Group 1 Automotive, Inc.
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Item 1. Business
General
Group 1 Automotive, Inc. is a leading operator in the automotive retail industry. We sell and/or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale. We have operations in geographically diverse markets that extend across 17 states in the U.S. and 62 towns and cities in the U.K. As of December 31, 2025, our retail network consists of 145 dealerships and 21 collision centers in the U.S. and 109 dealerships and 11 collision centers in the U.K.
Dealership Operations
Our new vehicle revenues include new vehicle sales and lease transactions, completed at our dealerships or via our digital platform. We sell retail used vehicles directly to our customers at our dealerships and via our digital platform and wholesale our used vehicles at third-party auctions. We sell replacement parts and provide both warranty and non-warranty maintenance and repair services at each of our franchised dealerships, as well as provide collision repair services at the 32 collision centers that we operate. We also sell parts to wholesale customers. Revenues from our F&I operations consist primarily of fees for arranging financing and selling vehicle service and insurance contracts in connection with the retail sale of a new or used vehicle. We offer a wide variety of third-party finance, vehicle service and insurance products in a convenient manner at competitive prices.
The following charts present total revenues and gross profit contribution from our operations by new vehicles, used vehicles, parts and service and F&I for the year ended December 31, 2025 (“Current Year”):
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The following chart presents our diversity of new vehicle unit sales by manufacturer for the Current Year:
The following table shows our new vehicle unit sales geographic mix for the Current Year and our franchise count as of December 31, 2025:
| New vehicle unit sales geographic mix (%) | Franchises | ||||||||||||||
Segment | Geographic Market | ||||||||||||||
| U.S. | Texas | 31.6 | % | 65 | |||||||||||
| Massachusetts | 7.0 | % | 20 | ||||||||||||
| California | 6.8 | % | 7 | ||||||||||||
| Oklahoma | 4.6 | % | 19 | ||||||||||||
| Georgia | 3.7 | % | 10 | ||||||||||||
| Maryland | 3.1 | % | 7 | ||||||||||||
| Florida | 3.1 | % | 7 | ||||||||||||
| South Carolina | 2.4 | % | 6 | ||||||||||||
| New Mexico | 2.3 | % | 7 | ||||||||||||
| New Hampshire | 2.1 | % | 5 | ||||||||||||
| New Jersey | 1.5 | % | 3 | ||||||||||||
| Maine | 1.4 | % | 6 | ||||||||||||
| Louisiana | 1.1 | % | 6 | ||||||||||||
| Kansas | 1.0 | % | 3 | ||||||||||||
| Mississippi | 0.4 | % | 1 | ||||||||||||
| New York | 0.2 | % | 1 | ||||||||||||
| Alabama | 0.2 | % | 1 | ||||||||||||
| 72.4 | % | 174 | |||||||||||||
| U.K. | United Kingdom | 27.6 | % | 141 | |||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto, as well as our 2025 Form 10-K.
Overview
We are a leading operator in the automotive retail industry. We sell or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale. We have operations in geographically diverse markets that extend across 17 states in the U.S. and 61 towns and cities in the U.K. As of June 30, 2026, our retail network consisted of 147 dealerships in the U.S. and 106 dealerships in the U.K.
Recent Events
On July 20, 2026, President Donald Trump signed a proclamation imposing an additional 50% ad valorem duty on certain products imported from Canada. The additional duty is scheduled to take effect on August 19, 2026, and would apply on top of any existing duties. Preferential tariff treatment under the United States-Mexico-Canada Agreement does not exempt covered goods. At this time, we cannot predict whether the additional duty will be implemented as scheduled, modified or challenged, or the extent or duration of any resulting impact on our business.
During the second quarter of 2026, disruptions in the global supply of Group III base oils, a key component of synthetic motor oil, resulted in supply constraints and increased costs for certain synthetic oils and lubricants across the sector. These disruptions have been attributed to refinery outages and shipping disruptions associated with ongoing geopolitical conflict in the Middle East. Continued supply constraints could increase the cost of lubricants used in our service operations, limit the availability of certain oil grades and affect our ability to perform routine service for customers. At this time, we cannot predict the extent or duration of any such impacts.
In April 2026, we undertook cost-cutting measures within our U.S. business, reducing our staffing by nearly 700 full-time employees and reducing SG&A costs through contract and vendor elimination. We expect that these efforts will remove at least $50 million in annual costs from our U.S. operations.
