Core Insights - Carvana reported record Q4 and full-year results, with stock increasing by 3% following the announcement [1] - The company sold 163,522 vehicles in Q4 and nearly 600,000 vehicles in 2025, marking a 43% year-over-year growth [1][2] Q4 Results - Q4 sales reached $5.6 billion, a 58% increase from $3.54 billion in the same quarter last year, exceeding estimates by 7% [3] - Q4 EPS was $4.22, surpassing expectations of $1.13 by 273% and up from $0.56 per share a year ago [4] - Cash from operating activities increased by 617% year-over-year to $430 million, indicating strong cash generation [5] Full Year Results & Strategic Goals - Total sales for fiscal 2025 rose 49% to $20.3 billion from $13.67 billion in 2024, with net income increasing to $1.9 billion [9] - Full-year EPS surged 405% to a record $8.04, compared to $1.59 per share in 2024 [9] - Carvana aims for significant growth in retail units sold and adjusted EBITDA in 2026, with projected sequential increases in Q1 [10] Valuation Monitoring - Carvana stock is trading at a forward earnings multiple of 43X, closer to the S&P 500 benchmark and the Zacks Internet-Commerce Industry average [11] - The price to forward-sales ratio is under 3X, which is a discount compared to the S&P 500's 5X [11] Bottom Line - Carvana currently holds a Zacks Rank 3 (Hold), with potential for a buy rating as EPS revisions are expected to trend higher for FY26 [13] - The stock's pullback from its all-time high of $486 per share is seen as more attractive as bubble fears diminish [13]

Financial Data and Key Metrics Changes - Reported GAAP EPS for Q4 2025 was $1.36 per share, with adjusted EPS at $1.52 per share, reflecting a 1% increase year-over-year [4] - Consolidated total revenues for Q4 were $3.9 billion, down 1% year-over-year, while full-year revenues reached an all-time record of $15.2 billion, up 7% year-over-year [4][5] - Consolidated total gross profit for the full year was $2.4 billion, up 9% year-over-year, with adjusted EBITDA growing 10% to $615 million [5] Business Line Data and Key Metrics Changes - Franchise dealership segment revenues for Q4 were $3.4 billion, flat year-over-year, with a 5% decrease in same-store sales driven by an 11% decrease in new vehicle retail volume [5][6] - EchoPark revenues for Q4 were $481 million, down 5% year-over-year, but adjusted EBITDA reached a record $49.2 million for the full year, up 78% year-over-year [8][9] - Powersports segment revenues for Q4 were $36 million, up 19% year-over-year, with gross profit increasing by 25% [10] Market Data and Key Metrics Changes - Same-store new vehicle gross profit per unit (GPU) was $3,033, down 7% year-over-year, while used vehicle GPU decreased 2% year-over-year to $1,379 [7] - EchoPark's total GPU for Q4 was a record $3,420 per unit, up 15% year-over-year [8] Company Strategy and Development Direction - The company aims to expand EchoPark to cover 90% of U.S. car buyers, targeting over 1 million vehicles sold annually, while focusing on brand marketing to drive growth [9][10] - Strategic adjustments to the EchoPark business model are expected to facilitate disciplined store openings beginning in late 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about potential tariff impacts on vehicle production and pricing, indicating that new car prices are expected to rise, which could affect consumer affordability [12][40] - The company remains optimistic about the growth potential in fixed operations, projecting significant growth opportunities in the service sector [56] Other Important Information - The company ended the quarter with $702 million in available liquidity and repurchased approximately 600,000 shares for about $38 million during Q4 [11] - A quarterly cash dividend of $0.38 per share was approved, payable on April 15, 2026 [11] Q&A Session Summary Question: Can you discuss EchoPark's position in the used car ecosystem? - Management views EchoPark as a low-cost provider in the pre-owned vehicle market, aiming to sell vehicles at prices $3,000-$6,000 lower than competitors like Carvana and CarMax [19][21] Question: What is the plan for advertising spend? - The planned $10 million-$20 million advertising spend will focus on brand building and will begin in the second quarter, with a broader rollout expected in 2027 [32][34] Question: How is the company addressing fixed operations growth? - The company has increased technician numbers significantly and sees potential for $100 million a month in fixed operations growth, aiming to attract more customers back to dealership service [55][92] Question: What are the expectations for GPU in 2026? - Management anticipates new car GPU to be in the range of $2,700-$3,000, with potential increases during tax return season [39] Question: How is the company planning to handle inventory sourcing? - The company is leveraging its new car franchise dealerships for inventory and is incentivizing teams to buy vehicles from various sources, reducing reliance on auctions [25][26] Question: What is the outlook for the luxury vehicle market? - Management noted that while luxury vehicle prices are high, they are monitoring consumer behavior closely, especially as new car prices continue to rise [40][74]

