Company Overview - AutoNation, Inc. is a leading automotive retailer in the United States, operating through three main segments: Domestic, Import, and Premium Luxury, offering new and used vehicle sales, automotive repair and maintenance, and automotive finance and insurance products [1] Market Outlook - Analysts have maintained a consistent average price target of $220 for AutoNation's stock over the past year, indicating a stable view of the company's valuation and market potential [2][6] - JPMorgan analyst Rajat Gupta has increased the price target from $205 to $230, reflecting a positive outlook on the company's franchise dealer estimates, while maintaining a Neutral rating [3][6] Financial Performance - AutoNation has a strong track record of surpassing earnings expectations, which bodes well for its upcoming quarterly report, demonstrating impressive earnings surprises and a favorable financial outlook [4][6] - The company has maintained strong service revenue and effective capital returns despite uncertainties surrounding auto tariffs [4] Competitive Position - AutoNation is highlighted as a broker-adored stock, noted for its strong earnings history and strategic growth initiatives, positioning it as a strong contender in the automotive retail sector [5]

O'Reilly Automotive (ORLY) reported $4.71 billion in revenue for the quarter ended September 2025, representing a year-over-year increase of 7.8%. EPS of $0.85 for the same period compares to $0.76 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $4.7 billion, representing a surprise of +0.21%. The company delivered an EPS surprise of +2.41%, with the consensus EPS estimate being $0.83.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings ...

Financial Data and Key Metrics Changes - Quarterly revenue was $9.7 billion, up 4.9% year-over-year, and adjusted diluted EPS was $9.50, up 17% [5][17] - Same-store revenues for the quarter increased 7.7%, driven by growth in every business line [7] - Total gross profit increased 3.2%, with total vehicle GPU at $4,109, down $216 year-over-year [7][9] Business Line Data and Key Metrics Changes - New retail revenue grew 5.5%, with units up 2.5%, while new GPU was $2,867, down $348 sequentially [7] - Used retail revenue increased by 11.8% over last year, driven by a 6.3% increase in unit growth and higher average selling prices [7] - After-sales revenue increased 3.9%, with gross profit rising 9.1% and margins expanding to 58.4%, up 280 basis points year-over-year [9] Market Data and Key Metrics Changes - North America's adjusted SG&A was flat sequentially at 64.8%, reflecting cost discipline despite normalization of GPUs [10][17] - In the UK, SG&A was in the high 80% range, with macro and mixed headwinds pressuring margins and labor costs [28][19] Company Strategy and Development Direction - The company aims to capture market share and increase customer loyalty, focusing on high ROI used vehicles and after-sales services [6][12] - Strategic acquisitions remain a core pillar, with a target of $2 billion acquisition revenue estimate for 2025 [13][14] - The company is prioritizing share repurchases, buying back 5.1% of outstanding shares at prices that will drive long-term accretion [12][22] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong top-line growth across all business lines, with a focus on execution and cost control [5][6] - The company is optimistic about its ability to convert momentum into share gains and sustained cost efficiency [6][12] - Management noted that the UK market is challenging but is responding with specific initiatives to improve productivity and profitability [19][29] Other Important Information - Vehicle inventory and carrying costs improved, with new day supply at 52 days, a decrease of 11 days sequentially [9] - Financing operations income was $19 million in the quarter, with a net interest margin of 4.6%, up 70 basis points year-over-year [20] Q&A Session Summary Question: Can you talk about EVs and their impact on sales and GPU? - Management noted that electrified vehicles made up 43% of total new car mix, with significant sales driven by federal credits and manufacturer incentives [24][25] Question: What is the outlook for the UK market given the labor challenges? - Management acknowledged the impact of labor costs and minimum wage increases but highlighted improvements in operational net profit in parts and service [28][29] Question: How is the used market performing amid subprime turmoil? - Management indicated that the used car market presents opportunities, particularly in the value auto segment, which is driven by higher credit quality customers [36][38] Question: What is the company's strategy regarding acquisitions and buybacks? - Management confirmed a hard target of $2 billion for acquisitions, with excess cash flow likely directed towards buybacks if acquisition opportunities do not meet return thresholds [73][76] Question: Can you elaborate on the used performance and what drove the growth? - Management attributed the growth in used car sales to a focused strategy and improved messaging, with a significant increase in self-sourcing from consumers [79][82]

