Company Performance - Sonic Automotive (SAH) has gained approximately 24.5% year-to-date, significantly outperforming the Retail-Wholesale sector, which has seen an average gain of about 8.1% [4] - The Zacks Consensus Estimate for SAH's full-year earnings has increased by 11.4% over the past quarter, indicating improving analyst sentiment and a positive earnings outlook [3] Industry Comparison - Sonic Automotive is part of the Automotive - Retail and Wholesale industry, which includes 10 stocks and currently ranks 81 in the Zacks Industry Rank. This industry has gained an average of 7.9% so far this year, showing that SAH is performing better than its peers in this specific area [5] - Another stock in the Retail-Wholesale sector, Somnigroup International (SGI), has outperformed the sector with a year-to-date return of 49%, while SGI belongs to the Retail - Home Furnishings industry, which is ranked 212 and has only moved +3.3% this year [4][6]

Core Viewpoint - SpartanNash Co, Camping World Holdings Inc, and Sonic Automotive, Inc. are set to trade ex-dividend on September 15, 2025, with respective upcoming dividends announced [1]. Dividend Announcements - SpartanNash Co will pay a quarterly dividend of $0.22 on September 30, 2025 [1]. - Camping World Holdings Inc will pay a quarterly dividend of $0.125 on September 29, 2025 [1]. - Sonic Automotive, Inc. will pay a quarterly dividend of $0.38 on October 15, 2025 [1]. Expected Price Adjustments - Based on the recent stock price of $26.58 for SpartanNash Co, the dividend represents approximately 0.83%, indicating shares may open 0.83% lower on September 15, 2025 [1]. - Camping World Holdings Inc is expected to open 0.74% lower, while Sonic Automotive, Inc. is anticipated to open 0.47% lower, all else being equal [1]. Historical Dividend Stability - Historical dividend data can provide insights into the stability of future dividends, which is crucial for assessing annual yield expectations [7]. - Current estimated annualized yields are 3.31% for SpartanNash Co, 2.97% for Camping World Holdings Inc, and 1.87% for Sonic Automotive, Inc. [7]. Recent Trading Performance - In recent trading, SpartanNash Co shares are down about 0.5%, Camping World Holdings Inc shares are down about 5.5%, and Sonic Automotive, Inc. shares are down about 2.5% [8].

Core Insights - Sonic Automotive, Inc. achieved record-breaking performance at the 85th Annual Sturgis Motorcycle Rally, with significant sales and engagement across its Harley-Davidson dealerships [1][2][5] - The company sold over 1,100 motorcycles during the rally, marking a peak single-day sale of 135 motorcycles, surpassing the previous record of 86 [5][8] - Sonic Powersports solidified its position as a leading retailer in the Harley-Davidson community, with Black Hills Harley-Davidson recognized as the No. 1 dealership in America for combined new and used motorcycle sales [2][3] Sales Performance - The rally attracted over 537,000 vehicles, an 11% increase over the five-year average, with total attendance estimated to exceed 800,000 [5] - Sonic Powersports' sales registered from all 50 states, with four days exceeding 100 motorcycles sold [8] - The company executed a successful retail strategy, with more than 500 team members on-site to enhance customer experiences [5][8] Community Engagement - The event featured brand-first activations, including a limited-edition Sturgis Rally motorcycle and the launch of the 85th Founders Club to celebrate rider loyalty [4] - Sonic Powersports plans to expand its presence at future rallies, aiming to enhance rider experience and community connection [6]

Company Overview - Sonic Automotive is a leading automotive retailer in the United States, involved in selling new and used cars, light trucks, and offering warranties, service contracts, vehicle financing, and insurance [11] - The company also provides maintenance and repair services, and sells replacement parts and aftermarket automotive products [11] Investment Insights - Sonic Automotive has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [12] - The company has a Momentum Style Score of B, with shares increasing by 14.7% over the past four weeks [12] - Four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.71 to $7.12 per share [12] - Sonic Automotive has an average earnings surprise of +7%, suggesting potential for positive performance [12] Conclusion - With a strong Zacks Rank and favorable Momentum and VGM Style Scores, Sonic Automotive is recommended for investors' consideration [13]

