Employment and Workforce - As of December 31, 2025, the company had 20,452 employees, with 13,563 in the U.S. and 6,889 in the U.K.[72] - The company is focused on human capital management to attract and retain top talent, fostering a workplace culture around core values[71] Inventory and Sales - The new vehicle days' supply of inventory was approximately 46 days as of December 31, 2025, compared to 44 days in 2024 and 37 days in 2023[96] - The company’s operations are subject to seasonal variations, with higher vehicle sales typically occurring in the second and third quarters in the U.S.[76] - The U.K. government has established higher mandated targets for the sale of new zero emissions vehicles for 2026, which may challenge new vehicle sales[87] - The company relies on vehicle manufacturers for new vehicle inventory, and any reduction in financial assistance from OEM partners could negatively impact sales volumes and profitability[94] - Increased competition from new manufacturers, particularly in the U.S. market, could reduce demand for vehicles sold by existing dealerships[98] - The automotive retail industry is highly competitive, with significant pressure from both franchised dealerships and online platforms affecting sales and margins[101] Financial Risks and Costs - The company is experiencing risks related to tightening credit markets, which may decrease the availability or increase the costs of automotive loans and leases, adversely impacting new and used vehicle sales[84] - Inflation and increased energy costs could adversely impact operations and customer demand for vehicles, parts, and services[83] - The company’s debt securities are rated just below investment-grade, and any downgrade could negatively impact access to debt markets and increase borrowing costs[91] - Increased capital and operating costs due to ongoing efforts to improve data security and protect against cybersecurity risks[116] - Insurance coverage does not fully cover operational risks, and changes in insurance costs could materially increase expenses or reduce coverage[118] Regulatory and Compliance Challenges - The company faces potential adverse impacts from executive orders issued by the Trump Administration, including the elimination of the EV mandate and changes to environmental regulations[86] - Regulatory changes, such as the FTC's new regulations for automotive dealers, could impose significant compliance costs and affect transaction processes[131] - The company is subject to stringent environmental, health, and safety laws, which may expose it to substantial costs and liabilities[134] - The California Climate Corporate Data Accountability Act mandates public disclosure of greenhouse gas emissions for companies with annual revenues over $1 billion, starting in 2026[127] - The company may face legal and regulatory scrutiny regarding sustainability claims, which could result in reputational harm and increased litigation risks[130] Market and Competitive Landscape - In the U.K., Chinese-branded vehicles increased their market share from approximately 8% in 2024 to approximately 13% in 2025, posing a competitive threat to existing dealerships[98] - A manufacturer in the U.K. disclosed a five-year plan to reduce the number of partners in its dealer network, potentially requiring the closure of up to 16 dealerships[99] - Vehicle technology advancements, including autonomous vehicles and ride-sharing models, could adversely impact new and used vehicle sales volumes and service revenues[109] Operational Risks - Cybersecurity incidents, such as the one experienced by CDK Global in June 2024, could disrupt operations and negatively affect financial conditions[110] - The reliance on third-party vendors for critical operational processes poses risks, as disruptions could materially impact business operations[110] - Natural disasters and adverse weather events may disrupt dealership operations, potentially impacting financial results and cash flows[121] - The company faces risks related to the integration of acquired dealerships, which could affect revenue and operational synergies[106] Financial Performance and Impairments - In the year ended December 31, 2025, the company recorded $93.0 million in goodwill impairments, while no impairments were recorded in 2024 and 2023[138] - The company recognized intangible franchise rights impairment of $91.1 million, $28.2 million, and $25.1 million for the years ended December 31, 2025, 2024, and 2023, respectively[138] - The company may face additional impairment charges if market and industry conditions deteriorate, which could adversely affect cash flows[138] Accounting and Reporting Changes - New SEC rules and accounting standards could increase operating costs and result in changes to financial statements[139] - Changes in accounting guidance or interpretations could significantly alter reported financial performance and may lead to litigation or regulatory actions[140] - The company has designed and implemented internal controls, but any failure or circumvention could materially affect business and financial condition[141]

Core Viewpoint - Group 1 Automotive has announced an increase in its annual dividend rate for 2026 to $2.20 per share, reflecting a 10% increase from the previous year's rate of $2.00 per share [1]. Group 1 Automotive Overview - Group 1 Automotive operates 257 dealerships and 318 franchises across the U.S. and U.K., offering 36 brands of automobiles [1]. - The company provides a range of services including the sale of new and used cars, vehicle financing, service and insurance contracts, automotive maintenance and repair, and vehicle parts [1]. Dividend Declaration - The board of directors has declared a quarterly dividend of $0.55 per share, which will be payable on March 16, 2026, to stockholders of record as of March 2, 2026 [1].

Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying stocks that can fulfill their potential is challenging [1] Group 1 Automotive Overview - Group 1 Automotive (GPI) is recommended by the Zacks Growth Style Score system, which evaluates a company's growth prospects beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong potential for growth [2] Earnings Growth - Historical EPS growth rate for Group 1 Automotive is 11.6%, with projected EPS growth of 7.9% this year, surpassing the industry average of 6.6% [5] Asset Utilization Ratio - Group 1 Automotive has an asset utilization ratio (sales-to-total-assets ratio) of 2.22, indicating it generates $2.22 in sales for every dollar in assets, compared to the industry average of 1.65 [7] - The company's sales are expected to grow by 3.3% this year, exceeding the industry average of 2.5% [7] Earnings Estimate Revisions - There have been upward revisions in current-year earnings estimates for Group 1 Automotive, with the Zacks Consensus Estimate increasing by 0.6% over the past month [9] Conclusion - Group 1 Automotive has achieved a Growth Score of A and a Zacks Rank of 2 due to positive earnings estimate revisions, positioning it well for outperformance in the growth investment space [11]

Core Insights - Group 1 Automotive (GPI) reported a fourth-quarter 2025 adjusted earnings per share (EPS) of $8.49, a decrease of 15.3% year over year from $10.02, and missed the Zacks Consensus Estimate of $9.36 [1] - The company registered net sales of $5.58 billion, slightly up from $5.50 billion in the same quarter last year, but below the Zacks Consensus Estimate of $5.66 billion [1] GPI's Q4 Highlights - New vehicle retail sales fell 3.2% year over year to $2.77 billion, missing projections of $2.87 billion, with total retail new vehicles sold at 55,035 units, down 5% year over year [2] - The average selling price per new vehicle increased by 3.3% year over year to $52,776, while gross profit from new vehicle retail was $181.3 million, down 11.6% year over year [2] Used-Vehicle Sales Performance - Used-vehicle retail sales rose 5.2% year over year to $1.74 billion, surpassing forecasts of $1.67 billion, with total retail used vehicles sold at 55,474 units, a slight increase of 0.2% year over year [3] - The average selling price per used vehicle was $31,407, up 5.1% year over year, but gross profit from this segment decreased by 9.4% to $71.8 million [3] Wholesale and Parts & Service Performance - Used-vehicle wholesale sales increased by 11.4% year over year to $143.6 million, although it missed expectations of $149.4 million, with a gross loss of $2.7 million compared to a loss of $1.7 million in the previous year [4] - Parts and Service revenues rose 2.9% year over year to $700.2 million, with gross profit increasing by 6.3% to $394.2 million [4] Segment Performance - U.S. business segment revenues increased by 0.4% year over year to $4.25 billion, exceeding forecasts of $4.11 billion, but gross profit fell by 0.7% to $691.2 million, missing predictions of $707.9 million [5] - The U.K. business segment saw revenues jump 1.4% year over year to $1.33 billion, missing estimates of $1.52 billion, with gross profit slightly declining by 0.1% to $183.2 million [6] Financial Position - Selling, general and administrative expenses rose by 2.1% year over year to $627.3 million, while cash and cash equivalents decreased to $32.5 million from $34.4 million a year earlier [7] - Total debt increased to $3.70 billion as of December 31, 2025, up from $2.91 billion a year prior [7] Share Repurchase Activity - During the quarter, GPI repurchased 755,792 shares at an average price of $403.60 per share, totaling $305 million, with $378.7 million remaining on its authorized stock buyback program as of December 31, 2025 [8]