Financial Data and Key Metrics Changes - Quarterly revenue was USD 9.7 billion, up 4.9% year-over-year, and adjusted diluted EPS was USD 9.50, up 17% [5][17] - Same-store revenues for the quarter increased 7.7%, with total gross profit increasing 3.2% despite normalization of front-end gross profit units (GPUs) [6][7] - Adjusted SG&A as a percentage of gross profit was 67.9% compared to 66% a year ago, with North America's adjusted SG&A flat sequentially at 64.8% [17][18] Business Line Data and Key Metrics Changes - New retail revenue grew 5.5%, with units up 2.5%, while new GPU was USD 2,867, down USD 348 sequentially [7] - Used retail revenue increased by 11.8% year-over-year, driven by a 6.3% increase in unit growth and higher average selling prices [7][8] - After-sales revenue increased 3.9%, with gross profit rising 9.1% and margins expanding to 58.4%, up 280 basis points year-over-year [9] Market Data and Key Metrics Changes - Vehicle inventory and carrying costs improved, with new day supply at 52 days, a decrease of 11 days sequentially [9] - Financing operations income was USD 19 million in the quarter, with a net interest margin of 4.6%, up 70 basis points year-over-year [19] - The used car market showed strong performance, with value segments delivering a 22.3% unit increase year-over-year [8][36] Company Strategy and Development Direction - The company aims to capture market share and increase customer loyalty, focusing on high ROI used vehicles and after-sales services [6][12] - Strategic acquisitions remain a core pillar, with a target of USD 2 billion in acquisition revenue for 2025 [13][14] - The company is simplifying its tech stack and increasing sales efficiency through digital platforms, enhancing customer experience [10][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong top-line growth across all business lines, with a focus on execution and cost control [5][6] - The company is optimistic about future performance, expecting to convert momentum into share gains and sustained cost efficiency [6][12] - Management acknowledged challenges in the UK market but emphasized ongoing improvements in productivity and cost management [18][30] Other Important Information - The company repurchased 5.1% of outstanding shares at an average price of USD 312, prioritizing share buybacks due to stock trading at a discount [12][21] - Driveway Finance Corporation continues to build a stable earnings base with healthy spreads and disciplined underwriting [11][19] Q&A Session Summary Question: Discussion on EV inventory and sales - Management noted that electrified vehicles constituted 43% of total new car mix, with significant sales driven by federal credits and manufacturer incentives [24][25] Question: UK market conditions and cost efficiencies - Management discussed labor cost impacts and ongoing initiatives to improve productivity and market share in the UK [27][28] Question: Overview of the used market and subprime impact - Management highlighted opportunities in the used car market, particularly in the value auto segment, which is less affected by subprime issues [34][35] Question: UK regulatory environment for EVs - Management indicated that growth in the UK is currently driven by ICE vehicles rather than electrified ones, with expectations of more regulations in the future [40][41] Question: U.S. EV sales and profitability - Management acknowledged that margins on EVs are lighter, but emphasized strong customer loyalty and repeat purchases in the EV segment [49][52] Question: M&A opportunities and targets - Management confirmed a hard target of USD 2 billion in acquisitions for the year, with a focus on maintaining return thresholds [70][71] Question: Used performance and future expectations - Management expressed confidence in continued positive comps in used vehicle sales, citing a strong focus on quality and customer experience [78][81]