Financial Data and Key Metrics Changes - Reported GAAP EPS for Q4 2025 was $1.36 per share, with adjusted EPS at $1.52 per share, reflecting a 1% increase year-over-year [4] - Consolidated total revenues for Q4 were $3.9 billion, down 1% year-over-year, while full-year revenues reached an all-time record of $15.2 billion, up 7% year-over-year [4][5] - Consolidated total gross profit for the full year was $2.4 billion, up 9% year-over-year, and consolidated Adjusted EBITDA grew 10% to $615 million [5] Business Line Data and Key Metrics Changes - Franchise dealership segment revenues for Q4 were $3.4 billion, flat year-over-year, with a 5% decrease in same-store new vehicle retail volume, partially offset by a 5% increase in same-store used vehicle retail volume [5][6] - EchoPark revenues for Q4 were $481 million, down 5% year-over-year, but gross profit reached a record $54 million, up 9% year-over-year [8] - Powersports segment revenues for Q4 were $36 million, up 19% year-over-year, with gross profit also reaching a record of $9 million, up 25% year-over-year [10] Market Data and Key Metrics Changes - Same-store new vehicle gross profit per unit (GPU) was $3,033, down 7% year-over-year, while new vehicle GPU on a reported basis was $3,209, down 1% year-over-year [7] - EchoPark segment total GPU was a record $3,420 per unit, up 15% year-over-year [8] - The average retail selling price of new vehicles reached over $62,000 in Q4, indicating a trend of increasing vehicle prices [39] Company Strategy and Development Direction - The company aims to expand the EchoPark platform to reach 90% of U.S. car buyers, targeting over 1 million vehicles sold annually [9] - Investment in brand marketing is expected to be key for long-term growth, with plans to increase advertising expenses by $10-$20 million in 2026 [10] - The company is focused on leveraging its new car franchise dealerships for inventory sourcing to reduce dependence on auction lanes [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about potential pricing pressures due to tariffs and the impact on consumer affordability as new car prices continue to rise [40][41] - The company remains optimistic about the growth potential in the EchoPark segment, especially as inventory conditions improve [107] - Management highlighted the importance of maintaining strong relationships with manufacturer partners to navigate challenges in vehicle production and pricing [12] Other Important Information - The company ended the quarter with $702 million in available liquidity and repurchased approximately 600,000 shares for about $38 million in Q4 [11] - A quarterly cash dividend of $0.38 per share was approved, payable on April 15, 2026 [11] Q&A Session Summary Question: Can you discuss EchoPark's position in the used car ecosystem? - Management views EchoPark as a low-cost provider in the pre-owned vehicle market, aiming to sell over 1 million vehicles annually and expand coverage [20][21] Question: What is the plan for advertising spend? - The $10 million-$20 million advertising budget will focus on brand building and will begin in the second quarter, with a broader rollout expected in 2027 [32][34] Question: How is the company addressing fixed operations growth? - The company has increased technician numbers significantly and sees potential for $100 million a month in fixed operations growth, targeting mid-single-digit growth in this segment [55][92] Question: What are the expectations for new car pricing and consumer behavior? - Management anticipates that new car prices will continue to rise, which may affect consumer affordability, but believes this will benefit the used car market [40][41] Question: How is the company planning to leverage technology in service operations? - The company is investing in a digital retail solution and plans to launch an EchoPark app to enhance customer experience and streamline the buying process [98][99]

Sonic Automotive (NYSE:SAH) Q4 2025 Earnings call February 18, 2026 11:00 AM ET Speaker11Good morning, and welcome to the Sonic Automotive fourth quarter 2025 earnings conference call. This conference call is being recorded today, Wednesday, February 18, 2026. Presentation materials which accompany management's discussion on the conference call can be accessed at the company's website at ir.sonicautomotive.com. At this time, I would like to refer to the Safe Harbor statement under the Private Securities Lit ...

