unit, primarily due to higher inventory costs.
Current report
Reported Fixed Operations revenue increased 12% and Fixed Operations gross profit increased 15% in 2025, driven primarily by higher repair order volume as a result of acquisitions. Fixed Operations gross margin increased 150 basis points to 47.5% in 2025, driven primarily by an increase in warranty revenue contribution and customer pay gross margin.
Current report
Reported F&I revenue increased 15% in 2025, driven primarily by a 33% increase in combined retail new and used vehicle unit sales volume, slightly offset by a 12% decrease in F&I gross profit per retail unit. F&I gross profit per retail unit decreased $133 per unit, or 12%, to $959 per unit in 2025.
Current report
Same store F&I revenue increased 16% in 2025, driven primarily by a 24% increase in combined retail new and used vehicle unit sales volume, offset partially by a 5% decrease in F&I gross profit per retail unit. F&I gross profit per retail unit decreased $54 per unit, or 5%, to$1,019 per unit in 2025.
Current report
Note: Rounding may cause the sum of percentages to differ from the totals shown.
Current report
Same Store Retail used vehicle revenue increased approximately $92.7 million, or 3%, driven primarily by a 3% increase in retail used vehicle average selling price. Retail used vehicle gross profit increased approximately $3.1 million, or 2%, primarily driven by a $25 per unit, or 2% increase in retail used vehicle gross profit per unit.
Current report
Same store finance contract revenue increased 8%, primarily due to a 6% increase in gross profit per finance contract and a 2% increase in finance contract volume. The increase in finance contract volume is due to a 1% increase in total retail unit sales and a 30 basis point increase in the finance contract penetration rate. Service contract revenue increased 7%, primarily due to a 3% increase in gross profit per service contract and a 4% increase in service contract volume. The increase in service contract volume is due to a 1% increase in total retail unit sales and a 100 basis point increase in the service contract penetration rate. Other aftermarket contract revenue increased 2%, driven primarily by a 2% increase in other aftermarket contract volume. The increase in other aftermarket contract volume is due to a 1% increase in total retail unit sales and a 70 basis point increase in the other aftermarket contract penetration rate.
Current report
Same store retail new vehicle revenue increased 19%, due to a 11% increase in retail new vehicle unit sales volume and a 7% increase in retail new vehicle average selling price. Same store retail new vehicle gross profit increased approximately $2.7 million, or 24%, as a result of higher retail new vehicle unit sales volume and higher retail new vehicle gross profit per unit. Same store retail new vehicle gross profit per unit increased $319 per unit, or 12%, to $3,032 per unit.
Current report
Same store F&I revenue increased approximately $1.1 million, or 16%, primarily due to a 24% increase in total combined retail new and used vehicle unit sales volume, offset partially by a 5% decrease in F&I gross profit per retail unit. F&I gross profit per retail unit decreased $54 per unit, or 5%, to $1,019 per unit, primarily due to lower gross profits per finance and service contracts and decreased penetration rates for service and aftermarket contracts, offset partially by higher gross profit per aftermarket contract and an increase in finance contract penetration rate.
Current report
Same store finance contract revenue increased 20%, primarily due to a 28% increase in finance contract volume, offset partially by a 6% decrease in gross profit per finance contract. The increase in finance contract volume is driven by a 24% increase in total retail unit sales volume and a 140 basis point increase in the finance contract penetration rate. Service contract revenue increased 5%, primarily due to a 21% increase in service contract volume, offset partially by a 13% decrease in gross profit per service contract. The increase in service contract unit sales volume is driven by a 24% increase in total retail unit sales volume, offset partially by a 60 basis point decrease in the service contract penetration rate. Other aftermarket contract revenue increased 45%, primarily due to a 20% increase in aftermarket contract volume and a 21% increase in gross profit per other aftermarket contract. The increase in aftermarket contract volume is driven by a 24% increase in total retail unit sales volume, offset partially by a 110 basis point decrease in aftermarket contract penetration rate.
Current report
Consolidated total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to a decrease in compensation expense as a percent of gross profit as a result of higher gross profit contribution from Fixed Operations and F&I activities, which generally leverage SG&A expenses more effectively. Compensation expense increased in dollar amount due primarily to acquisitions, an increase in overall retail activity and higher medical expenses, and decreased as a percentage of gross profit as a result of higher overall gross profit and favorable gross profit mix shifts. Advertising expense increased in both dollar amount and 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 as a result of acquisitions from the fourth quarter of 2024 as well as newly acquired leased dealerships during 2025. Other SG&A expenses increased in dollar amount primarily due to higher information technology and maintenance expenses. However, other SG&A expenses decreased as a percentage of gross profit as a result of higher overall gross profit levels.
Current report
The following table sets forth information related to our Franchised Dealerships Segment reported SG&A expenses:
Current report
The Franchised Dealerships Segment’s total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher levels of gross profit that better leverage fixed expenses. Compensation expense increased in dollar amount due primarily to acquisitions, an increase in overall retail activity and higher medical expenses, and decreased as a percentage of gross profit as a result of higher overall gross profit and favorable gross profit mix shifts in Fixed Operations and F&I. Advertising expense increased in both dollar amount and 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 properties as a result of acquisitions of franchised dealerships. Other SG&A expenses increased in dollar amount primarily due to higher IT expenses. However, other SG&A expenses decreased as a percentage of gross profit as a result of higher overall gross profit levels.
Current report
The EchoPark Segment’s total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher gross profit contribution from F&I activities, which generally leverage SG&A expenses more effectively. Compensation expense increased in dollar amount due primarily to an increase in overall retail activity, and decreased as a percentage of gross profit as a result of higher overall gross profit. Advertising expense increased in dollar amount and decreased and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions and higher overall gross profit. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to a decrease in rental income and an increase in overall gross profit. Other SG&A expenses decreased in both dollar amount and as a percentage of gross profit primarily due to a decrease in outside contractor expenses.
Current report
The following table sets forth information related to our Powersports Segment reported SG&A expenses:
Current report
Interest expense, other, net decreased $7.9 million, or 7%, primarily related to lower outstanding balances on our mortgage notes and a lower interest rate environment throughout 2025 as compared to 2024.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The bill contains a range of tax reforms affecting businesses, including the immediate expensing of research and development expenditures, 100% bonus depreciation on qualified property, and various other provisions effective in tax years 2026 through 2029. After evaluating the OBBBA’s provisions, we have determined that the impact of these changes on the consolidated financial statements for the current reporting period is immaterial. Provisions taking effect in 2026 will affect the deductibility of executive compensation and charitable contributions and will contribute to a higher overall income tax rate. We will continue to monitor future guidance and assess any additional potential implications for subsequent periods.
Current report
All of the $149.9 million in gross capital expenditures in 2025 was funded through existing cash balances. As of December 31, 2025, commitments for facility construction projects and aircraft totaled approximately $20.9 million, nearly all of which is expected to be completed or paid in the next 12 months.
Current report
Note: Due to rounding, segment level financial data may not sum to consolidated results.