Group 1 - Group 1 Automotive (GPI) has experienced a downtrend with a 7.7% decline in stock price over the past four weeks, but it is now in oversold territory, indicating a potential for a turnaround [1] - The Relative Strength Index (RSI) for GPI is currently at 27.3, suggesting that the heavy selling pressure may be exhausting itself and a price reversal could occur soon [5] - Analysts have raised earnings estimates for GPI by 0.6% over the last 30 days, indicating a consensus that the company may report better earnings than previously predicted, which typically leads to price appreciation [7] Group 2 - GPI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8]

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenues of $5.6 billion in Q4 and over $3.6 billion in gross profit for the full year, including nearly $1.6 billion from parts and service [6][11] - Adjusted net income for Q4 was $105 million, with adjusted diluted EPS of $8.49 from continuing operations [11] - Gross profit margin in the U.S. saw a slight decline in new vehicle sales, while used vehicle revenues increased approximately 4% [12][14] Business Line Data and Key Metrics Changes - Parts and service gross profit reached record levels, contributing significantly to overall profitability [4][6] - F&I (Finance and Insurance) performance improved, with PRU (Per Retail Unit) increasing by 13% in the U.K. [9][15] - Used vehicle operations held volumes flat year-over-year, but GPUs (Gross Profit per Unit) declined approximately 8% on a same-store basis due to higher acquisition costs [12][14] Market Data and Key Metrics Changes - In the U.K., new vehicle same-store volumes declined by 8.2%, while used vehicle same-store revenues increased over 9% [14][15] - The U.K. market faced challenges from weak economic growth, inflation, and increased competition from new entrants, particularly Chinese OEMs [7][31] - Chinese OEMs' market share leveled off at around 12%, impacting competitive dynamics in the U.K. [31] Company Strategy and Development Direction - The company is focused on operational excellence and capital deployment towards high-growth opportunities, including acquisitions of brands like Lexus and Acura [6][7] - Restructuring initiatives in the U.K. aim to improve efficiency and profitability, with ongoing adjustments to the operational model [7][16] - The company emphasizes the importance of aftersales and F&I as stabilizers in the U.K. operations while leveraging U.S. best practices [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating near-term challenges while building a resilient platform for long-term growth [10][69] - The macroeconomic environment remains dynamic, with a focus on controlling costs and improving operational efficiency [9][10] - There is a belief in the potential for organic growth in both the U.S. and U.K. markets, particularly in aftersales and used vehicle segments [50][51] Other Important Information - The company disposed of 13 dealerships, generating approximately $775 million in annualized revenue, while also repurchasing over 10% of outstanding shares [7][18] - Liquidity as of December 31 was $883 million, with cash flow generation yielding $699 million of adjusted operating cash flow [17][18] Q&A Session Summary Question: What were the impairments tied to this quarter? - Impairments were primarily related to the U.S. business, particularly within the Audi brand and the Maryland/D.C. market [21][22] Question: Are there specific productivity actions in the U.S.? - The company is deploying AI and productivity tools across various operations, leading to improved technician productivity and lower costs [24][25] Question: What is the status of the U.K. restructuring plan? - The restructuring is in the early stages, with ongoing adjustments to meet acceptable profit levels [29][30] Question: How do Chinese OEMs impact the market? - Chinese OEMs have leveled off at around 12% market share, but the company feels well-positioned due to its focus on luxury brands [31][32] Question: What are the expectations for used GPUs and SG&A post-restructuring? - Used GPUs are expected to improve with better discipline in the U.K., while SG&A is targeted to be around 80% on a long-term basis [39][40] Question: What is the outlook for lease returns and their impact? - An increase in lease returns is expected to provide a controlled source of premium used cars, positively impacting the used car business [52][53] Question: What are the expectations for the used vehicle market in the U.S.? - The company is optimistic about the used car opportunity, focusing on disciplined acquisition and leveraging AI for smarter purchasing decisions [60][61]