Core Insights - U.S. auto retailers Carvana Inc. and Sonic Automotive are pursuing different business models, with Carvana focusing on a digital-first approach and Sonic combining traditional dealerships with online capabilities [1] Carvana Overview - Carvana is the second-largest used car retailer in the U.S. with a market share of only 1.5%, indicating significant growth potential in a fragmented market [2] - Retail units sold in Q2 2025 increased by 41%, with adjusted EBITDA rising 70% year over year to $601 million, and projected adjusted EBITDA for the full year is between $2 billion and $2.2 billion, up from $1.38 billion last year [3][6] - Efficiency improvements have been a key driver of Carvana's performance, including reduced costs through insourcing, staffing optimization, and the acquisition of ADESA's U.S. operations, which enhanced auction capabilities [4] - Despite a long-term debt of $5.3 billion and a debt-to-capital ratio of 0.72, Carvana's strong sales momentum and operational efficiency present a compelling investment case [5] Sonic Automotive Overview - Sonic Automotive operates a diverse network of dealerships selling both new and used vehicles, with high-margin parts, services, and finance/insurance divisions contributing nearly 75% of gross profit [7] - The EchoPark segment, focusing on used car sales, reported adjusted EBITDA of $27.6 million in 2024, with a record income of $11.7 million and a 128% year-over-year increase in adjusted EBITDA to $16.4 million [8] - Sonic's acquisition of four Jaguar and Land Rover dealerships is expected to add approximately $500 million in annual revenues, enhancing its luxury brand offerings [9] - The company has raised its dividend seven times in the past five years, with the latest increase of 9% to 38 cents per share, although it also faces balance sheet challenges with long-term debt of $1.47 billion [10] Comparative Analysis - Year-to-date, Carvana shares have increased by 78%, outperforming Sonic Automotive [11] - Carvana's forward sales multiple is 3.51, significantly above its five-year median of 1.95, while Sonic's forward sales multiple is 0.19 compared to its median of 0.14 [13] - Carvana's high valuations reflect strong growth expectations and improving profitability, while Sonic offers stability through diversified revenues [15] Conclusion - Carvana presents a high growth potential driven by digital adoption in car buying, despite its heavy debt load [16] - Sonic Automotive provides stability through diversified revenue streams and dealership scale, but also carries leverage risks [16] - Overall, Carvana is viewed as better positioned for growth due to strong unit growth and rising profitability, while Sonic offers balance and steady dividends [17]

Core Insights - NETSOL Technologies, Inc. has been selected by Sonic Automotive, Inc. to lead a discovery engagement for a next-generation omnichannel digital retail platform powered by NETSOL's Transcend Retail [1][2][4] - This strategic engagement aims to enhance customer experience and dealer operations, particularly within Sonic's EchoPark Automotive operations, by defining a scalable platform architecture [2][3] - The partnership reflects a broader industry trend where leading dealership groups are prioritizing digital transformation to meet evolving consumer expectations [3][4] Company Overview - NETSOL Technologies specializes in AI-powered solutions for the asset finance and leasing industry, serving clients across over 30 countries since its inception in 1996 [5] - The company is recognized for its innovative asset finance solutions and commitment to customer success, leveraging advanced AI and cloud services [5] - Sonic Automotive, a Fortune 500 company, aims to become the most valuable diversified automotive retail and service brand in America, focusing on creating exceptional guest experiences through strategic technology investments [6]