Removed paragraphs (48)
Previous report
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”). As a result, we experienced disruptions to our dealer management system (the “DMS”), our customer relationship management system (the “CRM”) and other systems that support sales, inventory and accounting functions (collectively with the DMS and CRM the “Affected Systems”). On June 26, 2024, CDK began restoring access to certain of the Affected Systems. We performed internal risk assessments and data validation procedures on the Affected Systems, and beginning June 30, 2024, we resumed processing transactions in the DMS. As of July 31, 2024, we regained access to all of the Affected Systems, including the CRM and inventory management applications.
Previous report
During the CDK outage, all of our dealerships remained open and operating, utilizing workaround solutions to minimize the disruption caused by the CDK outage. However, the lack of access to the Affected Systems disrupted the efficient execution of our dealership operations and affected our ability to manage inventory, track customer leads, deliver vehicles and complete transactions with customers in a typical transaction timeframe. Despite the workarounds employed by the Company, the CDK outage significantly impaired our ability to sell both new and used vehicles within both our Franchised Dealership and EchoPark Segments in the second and third fiscal quarters of 2024. The lower volume of vehicles sold as a result of the CDK outage also negatively impacted F&I revenue within both segments during these periods. Additionally, our Fixed Operations revenue within the Franchised Dealerships Segment was negatively impacted by the lack of access to certain systems used to process services during these periods. We estimate the disruption from the CDK outage negatively impacted reported income before taxes by approximately $47.2 million during 2024 which includes approximately $13.4 million in additional compensation expenses incurred as a result of the incident.
Previous report
Same store retail new vehicle revenue decreased 9% in 2024, primarily driven by a 14% decrease in retail new vehicle unit sales volume, offset partially by a 5% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased 33% in 2024, as a result of lower retail new vehicle unit sales volume and lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $743 per unit, 22%, to $2,687 per unit, 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 178 days as of December 31, 2024, compared to 183 days as of December 31, 2023. We believe that the level of new vehicle inventory days’ supply in our Powersports Segment should be in the 90- to 120-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).
Previous report
Reported retail used vehicle revenue increased 14% in 2024, primarily driven by a 16% increase in retail used vehicle average selling price. Retail used vehicle gross profit decreased 2% in 2024, as a result of lower retail used vehicle unit sales volume. Retail used vehicle gross profit per unit increased $3 per unit, or flat, to $2,397 per unit.
Previous report
Reported Fixed Operations revenue decreased 4% and Fixed Operations gross profit decreased 6% in 2024, driven primarily by lower repair order volume. Fixed Operations gross margin decreased 100 basis points to 46.0% in 2024, driven primarily by a decrease in customer pay revenue contribution and lower customer pay gross margin.
Previous report
Same store F&I revenue decreased 3% in 2024, driven primarily by an 11% decrease in combined retail new and used vehicle unit sales volume, offset partially by a 9% increase in F&I gross profit per retail unit. F&I gross profit per retail unit increased$89 per unit, or 9%, to$1,106 per unit in 2024.
Previous report
Retail used vehicle revenue decreased approximately $115.7 million, or 4%, driven primarily by a 6% decrease in retail used vehicle average selling price, partially offset by a 2% increase in retail used vehicle unit sales volume. Retail used vehicle gross profit decreased approximately $11.7 million, or 7%, driven primarily by a $154 per unit, or 9% decrease in retail used vehicle gross profit per unit, partially offset by a 2% increase in retail used vehicle unit sales volume during 2024.
Previous report
On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 31 and 29 days as of December 31, 2024 and 2023, respectively.
Previous report
F&I revenue increased 2%, due to an increase in combined retail new and used vehicle unit sales volume, offset partially by lower F&I gross profit per retail unit. F&I gross profit per retail unit decreased $36 per unit to $2,377 per unit, primarily due to a decrease in gross profit per finance contract and lower service contract and other aftermarket contract penetration rates.
Previous report
Finance contract revenue increased 1%, primarily due to a 130-basis point increase in the combined new and used vehicle finance contract penetration rate. Service contract revenue increased 4%, primarily due to a 2% increase in gross profit per service contract, offset partially by a 90-basis point decrease in the service contract penetration rate. Other aftermarket contract revenue increased 4%, driven primarily by a 5% increase in gross profit per other aftermarket contract, offset partially by a 1% decrease in the other aftermarket contract volume.
Previous report
Same store retail new vehicle revenue decreased 9%, due primarily to a 14% decrease in retail new vehicle unit sales volume, partially offset by an 5% increase in retail new vehicle average selling price. Same store retail new vehicle gross profit decreased approximately $5.4 million, or 33%, as a result of lower retail new vehicle unit sales volume and lower retail new vehicle gross profit per unit. Same store retail new vehicle gross profit per unit decreased $743 per unit, or 22%, to $2,687 per unit, due primarily to higher inventory invoice costs and changes in brand mix.
Previous report
Same store F&I revenue decreased approximately $0.2 million, or 3%, primarily due to a 11% decrease in total combined retail new and used vehicle unit sales volume, offset partially by a 9% increase in F&I gross profit per retail unit. F&I gross profit per retail unit increased $89 per unit, or 9%, to $1,106 per unit, primarily due to an increase in the finance contract penetration rates.
Previous report
Same store finance contract revenue decreased 11%, primarily due to lower retail new and used vehicle unit sales volume, offset partially by a 160-basis point increase in the combined new and used vehicle finance contract penetration rate. Same store service contract revenue increased 24%, primarily due to a 40% increase in gross profit per service contract, offset partially by a 20-basis point decrease in the service contract penetration rate and a 11% decrease in retail new and used vehicle service contract unit sales volume. Same store other aftermarket contract revenue decreased 32%, driven primarily by a 22% decrease in gross profit per other aftermarket contract and a lower retail new and used vehicle unit sales volume.
Previous report
Interest expense, other, net increased approximately $3.4 million, or 3%, primarily related to higher interest on finance lease liabilities as a result of a higher average interest rate environment in 2024 compared to 2023.
Previous report
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (ASC Topic 280): Improvements to Reportable Segment Disclosures.” The amendments require the disclosure of significant segment expenses as well as expanded interim disclosures, along with other changes to segment disclosure requirements. The standard will be effective for fiscal years beginning after December 15, 2023, and interim periods beginning on or after December 15, 2024. We have implemented the provisions of the ASU 2023-07. See Note 14, “Segment Information,” to the accompanying consolidated financial statements for the expanded disclosures required by ASC Topic 280.
Previous report
Credit Facilities
Previous report
On October 7, 2022, we amended our Fifth Amended, Restated and Consolidated Credit Agreement (the “Fifth A&R Credit Agreement”), originally dated as of April 14, 2021, entered into by, among others, the Company and Bank of America, N.A., as administrative agent, which provides for a syndicated revolving credit facility (the “Revolving Credit Facility”) and our syndicated new and used vehicle floor plan credit facilities (the “Floor Plan Facilities” and, together with the Revolving Credit Facility, the “Credit Facilities”) to, among other things: (i) replace the London InterBank Offered Rate (“LIBOR”)-based Eurodollar reference interest rate option with Term SOFR; (ii) amend the provisions relating to the basis for inclusion of real property owned by the Company or certain of its subsidiaries in the borrowing base for the Revolving Credit Facility; (iii) amend the minimum amount of commitments under the Revolving Credit Facility and the proportion that such commitments may compose of the total commitments made by the lenders under the Credit Facilities; and (iv) adjust aspects of the offset account used for voluntary reductions to interest under the Floor Plan Facilities.