Financial Data and Key Metrics Changes - In 2025, Group 1 Automotive achieved record revenues of $5.6 billion in Q4 and over $3.6 billion in gross profit for the full year, including nearly $1.6 billion from parts and service [6][11][12] - Adjusted net income for Q4 was $105 million, with adjusted diluted EPS of $8.49 from continuing operations [11] - Gross profit from customer pay and warranty increased approximately 5% and 11% respectively, with overall U.S. business demonstrating strong performance [13][14] Business Line Data and Key Metrics Changes - Parts and service gross profit reached record levels, contributing significantly to overall profitability [4][6] - New vehicle sales in the U.S. declined slightly, while used vehicle operations held volumes flat but increased revenues by approximately 4% [11][12] - F&I gross profits grew nearly 3% in Q4, reflecting improved product penetration across categories [12][15] Market Data and Key Metrics Changes - In the U.K., new vehicle same-store volumes declined 8.2%, while used vehicle same-store revenues increased over 9% [14][15] - The U.K. market faced challenges including weak economic growth and increased competition from new entrants, particularly Chinese OEMs, which held a market share of around 12% [7][31] - The macroeconomic environment in the U.K. remains difficult, with inflation and margin pressure impacting operations [7][14] Company Strategy and Development Direction - Group 1 is focused on operational excellence and capital deployment towards high-value acquisitions, including brands like Lexus and Acura [6][7] - The company is executing restructuring initiatives in the U.K. to improve efficiency and profitability, including reducing headcount and consolidating operations [7][16] - There is an emphasis on leveraging U.S. operational practices in the U.K. to enhance aftersales performance and customer service [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating near-term challenges while building a resilient platform for long-term growth [10][69] - The focus remains on controlling costs, managing inventory, and enhancing operational efficiency in response to evolving macroeconomic conditions [9][10] - There is a belief in the potential for organic growth in both the U.S. and U.K. markets, particularly in aftersales and F&I [50][51] Other Important Information - The company disposed of 13 dealerships generating approximately $775 million in annualized revenue while acquiring new dealerships expected to generate $640 million [6][7] - As of December 31, liquidity stood at $883 million, with a rent-adjusted leverage of 3.1 times [16][17] - The company repurchased over 10% of its outstanding shares in 2025, with ongoing buyback plans [17][18] Q&A Session Summary Question: What were the impairments tied to this quarter? - Impairments were primarily related to the U.S. business, particularly within the Audi brand and the Maryland/D.C. market [21][22] Question: Are there specific productivity actions in the U.S. that could impact SG&A? - AI tools are being deployed across various business areas to enhance productivity, with tangible results in technician retention and operational efficiency [24][25][26] Question: What is the status of the U.K. restructuring plan? - The restructuring is ongoing, with more work to be done, and costs will be adjusted throughout 2026 [29][30] Question: How do Chinese OEMs impact the market? - Chinese OEMs have leveled off at around 12% market share, and while they are not slowing down, Group 1 feels well-positioned due to its focus on luxury brands [31][32] Question: What are the expectations for used GPUs and SG&A in the future? - Used GPUs in the U.S. are currently higher than pre-COVID levels, with expectations for improvement in the U.K. as operational discipline is instilled [39][40] Question: How does the company view lease returns impacting the used car market? - An increase in lease returns is expected to provide a controlled source of premium used cars, which is beneficial for the business [52][53]