Core Insights - Sonic Automotive, Inc. (SAH) reported second-quarter 2025 adjusted earnings per share of $2.19, exceeding the Zacks Consensus Estimate of $1.63 and reflecting a 49% increase from the previous year [1] - Total revenues reached $3.66 billion, surpassing the Zacks Consensus Estimate by 0.44% and increasing from $3.45 billion in the same quarter last year [1] Revenue Breakdown - Consolidated revenues from new vehicle sales amounted to $1.7 billion, up 7% year over year; used vehicle sales were $1.18 billion, nearly flat; and wholesale vehicle sales totaled $83.3 million, up 17% [2] - Revenues from parts, service, and collision repair increased by 12% to $495.6 million, while finance, insurance, and other revenues rose 17% year over year to $202.1 million [2] Franchised Dealerships Segment - In the Franchised Dealerships segment, revenues from new vehicle sales were $1.66 billion (up 7% year over year), used vehicle sales were $745 million (up 2%), and wholesale vehicle sales were $57.8 million (up 19%) [3] - Parts, service, and collision repair revenues increased by 12% to $484.9 million, and finance, insurance, and other revenues rose 16% to $144.3 million [3] - Same-store revenues increased by 6% to over $3 billion, with same-store retail units of new and used vehicles totaling 52,451, up 1% from the same quarter of 2024 [3] EchoPark Segment - The EchoPark segment reported quarterly revenues of $508.6 million, down 2% year over year, with used vehicle sales contributing $427.4 million (down 5%), wholesale vehicle sales at $25.4 million (up 16%), and finance, insurance, and other revenues at $55.8 million (up 20%) [4] - The segment sold 16,742 used vehicles and 3,097 wholesale vehicles, reflecting a 1% and 19% increase year over year, respectively [4] Powersports Segment - In the Powersports segment, revenues from new vehicle sales totaled $26.9 million (up 24% year over year), used vehicle sales were $8.3 million (up 57%), while wholesale vehicle sales decreased to $0.3 million (down 67%) [5] - Parts, service, and collision repair revenues rose by 9% to $10.6 million, with finance, insurance, and other revenues at $2 million [5] - Same-store revenues increased by 12% to $42.2 million, with same-store retail units of new and used vehicles totaling 1,962, up 19% year over year [5] Financial Metrics - Selling, general, and administrative expenses decreased by 5% year over year to 68.5% of gross profit [6] - Cash and cash equivalents stood at $110.4 million as of June 30, 2025, up from $44 million as of December 31, 2024; long-term debt decreased to $1.47 billion from $1.51 billion over the same period [6] Dividend Announcement - Sonic Automotive increased its quarterly dividend by 9% to $0.38 per share, payable on October 15, 2025, to shareholders of record as of September 15 [7]

Core Insights - Sonic Automotive reported strong operational results for Q2 2025, with adjusted earnings per share of $2.19 and revenue of $3.7 billion, exceeding analyst expectations [1][2] - Despite positive operational data, the company recorded a net loss due to a significant non-cash impairment charge [1] - The quarter demonstrated solid segment trends, robust profit growth in key areas, and a higher dividend, although challenges related to costs and assets persist [1] Financial Performance - Adjusted EPS (Non-GAAP) was $2.19, surpassing the estimate of $1.63, and reflecting a 49% year-over-year increase [2] - Revenue reached $3.7 billion, slightly above the estimate of $3.68 billion, marking a 7% increase from $3.45 billion in Q2 2024 [2] - Gross profit was $602.2 million, up 12% from the previous year [2] - Adjusted EBITDA increased by 22% to $172.7 million [2] - EchoPark segment income saw a remarkable 679% increase to $10.9 million, despite a 2% decline in segment revenue [2][6] Business Model and Strategy - Sonic Automotive operates through three main segments: Franchised Dealerships, EchoPark, and Powersports [3] - The company emphasizes growth in luxury and used vehicle markets, supported by acquisitions and customer experience improvements [4] - Sonic's strategy includes expanding its store footprint, integrating new brands, and optimizing operational efficiency [4] Segment Performance - The Franchised Dealerships segment generated $3.1 billion in sales, a 7% increase, with segment income growing 74% to $91.6 million [5] - New vehicle unit sales rose by 5%, while used vehicle sales decreased by 4%, although profit per used vehicle improved by 3% [5] - The Powersports segment reported revenue of $48.1 million, but profits remained flat, with adjusted EBITDA down 13% [7] Recent Developments - Sonic completed the acquisition of four Jaguar Land Rover dealerships, expected to add approximately $500 million in annualized revenues [8] - The company raised its quarterly dividend by 9% to $0.38 per share, reflecting a commitment to capital return [10][12] Cost Management and Financial Position - SG&A as a percentage of gross profit improved to 68.5%, down from 72.9% a year ago, although absolute SG&A dollars increased by 5% [9] - The company ended the quarter with $210 million in cash and deposits, providing overall liquidity of $775 million [10] Future Outlook - Management did