Previous report
On March 13, 2024, we amended and restated the Fifth A&R Credit Agreement (the “Sixth A&R Credit Agreement”) to, among other things, (1) extend the scheduled maturity dates to March 13, 2029, with a permitted one-year extension option thereafter; and (2) reduce the aggregate commitments to $2.4 billion. The commitment under the new vehicle revolving floor plan facility was increased to $1.35 billion, the commitment under the used vehicle revolving floor plan facility was reduced to $700.0 million and the commitment under the Revolving Credit Facility remained at $350.0 million. The Amendment includes an accordion feature in which the aggregate commitments may be increased, at the Company’s option, up to $450.0 million allocated between the three facilities on a pro rata basis. The Sixth A&R Credit Agreement contains a provision indicating that the Revolving Credit Facility commitments cannot be reduced below $50.0 million and may not consist of more than 40% of the aggregate commitments.
Previous report
In addition, the Sixth A&R Credit Agreement (1) increased the basket for quarterly dividends from $0.12 to $0.18 per share of qualified capital stock; (2) provided additional flexibility for the Company to make asset sales and repurchases of its qualified capital stock; (3) removed the covenant requiring the Company to maintain a specified consolidated liquidity ratio; and (4) amended the definition of “Adjusted Term SOFR” to clarify that it is inclusive of a 10-basis point credit spread adjustment. Amounts outstanding under the Credit Facilities bear interest at rates based upon specified credit spreads above Adjusted Term SOFR.
Previous report
Availability under the Revolving Credit Facility is calculated as the lesser of the current $350.0 million commitment or a borrowing base (the "Revolving Borrowing Base") collateralized by certain eligible assets, less any outstanding letters of credit and borrowings. As of December 31, 2024, the Revolving Borrowing Base was $350.0 million and we had $11.5 million in outstanding letters of credit and no outstanding borrowings, resulting in $338.5 million of availability under the Revolving Credit Facility.
Previous report
Our obligations under the Credit Facilities are guaranteed by the Company and certain of our subsidiaries and are secured by a pledge of substantially all of the assets of the Company and the guarantors. We have agreed under the Credit Facilities not to pledge any assets to any third parties (other than those explicitly allowed to be pledged by the amended terms of the Credit Facilities), including other lenders, subject to certain stated exceptions, including floor plan financing arrangements. In addition, the Credit Facilities contain certain negative covenants, including covenants which could restrict or prohibit indebtedness, liens, the payment of dividends and other restricted payments, capital expenditures and material dispositions and acquisitions of assets, as well as other customary covenants and default provisions. Specifically, the Credit Facilities permit quarterly cash dividends on our Class A and Class B Common Stock up to $0.18 per share so long as no Event of Default (as defined in the Sixth A&R Credit Agreement) has occurred and is continuing and provided that we remain in compliance with all financial covenants under the Credit Facilities. In addition, dividends greater than $0.18 per share are permitted subject to the limitations on restricted payments set forth in the Credit Facilities.
Previous report
4.625% Notes
Previous report
On October 27, 2021, we issued $650.0 million in aggregate principal amount of 4.625% Notes, which will mature on November 15, 2029. Sonic used the net proceeds from the issuance of the 4.625% Notes, along with the net proceeds of the 4.875% Notes, to fund the acquisition of RFJ Auto Partners, Inc. and its subsidiaries (the “RFJ Acquisition”) and to repay existing debt.
Previous report
The 4.625% Notes were issued under an Indenture, dated as of October 27, 2021 (the “2029 Indenture”), by and among the Company, certain subsidiary guarantors named therein (collectively, the “Guarantors”) and U.S. Bank National Association, as trustee (the “trustee”). The 4.625% Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis initially by all of the Company’s domestic operating subsidiaries. The parent company has no independent assets or operations. The non-domestic operating subsidiary that is not a guarantor is considered minor. Under certain circumstances set forth in the 2029 Indenture, the guarantees of the certain subsidiaries of the Company comprising the EchoPark Business (as defined in the 2029 Indenture) may be released. The 2029 Indenture also provides substantial flexibility for the Company to enter into fundamental transactions involving the EchoPark Business. The 2029 Indenture provides that interest on the 4.625% Notes will be payable semi-annually in arrears on May 15 and November 15 of each year beginning May 15, 2022. The 2029 Indenture also contains other restrictive covenants and default provisions common for an issue of senior notes of this nature.
Previous report
The 4.625% Notes are redeemable at the Company’s option, in whole or in part, at any time on or after November 15, 2024 at the redemption prices (expressed as percentages of the principal amount thereof) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, if redeemed during the 12-month period beginning on November 15 of the years set forth below:
Previous report
4.875% Notes
Previous report
On October 27, 2021, we issued $500.0 million in aggregate principal amount of 4.875% Notes, which will mature on November 15, 2031. Sonic used the net proceeds from the issuance of the 4.875% Notes, along with the net proceeds of the 4.625% Notes, to fund the RFJ Acquisition and to repay existing debt.
Previous report
The 4.875% Notes were issued under an Indenture, dated as of October 27, 2021 (the “2031 Indenture”), by and among the Company, the Guarantors and the trustee. The 4.875% Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis initially by all of the Company’s domestic operating subsidiaries. The parent company has no independent assets or operations. The non-domestic operating subsidiary that is not a guarantor is considered minor. Under certain circumstances set forth in the 2031 Indenture, the guarantees of the certain subsidiaries of the Company comprising the EchoPark Business (as defined in the 2031 Indenture) may be released. The 2031 Indenture also provides substantial flexibility for the Company to enter into fundamental transactions involving the EchoPark Business. The 2031 Indenture provides that interest on the 4.875% Notes will be payable semi-annually in arrears on May 15 and November 15 of each year beginning May 15, 2022. The 2031 Indenture also contains other restrictive covenants and default provisions common for an issue of senior notes of this nature.
Previous report
The 4.875% Notes will be redeemable at the Company’s option, in whole or in part, at any time on or after November 15, 2026 at the redemption prices (expressed as percentages of the principal amount thereof) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, if redeemed during the 12-month period beginning on November 15 of the years set forth below:
Previous report
Before November 15, 2026, the Company may redeem all or a part of the 4.875% Notes, subject to payment of a make-whole premium. In addition, the Company may redeem on or before November 15, 2026 up to an aggregate of 35% of the aggregate principal of the 4.875% Notes at a price equal to 104.875% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption, with the net cash proceeds from certain equity offerings.
