Group 1 Automotive — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the quarter were $5.4 billion, a 6.7% decrease compared to $5.8 billion in the prior-year quarter.
• Net income from continuing operations was $102.9 million, compared to $13.1 million in the prior-year quarter.
• Adjusted net income from continuing operations was $112.1 million, compared to $135.1 million in the prior-year quarter.
• Diluted earnings per share from continuing operations were $8.59, compared to $1.02 in the prior-year quarter.
• Adjusted diluted earnings per share from continuing operations were $9.36, compared to $10.45 in the prior-year quarter.
• Total gross profit was $854.8 million, a 7.1% decrease year-over-year.
• Total gross margin was 15.8%, a 0.1 percentage point decrease year-over-year.
• Selling, general and administrative (SG&A) expenses were $618.2 million, a 5.6% decrease year-over-year.
• SG&A expenses as a percentage of gross profit were 72.3%, an increase of 112 basis points year-over-year.
• Adjusted SG&A expenses were $610.5 million, a 5.4% decrease year-over-year.
• Adjusted SG&A expenses as a percentage of gross profit were 71.4%, an increase of 129 basis points year-over-year.
• Floorplan interest expense was $21.0 million, a 11.2% decrease year-over-year.
• Net floorplan expense was $(2.0) million, compared to $0.2 million in the prior-year quarter.
• Cash and cash equivalents were $881.5 million as of September 30, 2026, compared to $32.5 million as of December 31, 2025.
• Total debt was $3,886.2 million as of September 30, 2026, compared to $3,699.5 million as of December 31, 2025.
• Total equity was $3,065.4 million as of September 30, 2026, compared to $2,789.1 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company is focused on reducing leverage, with proceeds from dispositions expected to support this commitment.
• The Company expects to complete dispositions under definitive agreement for approximately $125 million in proceeds.
• The Company anticipates opening a third planned Geely location in the U.K. by December 2026.
• The Company expects to open a Chery Omoda & Jaecoo location in the U.K. by December 2026.
• Future share repurchases may be made based on market conditions, legal requirements, and other corporate considerations.

Business Segments and Product Lines:

• U.S. Operations:
  • U.S. parts and service customer pay revenues were $305.5 million, a 0.6% increase year-over-year.
  • On a same-store basis, U.S. parts and service customer pay revenues were $297.4 million, a 3.2% increase year-over-year.
  • U.S. SG&A expenses were $452.1 million, a 6.0% decrease year-over-year.
  • U.S. used vehicle gross profit per retail unit (PRU) was $1,527, a 0.2% decrease year-over-year.
  • On a same-store basis, U.S. used vehicle PRU was $1,544, a 1.6% increase year-over-year.
  • U.S. new vehicle retail sales were $2,050.5 million, a 6.2% decrease year-over-year.
  • U.S. used vehicle retail sales were $1,146.8 million, a 6.8% decrease year-over-year.
  • U.S. total revenues were $3,991.1 million, a 6.7% decrease year-over-year.
• U.K. Operations:
  • U.K. new vehicle retail units sold were 15,984, a 1.9% increase year-over-year.
  • On a same-store basis, U.K. new vehicle retail units sold were 15,467, an 8.1% increase year-over-year.
  • U.K. used vehicle retail gross profit per retail unit was $1,437, a 15.7% increase year-over-year.
  • On a same-store basis, U.K. used vehicle retail gross profit per retail unit was $1,428, a 13.9% increase year-over-year.
  • U.K. parts and service revenues were $162.3 million, a 2.4% decrease year-over-year.
  • On a same-store basis, U.K. parts and service revenues were $159.7 million, a 6.4% increase year-over-year.
  • U.K. total revenues were $1,405.6 million, a 6.6% decrease year-over-year.
• New Product/Brand Expansions:
  • Completed the acquisition of 10 high-volume and high-margin dealerships from Hennessy Automobile Companies, expanding presence in the Atlanta market to 15 dealerships.
  • Expanded U.K. network with Geely, opening two of three planned locations.
  • Agreed to open a Chery Omoda & Jaecoo location in the U.K.
• Unit Sales:
  • Consolidated new vehicle units sold were 55,259, a 3.5% decrease year-over-year.
  • Consolidated used vehicle retail units sold were 53,343, a 10.5% decrease year-over-year.
  • Consolidated parts and service gross profit was $392.0 million, a 3.8% decrease year-over-year.
  • Consolidated parts and service gross margin was 55.9%, a 0.4 percentage point increase year-over-year.
  • Finance and insurance (F&I) revenues were $215.8 million, a 10.4% decrease year-over-year.
  • F&I gross profit per retail unit was $1,987, a 3.6% decrease year-over-year.