not provide specific financial guidance for the upcoming quarter or fiscal year, citing ongoing macroeconomic risks [11] - Investors are encouraged to monitor EchoPark's contribution to profit growth and the integration of newly acquired luxury dealerships [12]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements and management's analysis for the reporting period [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Q2 2025 saw a net loss of $45.6 million due to a $172.4 million impairment, despite 5.9% revenue growth [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net loss of $45.6 million was primarily driven by a $172.4 million impairment charge Q2 and H1 2025 vs 2024 Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,657.2 M | $3,453.0 M | $7,308.5 M | $6,837.0 M | | **Gross Profit** | $602.2 M | $539.1 M | $1,168.7 M | $1,075.3 M | | **Impairment Charges** | ($172.4 M) | ($1.4 M) | ($173.8 M) | ($2.4 M) | | **Operating Income (Loss)** | ($23.3 M) | $107.7 M | $121.6 M | $214.4 M | | **Net Income (Loss)** | ($45.6 M) | $41.2 M | $25.0 M | $83.2 M | | **Diluted EPS** | ($1.34) | $1.18 | $0.72 | $2.39 | - A significant impairment charge of **$172.4 million** in Q2 2025 was the primary driver for the net loss, compared to a minimal charge of **$1.4 million** in Q2 2024[12](index=12&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $5.93 billion as of June 30, 2025, with goodwill increasing due to acquisitions Balance Sheet Summary | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,777.4 M | $2,885.5 M | | **Total Assets** | $5,930.4 M | $5,895.7 M | | **Total Current Liabilities** | $2,706.8 M | $2,637.7 M | | **Long-Term Debt** | $1,474.0 M | $1,511.9 M | | **Total Liabilities** | $4,890.2 M | $4,833.4 M | | **Total Stockholders' Equity** | $1,029.6 M | $1,062.3 M | - Goodwill increased significantly to **$573.7 million** from **$358.5 million** at year-end 2024, primarily due to acquisitions. Other Intangible Assets, net, decreased to **$255.6 million** from **$430.3 million**, reflecting the impairment charge[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow significantly improved to $332.6 million, with substantial investment in acquisitions Six Months Ended June 30, Cash Flow Summary | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $332.6 M | ($66.3 M) | | **Net Cash used in Investing Activities** | ($421.9 M) | ($61.8 M) | | **Net Cash from Financing Activities** | $155.7 M | $166.4 M | | **Net Increase (Decrease) in Cash** | $66.4 M | $38.3 M | | **Cash at End of Period** | $110.4 M | $67.2 M | - Cash from operations improved significantly in H1 2025, driven by adjustments for non-cash charges like the **$173.8 million** asset impairment and favorable changes in receivables[24](index=24&type=chunk) - Investing activities saw a large cash outflow of **$359.9 million** for business acquisitions in H1 2025, compared to none in the prior-year period[24](index=24&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail $359.9 million in acquisitions, a $172.4 million impairment, and credit facility amendments - During the first six months of 2025, the company acquired four Jaguar Land Rover businesses for an aggregate gross purchase price of approximately **$359.9 million**, adding **$215.5 million** in goodwill[39](index=39&type=chunk) - Annual impairment testing as of April 30, 2025, resulted in a non-cash pre-tax franchise asset impairment charge of **$172.4 million**, reducing the carrying value of these assets to **$255.6 million**[50](index=50&type=chunk) - The company amended its Credit Agreement on March 13, 2024, extending the maturity to March 2029 and setting aggregate commitments at **$2.4 billion**[56](index=56&type=chunk) Segment Income (Loss) Summary (Six Months Ended June 30) | Segment | 2025 Income (Loss) | 2024 Income (Loss) | | :--- | :--- | :--- | | **Franchised Dealerships** | $183.6 M | $116.4 M | | **EchoPark** | $22.0 M | $0.9 M | | **Powersports** | ($3.5 M) | ($1.7 M) | | **Total Segment Income** | $202.1 M | $115.6 M | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue growth, segment performance, and the impact of a $172.4 million impairment [Executive Summary](index=25&type=section&id=Executive%20Summary) Q2 2025 saw increased new vehicle SAAR, improved EchoPark profitability, and $10.0 million cyber insurance proceeds - The company recognized **$10.0 million** in pre-tax income from cyber insurance proceeds during Q2 2025 related to the June 2024 CDK Global outage, which was recorded as a reduction to SG&A expenses[98](index=98&type=chunk) - Franchised