Previous report
Mortgage Facility
Previous report
On November 22, 2019, we entered into a Credit Agreement between, among others, the Company and PNC Bank, National Association, as administrative agent, providing for a delayed draw term loan facility (the “Mortgage Facility”). On November 17, 2022, in connection with the closing of an amendment to the Mortgage Facility, we incurred a $320.0 million term loan and used a portion of the proceeds to repay a prior term loan and retained the remainder for working capital needs. The lenders under the Mortgage Facility committed to providing, upon the terms set forth in the amendment and upon the pledging of sufficient collateral, delayed draw-term loans in an aggregate principal amount up to $85.0 million (the “Delayed Draw Credit Facility”) and revolving loans. The amendment also (1) replaced the LIBOR-based Eurodollar reference interest rate option with one-month Term SOFR; and (2) made changes to the pricing grid, specifying credit spreads based on our Consolidated Total Lease Adjusted Leverage Ratio (as defined in the Mortgage Facility). As permitted by the Delayed Draw Credit Facility, we incurred a $7.0 million term loan on November 18, 2022.
Previous report
On March 22, 2024, we entered into an amendment to the Mortgage Facility to conform to the terms of the Sixth A&R Credit Agreement, including (1) adding certain specified share exchange transactions as permitted restricted payments and dispositions; (2) removing the covenant requiring the Company to maintain a specified consolidated liquidity ratio; and (3) increasing the basket for quarterly dividends from $0.12 to $0.18 per share of qualified capital stock.
Previous report
On May 17, 2024, we incurred and additional $78.0 million term loan as required under the Delayed Draw Credit Facility in order to achieve full utilization.
Previous report
Interest on the Mortgage Facility and Sidecar Facility (together, the "Mortgage Facilities") is paid monthly in arrears. Amortizing principal payments are scheduled to be 1.875% of the cumulative amount drawn on the Mortgage Facilities each quarter end through September 30, 2027, with the remaining balances due on the November 17, 2027 maturity date. We have the right to prepay outstanding principal on the Mortgage Facilities at any time without premium or penalty provided the prepayment amount exceeds $0.5 million.
Previous report
The Mortgage Facilities contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including covenants which could restrict or prohibit indebtedness, liens, the payment of dividends and other restricted payments, capital expenditures and material dispositions and acquisitions of assets, as well as other customary covenants and default provisions. Specifically, the Mortgage Facilities permits quarterly cash dividends on our Class A and Class B Common Stock up to $0.18 per share so long as no Event of Default (as defined in the Mortgage Facility) has occurred and is continuing and provided that we remain in compliance with all financial covenants under the Mortgage Facility.
Previous report
On December 27, 2024, we entered into a Credit Agreement between, among others, the Company and PNC Bank, National Association, as administrative agent, which established a syndicated mortgage loan facility (the “Sidecar Facility”) providing an incremental $149.1 million of term loan commitments. The Sidecar Facility matures on November 17, 2027. Though the Sidecar Facility is distinct and separate from the Mortgage Facility, the two facilities contain similar terms and conditions, are coterminous, and use the same interest rate and pricing grid.
Previous report
As of December 31, 2024, we had $366.8 million of outstanding borrowings and $95.0 million available for revolving loans under the Mortgage Facility. In addition, we had no outstanding borrowings and $44.1 million available for future term loans under the Sidecar Facility based upon the appraised value of the underlying pledged collateral at closing.
Previous report
Mortgage Notes to Finance Companies
Previous report
As of December 31, 2024, the weighted-average interest rate of our other outstanding mortgage notes (excluding the Mortgage Facility) was 3.70% (a decrease from 5.14% as of December 31, 2023) and the total outstanding mortgage principal balance of these notes (excluding the Mortgage Facility) was approximately $96.1 million. These mortgage notes require monthly payments of principal and interest through their respective maturities, are secured by the underlying properties and contain certain cross-default provisions. Maturity dates for these mortgage notes range from 2025 to 2033.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (80)
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 December 31, 2024: (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 December 31, 2024, we operated 108 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment, and 15 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 operating in 10 states. The Powersports Segment consists of 11 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 December 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 December 31, 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 134 new vehicle franchises (representing 24 different brands of cars and light trucks) and 16 collision repair centers in 18 states. The EchoPark Segment consists of 18 stores operating 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) unit sales volume was approximately 16.1 million vehicles in 2024, an increase of 4%, compared to approximately 15.5 million vehicles in 2023, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2025 new vehicle industry volume will be between 16.1 million vehicles (flat compared to 2024) and 16.5 million vehicles (an increase of 2% compared to 2024). The effects of 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 3%, to approximately 13.1 million vehicles, in 2024, from approximately 12.7 million vehicles in 2023.
Current wording
The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) unit sales volume was approximately 16.3 million vehicles in 2025, an increase of 1%, compared to approximately 16.1 million vehicles in 2024, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2026 new vehicle industry volume will be between 15.8 million vehicles (a decrease of 3% compared to 2025) and 16.5 million vehicles (an increase of 1% compared to 2025). The effects of 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 2026 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 4%, to approximately 13.6 million vehicles, in 2025, from approximately 13.1 million vehicles in 2024.
Previous wording
Impairment charges were approximately $3.9 million and $79.3 million in 2024 and 2023, respectively. Impairment charges for 2024 included approximately $2.7 million in the EchoPark Segment related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property as a result of our decisions to indefinitely suspend operations at certain EchoPark locations, and approximately $1.2 million of property and equipment impairment charges related to the Franchised Dealerships Segment. Impairment charges for 2023 included approximately $78.3 million in the EchoPark Segment related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property as a result of our decisions to indefinitely suspend operations at certain EchoPark locations, and approximately $1.0 million of property and equipment impairment charges related to the Franchised Dealerships Segment.
Current wording
Impairment charges were approximately $173.8 million and $3.9 million in 2025 and 2024, respectively. Impairment charges for 2025 included approximately $165.9 million in the Franchised Dealerships Segment related to indefinite lived franchise assets, approximately $0.2 million in the EchoPark Segment related to property held for sale, and approximately $7.6 million in the Powersports Segment related to indefinite lived franchise assets. Impairment charges for 2024 included approximately $2.7 million in the EchoPark Segment related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property as a result of our decisions to indefinitely suspend operations at certain EchoPark locations, and approximately $1.2 million of property and equipment impairment charges related to the Franchised Dealerships Segment.
Previous wording
Same store retail new vehicle revenue increased 4% in 2024, primarily driven by a 5% increase in retail new vehicle unit sales volume, offset partially by a 1% decrease in retail new vehicle average selling price. Retail new vehicle gross profit decreased 27% in 2024, due primarily to increased price competition resulting from higher levels of available inventory and higher cost of goods sold per unit, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $1,468 per unit, or 30%, to $3,387 per unit. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 46 days as of December 31, 2024, compared to 37 days as of December 31, 2023, as a result of increased manufacturer production levels and lower consumer demand resulting from affordability challenges.
Current wording
Same store retail new vehicle revenue increased 5% in 2025, primarily driven by a 2% increase in retail new vehicle unit sales volume, driven in part by an increase in consumer demand for electric vehicles ahead of expiration of the federal tax credit in the third quarter of 2025, combined with a 2% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased 7% in 2025, due primarily to increased price competition resulting from 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 $310 per unit, or 9%, to $3,094 per unit. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 48 days as of December 31, 2025, compared to 46 days as of December 31, 2024.