Core Insights - Penske Automotive Group (PAG) reported fourth-quarter 2025 adjusted earnings of $2.91 per share, a decrease of 17.8% year over year, missing the Zacks Consensus Estimate of $3.19. However, net sales reached $7.77 billion, surpassing the Zacks Consensus Estimate of $7.64 billion, and increased by 0.6% compared to the previous year [1][10]. Financial Performance - Gross profit for the quarter fell by 5.3% year over year to $1.24 billion, while operating income decreased by 20.8% to $275 million. Foreign currency exchange positively impacted revenues by $113.3 million, net income by $700,000, and earnings per share by 1 cent [2]. - Same-store retail units declined by 6.2% year over year to 115,898. In the Retail Automotive segment, same-store new-vehicle revenues decreased by 9.6% to $3.18 billion, while same-store used vehicle revenues increased by 2.8% to $2.10 billion [3]. Segmental Performance - Revenues in the Retail Automotive segment totaled $6.74 billion, a decline of 4.8% from the previous year, but exceeded the estimate of $6.73 billion. Total new and used vehicle deliveries fell by 9.5% year over year to 105,478 units, with gross profit at $1.07 billion, down 5.7% year over year, missing the estimate of $1.11 billion [4]. - Retail Commercial Truck segment revenues decreased by 6.2% to $725.4 million, beating the estimate of $652.4 million. Gross profit in this segment was $121.4 million, down from $138.1 million in the previous year, but exceeded the estimate of $106.1 million [5]. - The Commercial Vehicle Distribution and Other segment saw revenues increase by 35.3% to $303.3 million, surpassing the estimate of $257.4 million. Gross profit rose to $57.4 million from $45.8 million in the previous year, beating the estimate of $44.7 million [6]. Financial Tidbits - SG&A costs remained flat year over year at $924 million. As of December 31, 2025, Penske had cash and cash equivalents of $64.7 million, down from $83.6 million a year earlier. Long-term debt increased to $1.81 billion from $1.13 billion [7]. - In 2025, PAG repurchased 1,178,411 shares of common stock, with $247.5 million of stock repurchase authorization remaining outstanding. The company ended 2025 with approximately $1.6 billion in liquidity and raised its quarterly dividend by 2 cents to $1.40 per share, marking its 21st consecutive quarterly increase [8].

Core Insights - The performance of the company was negatively affected by a 20-22% decline in sales of German luxury brands in the U.S. and U.K. due to tariff-related pull-forward and the expiration of BEV credits [1] Financial Performance - The company completed strategic divestitures amounting to $700 million in revenue, reallocating $200 million of the proceeds into higher returning assets, including the acquisition of premium Toyota and Lexus dealerships, which represent over $1.6 billion in annualized revenue [1] Operational Challenges - Operational disruptions included a six-week production halt at Land Rover and a cyber incident that resulted in a reduction of Q4 sales by 800 units [1] - The Commercial Truck segment experienced a prolonged freight recession, impacting new unit sales and reducing equity income from Penske Transportation Solutions (PTS) [1] Market Dynamics - Management indicated that used vehicle constraints are linked to a bottoming of lease returns expected in 2025, which limits the availability of high-quality, young inventory [1] - International diversification acted as a hedge, with Australia's EBT nearly doubling due to strong performance in off-highway Energy Solutions and mining sectors [1]