Dealerships Segment: Same-store retail new vehicle revenue increased **6%** in Q2 2025, but gross profit per unit decreased by **$212** due to increased price competition[100](index=100&type=chunk) - EchoPark Segment: Reported total gross profit increased **22%** in Q2 2025, driven by a **47%** increase in used vehicle gross profit[104](index=104&type=chunk) [Results of Operations – Consolidated](index=28&type=section&id=Results%20of%20Operations%20%E2%80%93%20Consolidated) Q2 2025 consolidated results show revenue growth in new vehicles, Fixed Operations, and F&I, with margin shifts Consolidated Performance by Revenue Stream (Q2 2025 vs Q2 2024) | Category | Revenue Change | Gross Profit Change | Gross Profit Per Unit Change | | :--- | :--- | :--- | :--- | | **Retail New Vehicles** | +7% | +1% | -5% | | **Retail Used Vehicles** | 0% | +8% | +8% | | **Fixed Operations** | +12% | +14% | N/A | | **F&I** | +17% | +17% | +15% | [Results of Operations – Segment Analysis](index=36&type=section&id=Results%20of%20Operations%20%E2%80%93%20Segment%20Analysis) Franchised Dealerships, EchoPark, and Powersports segments all demonstrated revenue growth and improved profitability - **Franchised Dealerships:** Same-store Fixed Operations revenue grew **10%** in Q2 2025, with gross profit up **12%**, benefiting from higher vehicle recalls, warranty repairs, and increased technician headcount[159](index=159&type=chunk) - **EchoPark:** Same-market combined retail used vehicle and F&I gross profit per unit increased by **$590 (19%)** to **$3,717** in Q2 2025, driven by higher F&I penetration and improved inventory sourcing[174](index=174&type=chunk) - **Powersports:** Reported retail new vehicle revenue increased **24%** in Q2 2025, with gross profit per unit rising **15%** to **$2,828**[183](index=183&type=chunk) [SG&A, Other Expenses, and Income Taxes](index=75&type=section&id=SG%26A%2C%20Other%20Expenses%2C%20and%20Income%20Taxes) SG&A as a percentage of gross profit improved, but a $172.4 million impairment significantly impacted income - Total SG&A expenses as a percentage of gross profit decreased to **68.5%** in Q2 2025 from **72.9%** in Q2 2024, partly due to a **$10.0 million** benefit from cyber insurance proceeds[216](index=216&type=chunk)[219](index=219&type=chunk) - Impairment charges for Q2 2025 were **$172.4 million**, primarily from the annual franchise asset impairment test, compared to **$1.4 million** in Q2 2024[224](index=224&type=chunk) - Floor plan interest expense for new vehicles decreased by **$3.7 million** in Q2 2025, driven by a lower average interest rate[227](index=227&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $775.1 million available, repurchased shares, and declared dividends Available Liquidity Resources | Resource | June 30, 2025 | | :--- | :--- | | Cash and cash equivalents | $110.4 M | | Floor plan deposit balance | $100.0 M | | Availability under Revolving Credit Facility | $320.6 M | | Availability under Mortgage and Sidecar Facilities | $244.1 M | | **Total Available Liquidity** | **$775.1 M** | - In the first six months of 2025, the company repurchased approximately **0.7 million** shares of Class A Common Stock for **$44.1 million**. The remaining share repurchase authorization is approximately **$208.2 million**[242](index=242&type=chunk) - The Board of Directors approved a cash dividend of **$0.35** per share during Q2 2025 and subsequently approved a dividend of **$0.38** per share for Q3 2025[244](index=244&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on $2.2 billion in variable rate debt, impacting interest expense - The company's variable rate debt stood at **$2.2 billion** at the end of Q2 2025, with a **1.0%** interest rate change impacting interest expense by **$11.3 million** over six months[266](index=266&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[269](index=269&type=chunk) - No material changes to internal control over financial reporting occurred during Q2 2025[270](index=270&type=chunk) [PART II – OTHER INFORMATION](index=87&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=87&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters but has recorded no significant related liabilities as of June 30, 2025 - The company is involved in various legal proceedings but recorded **no significant liabilities** for these matters as of June 30, 2025[76](index=76&type=chunk)[77](index=77&type=chunk)[274](index=274&type=chunk) [Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) An updated risk factor highlights potential negative