Previous wording
Same store retail used vehicle revenue decreased 4% in 2024, driven by a 6% decrease in retail used vehicle average selling price, offset partially by a 2% increase in retail used vehicle unit sales volume. Retail used vehicle gross profit decreased 7% in 2024, primarily due to lower retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit decreased $154 per unit, or 9%, to $1,477 per unit in 2024, due primarily to higher inventory acquisition costs and lower selling prices due to increased price competition as a result of ongoing consumer affordability challenges, including the effect of higher interest rates. Same store wholesale vehicle gross profit (loss) worsened by approximately $2.0 million, to a gross loss of $4.3 million during 2024, due primarily to a $95 per unit, or 81%, 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 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 days as of December 31, 2024, compared to 29 days as of December 31, 2023.
Current wording
Same store retail used vehicle revenue increased 3% in 2025, driven by a 3% increase in retail used vehicle average selling price. Retail used vehicle gross profit increased 2% in 2025, primarily due to higher retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit increased $25 per unit, or 2%, to $1,516 per unit in 2025, due primarily to higher retail used vehicle average selling price. Same store wholesale vehicle gross loss worsened by approximately $4.5 million, to a gross loss of $8.8 million during 2025, due primarily to a $188 per unit, or 91%, worsening of 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 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 days as of both December 31, 2025 and 2024.
Previous wording
Same store Fixed Operations revenue increased 6%, driven primarily by increased capacity as a result of additional technicians and higher parts and labor costs that were passed along to consumers, despite being negatively affected by the CDK outage. Fixed Operations gross profit increased 7% in 2024, driven primarily by higher warranty revenue contribution and higher warranty gross margin. Fixed Operations gross margin increased 70 basis points, to 50.4%, in 2024, driven primarily by an increase in warranty revenue contribution and higher warranty gross margin.
Current wording
Same store Fixed Operations revenue increased 6%, 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 8% in 2025, driven primarily by higher warranty revenue contribution and higher warranty gross margin. Fixed Operations gross margin increased 60 basis points, to 51.0%, in 2025, driven primarily by an increase in warranty revenue contribution and higher warranty gross margin.
Previous wording
Same store F&I revenue increased 2% in 2024, driven by a 4% increase in combined new and used retail unit sales volume, offset partially by a decrease in F&I gross profit per unit. F&I gross profit per retail unit decreased $36 per unit, or 1%, to $2,377 per unit, in 2024, driven by changes in the mix of F&I products sold.
Current wording
Same store F&I revenue increased 9% in 2025, driven by a 7% increase in F&I gross profit per retail unit and a 1% increase in retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $174 per unit, or 7%, to $2,551 per unit in 2025, driven by changes in the mix of F&I products sold.
Previous wording
Reported total revenues decreased 13% in 2024, driven primarily by a 9% decrease in average retail used vehicle selling price and a 6% decrease in total vehicle unit sales volume (retail used vehicles and wholesale vehicles combined). Reported total gross profit increased 28% in 2024, primarily due to an $452 increase in retail used vehicle gross profit (loss) per unit and a $395 increase in F&I gross profit per unit, partially offset by the decrease in retail used vehicle unit sales volume.
Current wording
Reported total revenues decreased 3% in 2025, driven primarily by a 3% decrease in average retail used vehicle selling price and a 1% decrease in total vehicle unit sales volume (retail used vehicles and wholesale vehicles combined). Reported total gross profit increased 13% in 2025, primarily due to a 15% increase in combined retail used vehicle and F&I gross profit per unit.
Previous wording
Same market total revenues increased 4% in 2024, driven primarily by a 10% increase in retail used vehicle unit sales volume, offset partially by a 7% decrease in average selling price per used retail unit. Same market total gross profit increased 48% in 2024, driven primarily by a 271% increase in retail used vehicle gross profit per unit.
Current wording
Same market total revenues decreased 2% in 2025, attributable to a 2% decrease in retail used vehicle unit sales volume, coupled with a 3% decrease in average selling price per used retail unit. Same market total gross profit increased 12% in 2025, driven primarily by a 14% increase in combined retail used vehicle and F&I gross profit per unit.
Previous wording
Reported retail used vehicle revenue decreased 14%, due to a 9% decrease in average retail used vehicle unit selling prices and a 6% decrease in retail used vehicle unit sales volume. F&I revenue increased 9% in 2024, driven primarily by a 16% increase in F&I gross profit per retail unit. Reported combined retail used vehicle and F&I gross profit per unit increased $846 per unit, or 39%, to $3,029 per unit in 2024, primarily due to increases in F&I revenue.
Current wording
Reported retail used vehicle revenue decreased 5%, due to a 3% decrease in average retail used vehicle unit selling prices and a 2% decrease in retail used vehicle unit sales volume. F&I revenue increased 13% in 2025, driven primarily by a 15% increase in F&I gross profit per retail unit, partially offset by a 2% decrease in total retail units in 2025. Reported combined retail used vehicle and F&I gross profit per unit increased $455 per unit, or 15%, to $3,484 per unit in 2025, primarily due to the increase in F&I revenue.
Previous wording
Reported wholesale vehicle gross profit decreased approximately $2.2 million in 2024, primarily due to a 257% decrease in wholesale vehicle gross profit per unit. 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 used vehicle inventory days’ supply in our EchoPark Segment was approximately 38 days as of December 31, 2024, as compared to 36 days as of December 31, 2023
Current wording
Reported wholesale vehicle gross loss worsened by approximately $0.5 million, to a gross loss of approximately $1.8 million in 2025, primarily due to a worsening in wholesale vehicle gross loss of $30 per unit, or 27%, during 2025. 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 used vehicle inventory days’ supply in our EchoPark Segment was approximately 40 days as of December 31, 2025, as compared to 38 days as of December 31, 2024
Previous wording
Reported retail new vehicle revenue decreased 7% in 2024, primarily driven by a 12% decrease in retail new vehicle unit sales volume, offset partially by a 6% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased 31% in 2024, as a result of lower retail new vehicle unit sales volume and lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $722 per unit, or 21%, to $2,713 per unit, due primarily to higher inventory invoice costs.
Current wording
Reported retail new vehicle revenue increased 29% in 2025, primarily driven by a 21% increase in retail new vehicle unit sales volume, coupled with a 6% increase in retail new vehicle average selling price. Reported retail new vehicle gross profit increased 37% in 2025, as a result of higher retail new vehicle unit sales volume and higher retail new vehicle gross profit per unit. Reported retail new vehicle gross profit per unit increased $337 per unit, or 12%, to $3,050 per unit, due primarily to higher retail new vehicle average selling price.
Previous wording
Same store used vehicle revenue increased 12% in 2024, primarily driven by a 17% increase in retail used vehicle average selling price. Retail used vehicle gross profit decreased 4% in 2024, as a result of lower retail used vehicle unit sales volume. Retail used vehicle gross profit per unit increased $34 per unit, or 1%, to $2,420 per unit. On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 115 days as of December 31, 2024, compared to 118 days as of December 31, 2023. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75- to 100-day range, depending on seasonality (typically the second and third quarter has more demand and lower days’ supply compared to the first and fourth quarters).