Financial Data and Key Metrics Changes - Quarterly revenue was $9.7 billion, up 4.9% year over year, and adjusted diluted EPS was $9.5, up 17% [5][6] - Same store revenues for the quarter increased 7.7%, driven by growth in every business line [7] - Total gross profit increased 3.2%, with total vehicle GPU at $4,109, down $216 year over year [8][6] Business Line Data and Key Metrics Changes - New retail revenue grew 5.5% with units up 2.5%, while used retail revenue increased 11.8% driven by a 6.3% increase in unit growth [9][10] - Aftersales revenue increased 3.9%, with gross profit rising 9.1% and margins expanding to 58.4%, up 280 basis points year over year [13] - F and I revenue was up 5.7%, with F and I per retail unit reaching $18.47, up $20 year over year [12] Market Data and Key Metrics Changes - Domestic brand performance improved, while luxury brands performed the weakest year over year [9] - The UK market faced challenges with increased labor costs and regulatory pressures, but the company is improving productivity [14][37] Company Strategy and Development Direction - The company is focused on capturing market share and increasing customer loyalty, with a strategic emphasis on used vehicles and aftersales [6][11] - The acquisition strategy remains disciplined, targeting $2 billion in acquisition revenue for 2025, with a focus on high ROI opportunities [18][19] - The company aims to leverage its omnichannel platform to enhance customer experience and operational efficiency [14][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of cost control and productivity gains in navigating a mixed customer backdrop [6][22] - The company expects to finish strong in 2025 and continue building value through its ecosystem [6][21] - Management expressed confidence in the long-term growth potential, emphasizing the flexibility of their cash engine and acquisition strategy [18][28] Other Important Information - The company repurchased 5.1% of its outstanding shares this quarter, prioritizing share buybacks due to stock trading at a discount [16][27] - Driveway Finance Corporation reported $19 million in financing operations income for the quarter, with a net interest margin of 4.6% [25][26] Q&A Session Summary Question: EV sales and inventory management - Management noted that electrified vehicles made up 43% of total new car mix, with significant sales driven by manufacturer incentives [30][31] Question: UK market conditions and labor costs - Management discussed the impact of increased labor costs and regulatory changes, emphasizing self-help initiatives to improve productivity [36][37] Question: Used car market dynamics - Management highlighted opportunities in the used car market, particularly in the value auto segment, with a focus on sourcing directly from consumers [44][46] Question: M&A strategy and targets - Management reiterated the $2 billion acquisition target for the year, emphasizing a disciplined approach to acquisitions [81][82]

Financial Data and Key Metrics Changes - Quarterly revenue was $9.7 billion, up 4.9% year-over-year, and adjusted diluted EPS was $9.50, up 17% [4][17] - Same-store revenues for the quarter increased 7.7%, driven by growth in every business line [6] - Total gross profit increased 3.2%, with total vehicle GPU at $4,109, down $216 year-over-year [6][8] Business Line Data and Key Metrics Changes - New retail revenue grew 5.5%, with units up 2.5%, while new GPU was $2,867, down $348 sequentially [6] - Used retail revenue increased by 11.8% over last year, driven by a 6.3% increase in unit growth and higher average selling prices [6][7] - After-sales revenue increased 3.9%, with gross profit rising 9.1% and margins expanding to 58.4%, up 280 basis points year-over-year [8] Market Data and Key Metrics Changes - The used vehicle performance outperformed the industry, with value segments delivering a 22.3% unit increase year-over-year [7] - In the UK, SG&A as a percentage of gross profit was high, reflecting market challenges and labor costs [9][18] Company Strategy and Development Direction - The company aims to capture market share and increase customer loyalty, focusing on high ROI used vehicles and after-sales services [5][11] - Strategic acquisitions remain a core pillar, with a target of $2 billion acquisition revenue estimate for 2025 [12][13] - The company is focused on investing where it can create the most shareholder value, prioritizing share repurchases and selective acquisitions [11][21] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong top-line growth across all business lines and emphasized the importance of cost control and operational efficiency [4][5] - The company is optimistic about its ability to convert momentum into share gains and sustained cost efficiency [5][20] - Management acknowledged challenges in the UK market but expressed confidence in the team's ability to respond effectively [18][27] Other Important Information - The company reported adjusted SG&A as a percentage of gross profit at 67.9%, reflecting cost discipline despite normalization of GPUs [17] - Financing operations income was $19 million in the quarter, with a net interest margin of 4.6%, up 70 basis points year-over-year [19] Q&A Session Summary Question: Discussion on EV inventory and sales - Management noted that electrified vehicles constituted 43% of total new car mix, with significant sales driven by federal incentives and manufacturer support [23][24] Question: Overview of the used market and subprime impact - Management indicated that the used car market presents opportunities, particularly in the value auto segment, which is driven by higher credit quality customers [30][31] Question: UK market performance and regulatory environment - Management discussed challenges in the UK, including labor costs and market conditions, but highlighted improvements in parts and service profitability [26][27] Question: U.S. versus UK performance comparison - Management reported strong performance in the U.S. with significant growth in used cars, while UK profitability was only slightly down year-over-year [49][50] Question: M&A opportunities and targets - Management confirmed a hard target of $2 billion in acquisitions for the year, emphasizing a disciplined approach to capital allocation [53][56]

