Financial Data and Key Metrics Changes - Adjusted net income from continuing operations improved by 12.4% in the second quarter, with EPS increasing by 17.5% on the same basis [6] - Quarterly record revenues reached $5.7 billion, with gross profit at $936 million and adjusted diluted EPS from continuing operations at $11.52 [22] - Same store gross profit increased by 4.35% compared to the prior year, despite a slight decline in GPUs of 0.3% to 0.9% [23][24] Business Line Data and Key Metrics Changes - U.S. new car sales increased by 6% on a same store basis, with parts and service revenues growing by 11.7% to 12.8% [7][22] - Used car volumes were up nearly 4% year over year, with gross profits increasing by $29 [8][24] - Aftersales gross profit rose by 14.3%, with customer pay revenue up 13.6% and warranty revenue up 31.9% [8][25] Market Data and Key Metrics Changes - U.S. inventories were flat compared to the previous quarter and down nearly 15% from the end of 2024, with a healthy day supply of 48 days [7] - In the UK, revenues and gross profit increased by 96.9% to 109.6% year over year due to acquisition activity, with used vehicles, parts and service, and F&I growing by 16% and 12% to 28.7% respectively [28] - Same store retail used vehicle units sold in the UK increased over 8% year over year [28] Company Strategy and Development Direction - The company is focusing on improving productivity and operational efficiency, with plans to invest in technology and artificial intelligence to enhance customer experience [20] - Continued investment in aftersales business is seen as a significant opportunity, with plans to increase technician headcount and improve service capacity [9][10] - The company is balancing acquisitions and share repurchases, having acquired three dealerships in the quarter and repurchased 3% of its shares for $167.3 million [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution moving forward due to pressures on consumers from rising car prices and interest rates, while also noting the potential for new and used vehicle GPUs to elevate as inventories tighten [12][13] - The UK market is facing macroeconomic challenges, but the company is confident in its long-term growth prospects and has made significant progress in cost reductions [14][15] - Management believes that retailers who can drive scale, productivity, and lower transaction costs will be the winners in the future [19] Other Important Information - The company incurred $7.6 million in restructuring costs related to ongoing UK restructuring plans [30] - As of June 30, the company had liquidity of $1.1 billion, with $374 million in accessible cash and $739 million available to borrow [31] Q&A Session Summary Question: How did new car GPUs progress through the quarter? - Management indicated that new car GPUs were strong throughout the quarter, with no significant spikes due to inventory changes or manufacturer incentives [34][36] Question: What are the key factors affecting the UK cost target increase? - The increase in cost targets is primarily due to government-imposed costs and additional headcount reductions, with a total of approximately 800 positions cut [37][38] Question: How does the company view competition from online retailers in the used car market? - Management acknowledged the opportunity to consolidate and grow within their existing footprint, while also learning from online competitors [49][50] Question: What impact do BEV mandates in the UK have on gross margins? - Management noted that BEV sales are primarily going to corporate fleets, which yield lower margins compared to retail sales [58][60] Question: What is the outlook for lease returns and their impact on traffic? - Management indicated that predicting lease returns is challenging, but they are actively acquiring off-lease vehicles as part of their strategy [70] Question: What are the expectations for warranty work and customer pay growth? - Management expressed confidence in customer pay growth, although they do not expect to fully offset a slowdown in warranty work with customer pay alone [81]

Financial Data and Key Metrics Changes - The company reported record revenue of over $631 million for March, reflecting strong execution and digital marketing efforts despite a challenging retail environment [6][17] - Same store sales grew by 11%, driven by aggressive pricing and promotional initiatives, although overall unit volume declined year over year [8][17] - GAAP net income for the quarter was $3.3 million, or $0.14 per diluted share, an improvement from the previous year [19] - Adjusted EBITDA for the second quarter was $30.9 million, up 5% compared to last year [20] Business Line Data and Key Metrics Changes - The company experienced historically low margins on new and used boats due to aggressive pricing strategies, which skewed revenue towards lower-margin boat sales [9][18] - Diversification into higher-margin businesses, such as marinas and superyacht services, has helped mitigate cyclical volatility [9][12] Market Data and Key Metrics Changes - The company noted that most areas of the country showed improvement, with premium categories performing better than value-oriented segments [17][18] - Customer deposits decreased year over year but increased sequentially from December, indicating some recovery in demand [21] Company Strategy and Development Direction - The company is focused on a customer-centric approach and leveraging technology to enhance engagement and personalize the buying experience [6][7] - Strategic initiatives include selectively closing, consolidating, or expanding locations to align retail footprint with growth opportunities [10] - The company is committed to building relationships in iconic destinations and driving innovation in the superyacht marina industry [12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the near-term growth outlook due to uncertainties related to tariffs and economic conditions [25] - The company remains confident in its long-term strategy and believes its premium segment positioning provides resilience [25][74] Other Important Information - The company has been recognized as a great place to work for two consecutive years, highlighting its strong team culture [13] - The company has bought back over 1.2 million shares under its share repurchase plan, indicating a commitment to prudent balance sheet management [21] Q&A Session Summary Question: Can you provide details on the disaggregation of the 11% same store sales growth? - Management noted that while same store sales grew by 11%, unit sales were down in the mid-single digits, indicating that the growth was driven by a shift towards higher average price point products [29][30] Question: What is the impact of tariffs on guidance? - Management clarified that the guidance reduction is primarily due to macro consumer concerns related to tariffs, with no specific tariff costs built into the guidance [39][40] Question: How is the promotional environment affecting inventory? - Management indicated that the industry is making progress in clearing aged inventory, but uncertainties in the market are leading to continued promotional activity [48][49] Question: How is demand in the superyacht division? - Management reported that the superyacht division remains solid, with strong bookings for the summer season in the Mediterranean [82][84] Question: What is the outlook for capital allocation in the current environment? - Management stated that while there are always acquisition opportunities, they are being more prudent in evaluating them given the current market conditions [86]