Current wording
Same store used vehicle revenue increased 61% in 2025, primarily driven by a 49% increase in retail used vehicle unit sales volume, coupled with a 9% increase in retail used vehicle average selling price. Retail used vehicle gross profit increased 22% in 2025, as a result of higher retail used vehicle unit sales volume. Retail used vehicle gross profit per unit decreased $437 per unit, or 18%, to $1,982 per unit, 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 121 days as of December 31, 2025, compared to 139 days as of December 31, 2024. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75- to 100-day range, depending on seasonality (typically the second and third quarter has more demand and lower days’ supply compared to the first and fourth quarters).
Previous wording
Same store Fixed Operations revenue decreased 6% and Fixed Operations gross profit decreased 8% in 2024, driven primarily by lower repair order volume. Fixed Operations gross margin decreased 100 basis points to 46.0% in 2024, driven primarily by a decrease in customer pay revenue contribution and lower customer pay gross margin.
Current wording
Same store Fixed Operations revenue increased 7% and Fixed Operations gross profit increased 13% in 2025, driven primarily by higher repair order volume. Fixed Operations gross margin increased 240 basis points to 48.0% in 2025, driven primarily by an increase in customer pay gross margin.
Previous wording
We currently estimate the 2025 new vehicle industry volume will be between 16.1 million vehicles (flat compared to 2024) and 16.5 million vehicles (an increase of 2% compared to 2024). The effects of availability of new and used vehicle inventory, 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.
Current wording
We currently estimate the 2026 new vehicle industry volume will be between 15.8 million vehicles (a decrease of 3% compared to 2025) and 16.5 million vehicles (an increase of 1% compared to 2025). The effects of availability of new and used vehicle inventory, 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 2026 new vehicle industry volume to vary from expectations.
Previous wording
For further analysis of new vehicle results, see the tables and discussion under the headings “New Vehicles - Franchised Dealerships Segment” and “New Vehicles - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
Current wording
For further analysis of new vehicle results on a segment basis, see the tables and discussion under the headings “New Vehicles - Franchised Dealerships Segment” and “New Vehicles - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
Previous wording
For further analysis of used vehicle results, see the tables and discussion under the headings “Used Vehicles - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “Used Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Current wording
For further analysis of used vehicle results on a segment basis, see the tables and discussion under the headings “Used Vehicles - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “Used Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Previous wording
Wholesale vehicle revenues are affected by retail new and used vehicle unit sales volume and the associated trade-in volume, as well as short-term, temporary and seasonal fluctuations in wholesale auction pricing. In recent years, wholesale vehicle prices and supply at auction have experienced periods of volatility, impacting our wholesale vehicle revenues and related gross profit (loss), as well as our retail used vehicle revenues and related gross profit. We believe that the current wholesale vehicle price environment is not sustainable in the long term and expect that average wholesale vehicle pricing and related gross profit (loss) will continue to return toward long-term normalized levels in the long run, but may continue to experience volatility into 2025 or beyond. Wholesale vehicle revenues are also significantly affected by our corporate inventory management strategy and policies, which are designed to optimize our total used vehicle inventory and expected gross profit levels and minimize inventory carrying risks.
Current wording
Wholesale vehicle revenues are influenced by several factors, including retail new and used vehicle unit sales volume, associated trade-in volume, and short-term, temporary, and seasonal fluctuations in wholesale auction pricing. In recent years, wholesale vehicle prices and supply at auction have experienced periods of volatility, impacting our wholesale vehicle revenues and related gross profit (loss), as well as our retail used vehicle revenues and related gross profit. We believe that the current wholesale vehicle price environment is not sustainable in the long term and expect that average wholesale vehicle pricing and related gross profit (loss) will continue to return toward long-term normalized levels in the long run, but may continue to experience volatility into 2026 or beyond. Wholesale vehicle revenues are also significantly affected by our corporate inventory management strategy and policies, which are designed to optimize our total used vehicle inventory and expected gross profit levels and minimize inventory carrying risks.
Previous wording
For further analysis of wholesale vehicle results, see the tables and discussion under the headings “Wholesale Vehicles - Franchised Dealerships Segment,” “Wholesale Vehicles - EchoPark Segment” and “Wholesale Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Current wording
For further analysis of wholesale vehicle results on a segment basis, see the tables and discussion under the headings “Wholesale Vehicles - Franchised Dealerships Segment,” “Wholesale Vehicles - EchoPark Segment” and “Wholesale Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Previous wording
For further analysis of Fixed Operations results, see the tables and discussion under the headings “Fixed Operations - Franchised Dealerships Segment” and “Fixed Operations - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
Current wording
For further analysis of Fixed Operations results on a segment basis, see the tables and discussion under the headings “Fixed Operations - Franchised Dealerships Segment” and “Fixed Operations - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
Previous wording
For further analysis of F&I results, see the tables and discussion under the headings “F&I - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “F&I - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Current wording
For further analysis of F&I results on a segment basis, see the tables and discussion under the headings “F&I - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “F&I - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Previous wording
Retail new vehicle revenue increased 4%, due primarily to a 5% increase in retail new vehicle unit sales volume, partially offset by a 1% decrease in retail new vehicle average selling price. Retail new vehicle gross profit decreased approximately $138.5 million, or 27%, as a result of lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $1,468 per unit, or 30%, to $3,387 per unit, due primarily to increased price competition as a result of higher levels of available inventory than in the prior year and higher inventory invoice costs. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 46 and 37 days as of December 31, 2024 and 2023, respectively.
Current wording
Same store retail new vehicle revenue increased 5%, primarily due to a 2% increase in retail new vehicle unit sales volume and a 2% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased approximately $26.8 million, or 7%, as a result of lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $310 per unit, or 9%, to $3,094 per unit, primarily due to increased price competition as a result of higher levels of available inventory, particularly electric vehicles, than in the prior year and higher inventory invoice costs. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 48 and 46 days as of December 31, 2025 and 2024, respectively.
Previous wording
Same store wholesale vehicle revenue decreased 7%, driven primarily by a 9% decrease in wholesale vehicle revenue per unit, offset partially by a 3% increase in wholesale vehicle unit sales volume in 2024. The increase in wholesale vehicle unit sales volume was driven by a continued increase in the supply of new vehicle inventory resulting in a sales mix with higher retail new and used vehicle sales volume. Wholesale vehicle gross loss worsened by approximately $2.0 million, driven primarily by a $95 per unit increase in wholesale vehicle gross loss per unit during 2024.
Current wording
Same store wholesale vehicle revenue increased $10.1 million, or 5%, driven primarily by a 7% increase in wholesale vehicle unit sales volume, offset slightly by a 1% decrease in wholesale vehicle revenue per unit in 2025. Wholesale vehicle gross loss worsened by approximately $4.5 million, driven primarily by a $188 per unit worsening in wholesale vehicle gross loss per unit during 2025.