Financial Data and Key Metrics Changes - In Q4 2025, Group 1 Automotive reported revenues of $5.6 billion, gross profit of $874 million, adjusted net income of $105 million, and adjusted diluted EPS of $8.49 from continuing operations [10] - For the full year, the company achieved record gross profit exceeding $3.6 billion, with parts and service gross profit reaching nearly $1.6 billion [5] - The company sold 459,000 new and used vehicles in 2025, marking another record [5] Business Line Data and Key Metrics Changes - U.S. new vehicle sales saw a slight decline, while used vehicle operations held volumes flat, with revenues increasing approximately 4% [10][11] - F&I gross profits grew nearly 3%, reflecting improved product penetration across nearly all categories [11] - In the U.K., same-store revenues grew across most business lines, with used vehicle same-store revenues up over 9% [13][14] Market Data and Key Metrics Changes - In the U.K., new vehicle same-store volumes declined by 8.2%, while local currency GPUs moderated by 3.2% [13] - The U.K. market faced challenges including weak economic growth, persistent inflation, and increased competition from new entrants [6] - Chinese OEMs' market share leveled off at around 12%, impacting competition dynamics [31] Company Strategy and Development Direction - The company is focused on operational excellence, disciplined capital management, and enhancing aftersales services [67] - Strategic acquisitions in growth markets were made, including Lexus and Acura dealerships in the U.S. and Toyota and Lexus dealerships in the U.K. [5] - The company is executing restructuring initiatives in the U.K. to improve operational efficiency and profitability [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating near-term challenges while building long-term value for shareholders [67] - The macro environment in the U.S. remains dynamic, with a focus on cost management and prioritizing areas that generate durable returns [8] - The company anticipates opportunities for organic growth in both the U.S. and U.K. markets [50] Other Important Information - The company disposed of 13 dealerships comprising 32 franchises, generating approximately $775 million in annualized revenue [6] - The company repurchased over 10% of its outstanding shares in 2025, with additional repurchases occurring in early 2026 [18] - As of December 31, the company had liquidity of $883 million, supporting flexible capital allocation [17] Q&A Session Summary Question: What were the impairments tied to this quarter? - The impairments were primarily related to the U.S. business, particularly within the Audi brand and the Maryland/D.C. market [21] Question: Are there specific productivity actions being undertaken in the U.S.? - The company is utilizing AI across various operations, enhancing productivity and reducing technician turnover [25] Question: What is the status of the U.K. restructuring plan? - The restructuring is in the earlier stages, with ongoing adjustments to meet acceptable profit levels [28] Question: How do the economic headwinds compare to increased penetration from Chinese OEMs? - Chinese OEMs' market share has leveled off, but the company feels well-positioned due to its focus on luxury brands [31] Question: What is the expected trend for used GPUs and SG&A as a percentage of GP post-restructuring? - The company targets used GPUs to improve in the U.K. and aims for SG&A to be around 80% on a long-term basis [39] Question: How does the company view the impact of lease returns on the used car business? - The increase in lease returns is expected to provide a controlled source of premium used cars, positively impacting the business [52] Question: What are the expectations for the used vehicle market in the U.S.? - The company is optimistic about the used car opportunity, focusing on disciplined acquisition strategies [58]

2 *Based on the 2025 Pied Piper PSI Service Telephone Effectiveness Study **As of January 28, 2026 3 • Continued process improvements • Ongoing investment in attracting and retaining talent $2,858 $2,767 $1,653 $1,739 $226 $230 $680 $700 4Q24 4Q25 Consolidated Revenues 1% 3% 2% 5% (3)% $2,798 $2,672 New Vehicle Retail Used Vehicle Retail Finance & Insurance Parts & Service $5,546 $5,580 Same Store Revenues Increased in 2025 by 11.8% and 4.1% on an actual and same store basis, respectively, compared to 2024 ...

分组1 - Group 1 Automotive reported quarterly earnings of $8.49 per share, missing the Zacks Consensus Estimate of $9.36 per share, and down from $10.02 per share a year ago, representing an earnings surprise of -9.25% [1] - The company posted revenues of $5.58 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 1.39%, and slightly up from $5.55 billion year-over-year [2] - Group 1 Automotive shares have increased by about 0.8% since the beginning of the year, compared to the S&P 500's gain of 1.9% [3] 分组2 - The earnings outlook for Group 1 Automotive is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The estimate revisions trend for Group 1 Automotive was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $10.02 on revenues of $5.67 billion, and for the current fiscal year, it is $43.95 on revenues of $23.32 billion [7] 分组3 - The Automotive - Retail and Whole Sales industry is currently in the top 40% of over 250 Zacks industries, with the top 50% of Zacks-ranked industries outperforming the bottom 50% by more than 2 to 1 [8] - Penske Automotive, another company in the same industry, is expected to report quarterly earnings of $3.23 per share, reflecting a year-over-year change of -8.8%, with revenues expected to be $7.68 billion, down 0.5% from the previous year [9][10]