Core Viewpoint - Analysts project AutoNation (AN) will report quarterly earnings of $4.85 per share, a 20.7% increase year over year, with revenues expected to reach $6.86 billion, up 4.1% from the same quarter last year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 0.1%, indicating a collective reconsideration by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong relationship between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Revenue- Other' at $5.43 million, reflecting a decrease of 24.5% year over year [5]. - The consensus for 'Revenue- New Vehicle' is $3.33 billion, indicating a 5% increase from the previous year [5]. - 'Revenue- Used Vehicle' is expected to be $1.93 billion, showing a 1.7% increase from the year-ago quarter [5]. - 'Revenue- Parts and service' is projected to reach $1.24 billion, a 5.5% increase from the prior year [6]. Vehicle Sales and Metrics - Total retail vehicle unit sales are expected to be 133,511, up from 129,604 in the same quarter last year [6]. - 'Revenue per vehicle retailed - New' is forecasted at $50,923.59, compared to $50,217.00 from the previous year [6]. - 'Revenue per vehicle retailed - Used' is estimated at $26,737.32, up from $26,205.00 year over year [7]. - 'Gross profit per vehicle retailed - Finance and insurance' is expected to be $2,639.71, compared to $2,588.00 last year [7]. - 'Retail vehicle unit sales - Used' are projected at 68,140, compared to 66,454 in the same quarter last year [8]. - 'Retail vehicle unit sales - New' are estimated at 65,371, up from 63,150 year over year [8]. - 'Gross profit per vehicle retailed - Used' is forecasted at $1,513.42, down from $1,589.00 last year [8]. - 'Gross profit per vehicle retailed - New' is expected to be $2,499.23, compared to $2,804.00 from the previous year [9]. Stock Performance - AutoNation shares have returned -0.8% over the past month, while the Zacks S&P 500 composite has changed by +1.1% [10].

Core Insights - Lithia Motors exceeded Q3 revenue and EPS estimates, indicating strong performance in the automotive sector [1] Group 1: Financial Performance - The company reported robust used vehicle sales, contributing significantly to revenue growth [1] - There was an expansion in high-margin after-sales growth, further enhancing profitability [1] Group 2: Market Position - The strong performance in Q3 positions Lithia Motors favorably within the competitive automotive market [1]

Core Viewpoint - CarMax, Inc. is under investigation for potential violations of federal securities laws, following disappointing financial results and claims regarding its assessment of car loan risks [1][2]. Financial Performance - CarMax reported a 5.4% decline in retail used unit sales, a 6.3% decline in comparable store used unit sales, and a 2.2% decline in wholesale units for Q2 of fiscal year 2026 [4]. - The company's net earnings for Q2 were approximately $95.4 million, down from $132.8 million in the previous year [4]. - A significant factor for the declines was identified as a "pull forward" in demand due to U.S. tariffs, which led to a loan loss provision of $142.2 million in the financing segment, resulting in an 11.2% year-over-year decrease in income from this segment [4]. Stock Market Reaction - Following the announcement of its disappointing financial results, CarMax's stock price fell by $11.45 per share, approximately 20%, from $57.05 on September 24, 2025, to $45.60 on September 25, 2025 [5]. Investigation Context - The investigation stems from claims that CarMax misrepresented the sustainability of demand for its vehicles and failed to properly assess the risks associated with its car loans [2][3].

Core Insights - Lithia & Driveway (LAD) reported the highest third quarter revenue in company history, with a revenue increase of 5% to $9.7 billion compared to $9.2 billion in Q3 2024, and a diluted earnings per share increase of 11% to $8.61 from $7.73 in the same period [1][2] Financial Performance - Third quarter 2025 net income was $219 million, a slight decrease of 1.1% from $221 million in Q3 2024. However, adjusted net income increased by 9% to $241 million from $221 million in the same period [2] - For the first nine months of 2025, revenues increased by 5% to $28.4 billion compared to $27.0 billion in 2024. Diluted earnings per share for the same period rose by 23% to $26.42 from $21.47 [4][5] Operational Highlights - The company achieved a 7.7% increase in total revenue on a same-store basis compared to Q3 2024, with used retail revenue increasing by 11.8% [13] - The company repurchased approximately 1,312,000 shares at a weighted average price of $312 during Q3 2025, with a total of 2,168,000 shares repurchased year-to-date at an average price of $313 [9] Corporate Development - In September 2025, LAD expanded its network in the Southeast region by acquiring Palm Beach Acura, West Palm Beach Hyundai, and West Palm Beach Genesis, which are expected to add $220 million in annualized revenue [6] - As of September 30, 2025, LAD had acquired $620 million of expected annualized revenues year-to-date [7] Dividend and Shareholder Returns - The Board of Directors approved a dividend of $0.55 per share related to Q3 2025 financial results, expected to be paid on November 21, 2025 [8]