Previous wording
Fixed Operations revenue increased approximately $96.3 million, or 6%, and Fixed Operations gross profit increased approximately $60.1 million, or 7%. Customer pay gross profit increased approximately $17.9 million, or 4%, warranty gross profit increased approximately $35.1 million, or 25%, wholesale parts gross profit decreased approximately $2.8 million, or 8%, and internal, sublet and other gross profit increased approximately $9.9 million, or 5%. Results have also been positively impacted by increased capacity realized through our efforts to hire and retain additional service technicians, with a net increase in service technician headcount of 335 technicians in 2024. As a result, we expect to continue to see growth in Fixed Operations revenues and gross profit in 2025.
Current wording
Fixed Operations revenue increased approximately $109.1 million, or 6%, and Fixed Operations gross profit increased approximately $67.5 million, or 8%. Customer pay gross profit increased approximately $26.1 million, or 6%, warranty gross profit increased approximately $34.5 million, or 20%, wholesale parts gross profit decreased approximately $2.7 million, or 8%, and internal, sublet and other gross profit increased approximately $9.6 million, or 4%. Results have been positively impacted by increased capacity realized through our efforts to hire and retain additional service technicians. As a result, we expect to continue to see growth in Fixed Operations revenues and gross profit in 2026.
Previous wording
Reported F&I revenue decreased 1% in 2024, driven primarily by a 9% decrease in combined retail new and used vehicle unit sales volume, offset partially by a 7% increase in F&I gross profit per retail unit. F&I gross profit per retail unit increased $75 per unit, or 7%, to $1,092 per unit in 2024.
Current wording
Same store F&I revenue increased $44.0 million, or 9%, primarily due to a 7% increase in F&I gross profit per retail unit and a 1% increase in combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $174 per unit, or 7%, to $2,551 per unit, primarily due to higher gross profit per finance contract and per service contract and increased penetration rates for finance, service and other aftermarket contracts.
Previous wording
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. Same market results may vary significantly from reported results due to store closures during 2023 and 2024, as the closed stores are not included in same market results.
Current wording
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. Same market results may vary significantly from reported results due to the closure of stores that are no longer included in same market results.
Previous wording
On June 22, 2023, Sonic announced a plan to indefinitely suspend operations at eight EchoPark locations and 14 related delivery/buy centers. In addition, during the third quarter of 2023, we closed three Northwest Motorsport locations within the EchoPark Segment. In January 2024, we closed the remaining seven Northwest Motorsport stores. In light of these closures, we believe the following discussion of EchoPark Segment results on a same market basis provides a meaningful year-over-year comparison.
Current wording
In January 2024, we closed the remaining seven Northwest Motorsport stores within the EchoPark Segment. In light of these closures, we believe the following discussion of EchoPark Segment results on a same market basis provides a meaningful year-over-year comparison.
Previous wording
Our EchoPark operating strategy focuses on maximizing total used vehicle-related gross profit (based on a combination of retail used vehicle unit sales volume, front-end retail used vehicle gross profit (loss) per unit and F&I gross profit per retail unit) rather than realizing traditional levels of front-end retail used vehicle gross profit per unit. As such, we believe the best per unit measure of gross profit performance at our EchoPark stores is a combined total gross profit (loss) per retail unit, which includes both front-end retail used vehicle gross profit (loss) and F&I gross profit per retail unit sold. See the discussion under the heading “Results of Operations - Consolidated” for additional discussion of the macro drivers of used vehicle revenues and F&I revenues.
Current wording
Our EchoPark operating strategy focuses on maximizing total used vehicle-related gross profit (based on a combination of retail used vehicle unit sales volume, front-end retail used vehicle gross profit (loss) per unit and F&I gross profit per retail unit sold) rather than realizing traditional levels of front-end retail used vehicle gross profit per unit. As such, we believe the best per unit measure of gross profit performance at our EchoPark stores is a combined total gross profit (loss) per retail unit, which includes both front-end retail used vehicle gross profit (loss) and F&I gross profit per retail unit sold. See the discussion under the heading “Results of Operations - Consolidated” for additional discussion of the macro drivers of used vehicle revenues and F&I revenues.
Previous wording
Used vehicle revenue increased approximately $39.7 million, or 2%, due to a 10% increase in used vehicle unit sales volume, partially offset by a 7% decrease in used vehicle revenue per unit. Combined used vehicle gross profit and F&I revenue increased approximately $70.0 million, or 50%, due to an $821, or 36%, increase in total used vehicle and F&I gross profit per unit. The increase in 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 paying lower wholesale auction prices, and sourcing a higher percentage of inventory from non-auction sources.
Current wording
Same market retail used vehicle revenue decreased approximately $80.5 million, or 4%, due to a 2% decrease in retail used vehicle unit sales volume, and a 3% decrease in used vehicle revenue per unit. Same market combined used vehicle gross profit and F&I revenue increased approximately $25.5 million, or 12%, due to a $424, or 14%, increase in total used vehicle and F&I gross profit per unit. The increase in 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.
Previous wording
Within F&I revenue, finance contract gross profit increased approximately $3.7 million, or 9%, due to a 10% increase in retail unit sales volume, partially offset by a 1% decrease in gross profit per finance contract and a 20-basis point decrease in finance contract penetration rate. Service contract gross profit increased approximately $4.4 million, or 14%, due to a 3% increase in total service contracts and a 11% increase in gross profit per service contract, partially offset by a 310-basis point decrease in service contract penetration rate. Other aftermarket product contract gross profit increased approximately $40.0 million, or 138%, due to a 91% increase in total aftermarket contracts, a 24% increase in gross profit per aftermarket contract, and a 7,790-basis point increase in other aftermarket product contract penetration rate as a result of our efforts to offer a wider range of F&I products to our guests.
Current wording
Within same market F&I revenue, finance contract gross profit increased approximately $1.5 million, or 3%, due to a 3% increase in gross profit per finance contract. Service contract gross profit increased approximately $6.7 million, or 9%, due to a 10% increase in gross profit per service contract, partially offset by a 1% decrease in total service contracts. Other aftermarket product contract gross profit increased approximately $9.0 million, or 13%, due to an 11% increase in total aftermarket contracts, a 1% increase in gross profit per aftermarket contract, and a 2,390 basis point increase in other aftermarket product contract penetration rate as a result of our efforts to offer a wider range of F&I products to our guests.
Previous wording
On a trailing quarter cost of sales basis, our reported used vehicle inventory days’ supply in our EchoPark Segment was approximately 38 and 36 days as of December 31, 2024 and 2023, 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.
Current wording
On a trailing quarter cost of sales basis, our reported used vehicle inventory days’ supply in our EchoPark Segment was approximately 40 and 38 days as of December 31, 2025 and 2024, 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.
Previous wording
Same market wholesale vehicle revenue increased 5%, driven primarily by a 16% increase in same market wholesale vehicle unit sales volume, offset partially by an $880, or 9%, decrease in same market wholesale vehicle revenue per unit. Same market wholesale vehicle gross profit decreased approximately $2.2 million, due primarily to a decrease in same market wholesale vehicle gross profit per unit of $235 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 13%, driven primarily by a 9% increase in same market wholesale vehicle unit sales volume, and a $305, or 4%, increase in same market wholesale vehicle revenue per unit. Same market wholesale vehicle gross profit decreased approximately $1.1 million, due primarily to a decrease in same market wholesale vehicle gross profit per unit of $82 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
Our Powersports Segment consists of eight stores acquired during 2022, five stores acquired in the first quarter of 2023, and two stores acquired in the fourth quarter of 2024. As a result of these acquisitions, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores. The following discussion of 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. Our Powersports Segment results are subject to seasonal variations, such that the second and third quarters are generally expected to contribute higher revenues and segment income than the first and fourth quarters.