impacts from new tariffs on imported automobiles and parts - The risk factor for tariffs and foreign trade was updated to reflect potential negative impacts from new U.S. government tariffs on imported automobiles and parts[276](index=276&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=89&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 0.1 million shares for $8.8 million, with $208.2 million remaining Share Repurchases (Q2 2025) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | — | | May 2025 | 0.1 M | $62.82 | | June 2025 | — | — | | **Total** | **0.1 M** | **N/A** | - As of June 30, 2025, the remaining availability under the company's share repurchase program was **$208.2 million**[279](index=279&type=chunk) [Other Information](index=90&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements in Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during Q2 2025[282](index=282&type=chunk) [Exhibits](index=91&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data files

Financial Data and Key Metrics Changes - Reported GAAP EPS was a loss of $1.34 per share, primarily due to a non-cash charge related to annual franchise asset impairment testing. Adjusted EPS for the second quarter was $2.19 per share, a 49% increase year over year [4] - Consolidated total revenues reached a second quarter record, up 6% year over year, while consolidated gross profit grew 12% and consolidated adjusted EBITDA increased 22% [5] Business Line Data and Key Metrics Changes - Franchise Dealership segment generated record revenues of $3.1 billion, up 6% year over year, driven by a 5% increase in same store new retail volume and a 10% increase in same store fixed operations revenues [5] - Fixed operations gross profit and F&I gross profit set all-time quarterly records, up 1215% and 14% year over year respectively on a same store basis [6] - EchoPark segment income was an all-time quarterly record of $11.7 million, with adjusted EBITDA also at a record of $16.4 million, up 128% year over year [8] - Powersports segment generated record revenues of $48.1 million, up 21% year over year, with gross profit of $12.5 million, up 17% year over year [9] Market Data and Key Metrics Changes - Same store used vehicle GPU was $3,391, down 6% year over year but up 10% sequentially from the first quarter due to a surge in pre-tariff consumer demand [6] - EchoPark segment total GPU was an all-time quarterly record of $3,747 per unit, up $669 per unit year over year [8] Company Strategy and Development Direction - The company remains focused on deploying capital via a diversified growth strategy across franchise dealerships, EchoPark, and powersports segments to grow revenue and enhance shareholder returns [11] - The acquisition of four Jaguar Land Rover dealerships in California is expected to contribute approximately $500 million in annualized revenues to the franchise dealership segment [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty regarding the impact of tariffs on vehicle pricing, they have not seen a material impact to date [12] - The company is confident in its strategy and team to adapt to ongoing changes in the automotive retail environment and macroeconomic backdrop [13] Other Important Information - The Board of Directors approved a 9% increase to the quarterly cash dividend to $0.38 per share, payable on October 15, 2025 [11] - The company ended the quarter with $775 million in available liquidity, including $210 million in cash and floor plan deposits [10] Q&A Session Summary Question: What surprised you the most in Q2? - Management noted that the business picked up nicely in the back half of July, which was unexpected given the tariff noise [18] Question: Can you elaborate on the lease return expectations? - Management indicated that lease returns are expected to improve significantly in 2026, which will positively impact used vehicle inventory and volume growth [24][25] Question: What is the strategy regarding EchoPark's volume and profitability? - Management is being cautious with inventory management to maximize margins, which has resulted in strong gross dollars despite lower volume [30] Question: How did the new vehicle GPU trend throughout the quarter? - New vehicle GPUs were stronger at the beginning of the quarter, with April at approximately $3,600, May at $3,250, and June at $3,300 [40][42] Question: What are the expectations for new vehicle SAAR trajectory? - Management expects the SAAR to be in the range of 15 million to 16 million, depending on interest rates and market conditions [62]