Core Insights - Lithia Motors (LAD) reported fourth-quarter 2025 adjusted earnings per share of $6.74, a decrease from $7.79 in the prior-year quarter, missing the Zacks Consensus Estimate of $8.09. Revenues were flat year over year at $9.2 billion, also missing the estimate of $9.53 billion [1][10]. Segmental Performance - New vehicle revenues declined by 5.7% year over year to $4.63 billion, missing the estimate of $4.71 billion, with new vehicle units sold down 8.1% to 97,424 units, although this was above the estimate of 95,435 units [2]. - The average selling price (ASP) of new vehicles increased to $48,239 from $47,478 in the prior-year quarter but fell short of the estimate of $49,401. The gross margin in this segment contracted by 70 basis points to 5.9%, while the cost of sales decreased by 5% year over year to $4.36 billion [3]. - Used vehicle revenues rose by 6.7% year over year to $3.2 billion, surpassing the estimate of $2.68 billion, driven by higher unit sales and ASP. Used vehicle retail units sold increased by 4.8% to 99,905 units, exceeding the expectation of 94,261 units. The ASP for used vehicles was $28,533, up 3.1% year over year, also beating the estimate of $28,413. The gross margin in this segment decreased by 60 basis points to 4.7% [4]. - Finance and insurance revenues increased by 0.3% to $356.9 million, beating the estimate of $347 million. Aftersales revenues totaled $1.04 billion, up 11.4% year over year, surpassing the estimate of $972.1 million. Same-store new vehicle revenues fell by 6.6%, while same-store used vehicle sales rose by 6.1% [5]. Financial Overview - Cost of sales increased by 0.3% year over year. SG&A expenses amounted to $979.3 million, up 8.6% year over year. Adjusted SG&A as a percentage of gross profit rose to 71.4% from 66.3% in the prior-year quarter. Both pretax and net profit margins declined from the previous year [6]. - The company announced a dividend of 55 cents to be paid on March 20, 2026, to shareholders of record as of March 6, 2026. In the fourth quarter of 2025, Lithia repurchased nearly 917,427 shares at an average price of $314, with approximately $621.6 million remaining under its buyback authorization [7]. - As of December 31, 2025, Lithia had cash and cash equivalents of $341.8 million, down from $402.2 million a year earlier. Long-term debt increased to $7.27 billion from $6.12 billion [8]. Market Position - Lithia currently holds a Zacks Rank 3 (Hold). Other better-ranked stocks in the auto sector include Ford Motor (F), Modine Manufacturing (MOD), and PHINIA Inc. (PHIN), each with a Zacks Rank 1 (Strong Buy) [9].

Financial Data and Key Metrics Changes - Quarterly revenue reached $9.2 billion, setting a new record for full-year revenue of $37.6 billion, up 4% from 2024 [4] - Adjusted diluted EPS was $6.74 for the quarter, with full-year adjusted EPS of $33.46, up 16% from 2024 [4] - Adjusted EBITDA was $364.1 million in Q4, an 8.9% decrease year-over-year, primarily driven by lower net income [19] Business Line Data and Key Metrics Changes - New vehicle revenue declined 6.6% on an 8.3% unit decline, with new vehicle GPU at $27.66, down $300 year-over-year [6] - Used retail performance showed 6.1% revenue growth, driven by 4.7% unit growth, with used GPU at $1,575, down $151 year-over-year [6] - After-sales revenue grew by 10.9%, with gross profit up 9.8% and a gross margin of 57.3% [8] Market Data and Key Metrics Changes - In the UK, same-store gross profit increased by 10% despite challenging market conditions, with adjusted pre-tax income for the UK up 53% for the full year compared to 2024 [9] - North American penetration for Driveway Finance Corporation reached 15% for the quarter, up 650 basis points [18] Company Strategy and Development Direction - The company is focused on maximizing shareholder return through disciplined capital deployment, including share repurchases and strategic acquisitions [11] - Technology investments, including partnerships with Pinewood AI, aim to enhance operational efficiency and customer experience [10] - The company targets $2-$4 billion of acquired revenue annually, balancing share valuation and acquisition prices to accelerate shareholder return [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, with year-over-year earnings pressure driven by margin compression and SG&A de-leverage [15] - The company is well-positioned to deliver compounding earnings growth in 2026 as industry conditions normalize [12] - Management expressed confidence in the resilience of their diversified model and the ability to adapt to changing market conditions [21] Other Important Information - The company repurchased 3.8% of its shares in the quarter and 11.4% of its shares in 2025 at an average price of $314 [20] - Inventory levels remain consistent, with new vehicle day supply at 54 days and used inventory at 40 days [7] Q&A Session Summary Question: Retention levels on the after-sales business - Management indicated retention is slightly up year-over-year, with service contract penetration at 37% [22] Question: Future cash generation and shareholder returns - Management emphasized the focus on share repurchases due to the current stock price being undervalued [24] Question: SG&A as a percentage of gross profit - Management noted that SG&A increased due to weaker sales performance and marketing expenses not materializing as expected [27][28] Question: Demand trends in Q1 - Management reported that trends in Q1 are similar to the last two months of Q4, with some weather impacts noted [31] Question: Used vehicle GPU pressures - Management acknowledged ongoing GPU pressures but highlighted efforts to improve pricing strategies [38][39] Question: After-sales growth drivers - Management attributed after-sales growth to improved customer relationships and the My Driveway portal facilitating better service [43] Question: Luxury vehicle market performance - Management noted a decline in luxury vehicle sales, particularly among brands like BMW and Porsche, but service and parts business remains strong [60]