Current wording
As a result of the acquisition and termination of certain powersports stores in 2024 and 2025, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores. The following discussion of 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. Our Powersports Segment results are subject to seasonal variations, such that the second and third quarters are generally expected to contribute higher revenues and segment income than the first and fourth quarters.
Previous wording
On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 178 days as of December 31, 2024. We believe that in a normal production environment, the level of new vehicle inventory days’ supply in our Powersports Segment should be in the 90- to 120-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).
Current wording
On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 140 and 178 days as of December 31, 2025 and 2024 respectively. We believe that in a normal production environment, the level of new vehicle inventory days’ supply in our Powersports Segment should be in the 90 to 120-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).
Previous wording
Same store retail used vehicle revenue increased 12%, due primarily to a 17% increase in retail used vehicle average selling price, partially offset by a 4% decrease in retail used vehicle unit sales volume. Same store retail used vehicle gross profit decreased approximately $0.2 million, or 4%, due primarily to lower retail used vehicle unit sales volume. Same store retail used vehicle gross profit per unit increased $34 per unit, or 1%, to $2,420 per unit, due primarily to changes in inventory mix and variations between wholesale and retail market pricing.
Current wording
Same store retail used vehicle revenue increased 61%, due primarily to a 49% increase in retail used vehicle unit sales volume and a 9% increase in retail used vehicle average selling price. Same store retail used vehicle gross profit increased approximately $1.1 million, or 22%, due primarily to higher retail used vehicle unit sales volume, offset partially by lower retail used vehicle gross profit per unit. Same store retail used vehicle gross profit per unit decreased $437 per unit, or 18%, to $1,982 per unit, due primarily to changes in inventory mix and variations between wholesale and retail market pricing.
Previous wording
On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 115 days as of December 31, 2024. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75- to 100-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).
Current wording
On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 121 days as of December 31, 2025. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75 to 100-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).
Previous wording
Same store wholesale vehicle revenue decreased approximately $0.1 million, and same store wholesale vehicle gross profit increased approximately $0.1 million, driven by changes in wholesale unit sales volume and wholesale gross profit per unit.
Current wording
Same store wholesale vehicle revenue increased approximately $0.4 million, and same store wholesale vehicle gross profit (loss) improved approximately $0.2 million, driven by changes in wholesale unit sales volume and wholesale gross profit per unit.
Previous wording
Same store Fixed Operations revenue decreased approximately $2.6 million and same store Fixed Operations gross profit decreased approximately $1.7 million. Same store customer pay revenue decreased approximately $4.4 million and same store customer pay gross profit decreased approximately $3.6 million. Same store warranty revenue increased approximately $2.4 million and same store warranty gross profit increased approximately $2.1 million. Same store wholesale parts revenue remained flat year over year and same store wholesale parts gross profit increased approximately 0.1 million. Same store internal, sublet and other revenue decreased approximately $0.6 million and same store internal, sublet and other gross profit decreased approximately $0.3 million.
Current wording
Same store Fixed Operations revenue increased approximately $3.1 million and same store Fixed Operations gross profit increased approximately $2.5 million. Same store customer pay revenue increased approximately $0.3 million and same store customer pay gross profit increased approximately $0.7 million. Same store warranty revenue increased approximately $0.7 million and same store warranty gross profit increased approximately $0.3 million. Same store wholesale parts revenue decreased approximately $0.2 million and same store wholesale parts gross profit decreased approximately $0.1 million. Same store internal, sublet and other revenue increased approximately $2.3 million and same store internal, sublet and other gross profit increased approximately $1.6 million.
Previous wording
(2)For 2024, amount includes approximately $13.0 million of pre-tax charges related to excess compensation as a result of the CDK outage, approximately $8.3 million of pre-tax charges related to storm damage, approximately $3.5 million of pre-tax gain related to the acquisition of the remaining equity interest in a joint venture, $10.0 million of pre-tax gain related to the CDK outage cyber claim payment, and approximately $2.2 million of pre-tax charges related to severance and long-term compensation expense. For 2023, amount includes approximately $20.9 million of pre-tax gain related to acquisitions and dispositions and approximately $1.9 million of pre-tax charges related to storm damage.
Current wording
(2)For 2025, amount includes approximately $40.0 million of pre-tax benefit from cyber insurance proceeds related to the CDK outage, approximately $5.0 million of pre-tax charges related to storm damage, approximately $5.5 million of pre-tax loss related to dispositions, and approximately $0.7 million of pre-tax legal expenses. For 2024, amount includes approximately $13.0 million of pre-tax charges related to excess compensation as a result of the CDK outage, approximately $8.3 million of pre-tax charges related to storm damage, approximately $3.5 million of pre-tax gain related to the acquisition of the remaining equity interest in a joint venture, $10.0 million of pre-tax gain related to the CDK outage cyber claim payment, and approximately $2.2 million of pre-tax charges related to severance and long-term compensation expense.
Previous wording
(3)For 2024, amount includes approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.9 million of pre-tax charges for severance and long-term compensation expense, approximately $2.1 million of pre-tax gain on real estate dispositions, 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, and approximately $0.4 million of pre-tax charges related to excess compensation as a result of the CDK outage. For 2023, amount includes approximately $10.0 million of pre-tax charges related to used vehicle inventory valuation adjustments, $5.1 million of pre-tax charges for long-term compensation expense, approximately $4.3 million of pre-tax lease exit charges and approximately $0.3 million of pre-tax loss related to acquisitions and dispositions.
Current wording
(3)For 2025, amount includes approximately $0.9 million of pre-tax gain on dispositions. For 2024, amount includes approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.9 million of pre-tax charges for severance and long-term compensation expense, 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, approximately $2.1 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.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Unless otherwise noted, all discussion of increases or decreases are for 2025 compared to 2024. The following discussion is on a reported basis, except where otherwise noted as being on a same store basis. 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 report — wording carried from elsewhere
On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 31 days as of both December 31, 2025 and 2024.
Current report — wording carried from elsewhere
The following table sets forth information related to our EchoPark Segment reported SG&A expenses:
Current report — wording carried from elsewhere
For the EchoPark Segment, SG&A expenses for 2025 include approximately $0.9 million of pre-tax gain on dispositions. For the EchoPark Segment, SG&A expenses for 2024 included approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.9 million of pre-tax charges for severance and long-term compensation expense, 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, approximately $2.1 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.
Current report — wording carried from elsewhere
For the Powersports Segment, SG&A expenses for 2025 include approximately $1.1 million of pre-tax charges related to dispositions. For the Powersports Segment, SG&A expenses for 2024 included approximately $0.5 million of pre-tax charges related to severance and long-term compensation expense.