Market and Competitive Landscape:

• The Company noted challenging market conditions but reported improved year-over-year growth rates across key same-store operating metrics compared to the second quarter.
• The Company faces competition from emerging automotive manufacturers, including Chinese brands.
• The Company operates in the U.S. and U.K. markets, with 256 dealerships, 319 franchises, and 33 collision centers.
• The Company manages inventory levels, with consolidated new vehicle days' supply at 39 days and used vehicle days' supply at 38 days as of September 30, 2026.

Risks and Challenges:

• Risks include general economic and business conditions, inflation, interest rates, foreign exchange rates, vehicle affordability, consumer demand, and recession risks in the U.S. and U.K.
• Trade policy developments, including tariffs on imported automobiles and parts, supply chain disruptions, and vehicle cost increases.
• Changes to federal tax laws, including deductions and clean energy tax credits.
• Manufacturer incentives, dealer financial assistance, and the ability to obtain inventory of desirable new and used vehicles.
• Compliance with laws and regulations, including battery electric vehicle mandates and emissions standards.
• Leverage reduction, increased interest expense, and compliance with debt covenants.
• Potential impairment of goodwill and intangible franchise rights.
• Actions of significant stockholders and change-of-control provisions in manufacturer agreements.
• Armed conflicts in Ukraine and the Middle East affecting energy markets and shipping routes.
• Cyberattacks or data security incidents.

Management Commentary and Tone:

• Daryl Kenningham, President and CEO, expressed pleasure in closing the Hennessy acquisition and gratitude to the Hennessy family.
• Management stated the acquisition aligns with the strategy to focus on high-revenue, premium brand stores in growing markets.
• Management noted deliberate reshaping of the portfolio into larger, more profitable stores and progress in selling stores that do not fit the strategy.
• Management highlighted that operating execution was evident in the third quarter, with improved year-over-year growth rates across key same-store metrics compared to the second quarter.
• Management noted the U.S. grew same-store customer pay revenue and repair orders 3% and 4% year-over-year, respectively, benefiting from cost-cutting actions.

Other Key Points:

• Completed the disposition of U.S. dealerships with approximately $235 million in proceeds since quarter end.
• Executed agreements to dispose of four U.S. dealerships for expected proceeds of approximately $125 million.
• Year-to-date, the Company acquired 14 dealership operations in the U.S. with total expected annual revenues of approximately $2 billion.
• Year-to-date, the Company disposed of U.S. dealerships with approximately $505 million in annualized revenues.
• In the U.K., the Company disposed of a Volkswagen and an Audi dealership, bringing year-to-date U.K. disposition annualized revenues to approximately $495 million.
• Reached an agreement with Jaguar Land Rover (JLR) in the U.K. to revoke a previous election to terminate 10 franchise agreements, retaining five remaining JLR dealerships.
• Year-to-date, the Company acquired and integrated three dealership operations in the U.K. with total expected annual revenues of approximately $135 million.
• During the current year, the Company repurchased 205,190 shares of common stock for a total cost of $72.4 million, excluding excise taxes.
• As of September 30, 2026, the Company had $306.3 million remaining under its Board authorized share repurchase program.
• No shares were repurchased during the current quarter.