U.S. Stock Market - U.S. stocks traded higher, with the S&P 500 gaining around 1.6% on Friday [1] - The Dow increased by 2.01% to 49,891.59, while the NASDAQ climbed 1.84% to 22,954.50 [1] - Information technology shares rose by 2.5%, whereas communication services stocks fell by 2% [1] AutoNation, Inc. Performance - AutoNation, Inc. shares jumped more than 7% after reporting fourth-quarter results [2] - The company posted adjusted earnings per share of $5.08, a 2% increase year over year, surpassing the analyst consensus estimate of $4.85 [2] - Sales of $6.929 billion fell short of the consensus estimate of $7.200 billion [2] Commodity Market - Oil prices increased by 0.5% to $63.60, while gold rose by 1.6% to $4,969.00 [3] - Silver prices decreased by 0.8% to $76.140, and copper prices rose by 0.7% to $5.8590 [3] European Market - European shares were higher, with the eurozone's STOXX 600 gaining 0.65% [4] - Spain's IBEX 35 Index rose by 1.02%, London's FTSE 100 increased by 0.42%, Germany's DAX gained 0.56%, and France's CAC 40 rose by 0.31% [4] Asian Market - Asian markets closed mostly lower, with Japan's Nikkei falling by 0.88% and China's Shanghai Composite declining by 0.64% [5] - Hong Kong's Hang Seng Index gained 0.14%, while India's BSE Sensex fell by 0.60% [5] Economic Indicators - The U.S. Manheim Used Vehicle Value Index rose by 2.4% month-over-month in January [6] - The University of Michigan's consumer sentiment index increased by 0.9 points to a reading of 57.3 in February, exceeding market estimates of 55 [6]

Core Insights - Asbury Automotive (ABG) reported Q4 2025 adjusted earnings per share of $6.67, missing the Zacks Consensus Estimate of $6.70 and down from $7.26 in the previous year, primarily due to lower gross profits from new vehicle sales and retail wholesale [1][10] - Total revenues reached $4.7 billion, a nearly 4% year-over-year increase, but fell short of the Zacks Consensus Estimate of $4.82 billion [1] Segment Details - New vehicle revenues increased by 3% year over year to $2.53 billion, missing the Zacks Consensus Estimate of $2.59 billion; retail units sold totaled 47,201, exceeding the consensus of 47,182 units; however, gross profit declined by 8% to $157.9 million, missing the estimate of $160 million [2] - Used vehicle retail revenues rose by 1% to $1.11 billion but missed the Zacks Consensus Estimate of $1.18 billion due to a decrease in units sold, totaling 33,782, which was down 4% year over year and below the consensus of 37,128 [3] - Retail used vehicle average selling price (ASP) increased by 6% to $32,993, surpassing the estimate of $31,558; gross profit from this segment was $59.4 million, up 16% year over year but below the estimate of $61 million [4] - Revenues from the used vehicle wholesale business grew by 11% to $177 million, beating the consensus of $173 million; however, gross profit fell by 50% to $0.9 million, missing the estimate of $3.42 million [4] - Finance and insurance business net revenues amounted to $201.4 million, up 1% year over year and exceeding the estimate of $186 million; gross profit was $189 million, up 2% year over year and beating the estimate of $177 million [5] - Parts and service business revenues reached $658.3 million, up from $590.4 million year over year but missing the estimate of $667 million; gross profit rose by 13% to $385.9 million, falling short of the consensus of $391 million [6] Other Financial Insights - Selling, general & administrative expenses as a percentage of gross profit increased to 66.7%, up 307 basis points year over year [7] - As of December 31, 2025, the company had cash and cash equivalents of $40.4 million, down from $69.4 million a year earlier; long-term debt rose to $3.57 billion from $3.14 billion [7] - The company repurchased approximately 212,000 shares for $50 million in Q4 2025, totaling about 433,000 shares for $100 million for the full year; $176 million remains available under its share buyback authorization [8]