On April 13, 2026, the U.K. Department for Transport announced a proposal to update minimum vehicle emissions standards to align with the Euro 7 standard implemented in the European Union. If adopted, the Euro 7 standard would set stricter standards for exhaust and non-exhaust vehicle emissions, including greenhouse gas (“GHG”) emissions. Euro 7 would also set battery durability requirements for EVs. If finalized, stricter emissions standards could result in increased costs and affect our U.K. results of operations. The consultation period closed on May 25, 2026, however the proposal has not yet been finalized. Further, on July 6, 2026, the U.K. Department for Transport opened a consultation on its proposal to prohibit the maintenance or modification of vehicles subsequent to their manufacture that would prevent them from meeting the emissions standards in place when the vehicles were originally produced. The Department for Transport has estimated that the legislation will be passed in 2027.
On February 28, 2026, the U.S. and the State of Israel commenced coordinated military operations against the Islamic Republic of Iran (“Iran”). The resulting conflict has increased volatility in global supply chains and energy markets, as well as geopolitical instability. Disruptions affected energy supplies and critical maritime transit routes, particularly the Strait of Hormuz, driving additional increases in fuel prices and reductions in supplies, which adversely affected consumer demand for vehicles and broader economic conditions. On June 17, 2026, the U.S. and Iran signed a memorandum of understanding intended to end the conflict and reopen the Strait of Hormuz. However, the ceasefire has been repeatedly disrupted by renewed military operations and continued attacks in the region. As a result, uncertainty regarding energy markets, commercial shipping and broader geopolitical conditions continues, and we cannot predict the extent nor duration of any resulting impacts on our business, financial condition or results of operations.
On February 20, 2026, the U.S. Supreme Court held that President Donald Trump lacked authority under the International Emergency Economic Powers Act (“IEEPA”) to impose certain reciprocal and other emergency-based tariffs. The decision invalidated those IEEPA-based tariff actions and halted their collection. On the same date, President Donald Trump issued an executive order, which formally terminated those IEEPA‑based tariff actions and directed that their collection cease. Tariffs imposed under other statutory authorities, including Section 232 (such as the automotive and medium/heavy-duty vehicle proclamations), were not affected by the ruling or executive order and remain in force.
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The Supreme Court’s decision and related executive action have created uncertainty regarding the future tariff environment, including the potential for litigation, refund claims by parties directly subject to the invalidated tariffs and the use of alternative statutory authorities by the administration to impose new or modified tariffs. We cannot predict the timing, scope, nor outcome of future tariff‑related actions or their potential effect, if any, on our results of operations. We will continue to monitor the impact of the Trump Administration’s policies and the response of U.S. trading partners on our results of operations in future periods.
On February 18, 2026, the U.S. Environmental Protection Agency (“EPA”) issued a final rule rescinding the GHG “Endangerment Finding,” which provides the authority underpinning the majority of the EPA’s GHG-related regulations, including those for emissions from new motor vehicles and engines, and the National Highway Traffic Safety Administration’s Corporate Average Fuel Economy standards. The final rule also repealed all of the EPA’s GHG emission standards for light-duty, medium-duty and heavy-duty motor vehicles and engines. Litigation challenging the EPA’s final rule is ongoing, and we cannot predict the final outcome. Certain states, such as California, have previously adopted or have announced an intent to adopt standards regulating GHG and other vehicle emissions and setting EV targets. However, on June 12, 2026, the EPA announced its transmission to Congress of four of California’s Clean Air Act preemption waivers, which allow the state to implement more stringent emission control requirements, seeking congressional resolutions disapproving of the waivers under the Congressional Review Act. California has challenged the EPA’s action in the U.S. District Court for the District of Columbia, the outcome of which is uncertain. As a result, there is significant uncertainty with respect to U.S. regulations related to GHG emissions.
Critical Accounting Policies and Accounting Estimates
For discussion of our critical accounting policies and accounting estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2025 Form 10-K. There have been no material changes to our critical accounting policies or accounting estimates since December 31, 2025.
Results of Operations
The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to accurately manage and monitor the underlying performance of the business and is also useful to investors.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. Our primary foreign currency exposure is to GBP. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than USD using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. Additionally, we caution investors not to place undue reliance on non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures. Our management also uses constant currency and adjusted cash flows from operating, investing and financing activities in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors and industry analysts concerning financial performance. We disclose these non-GAAP measures and the related reconciliations because we believe investors use these metrics in evaluating longer-term period-over-period performance. These metrics also allow investors to better understand and evaluate the information used by management to assess operating performance.
Retail new and used vehicle units sold include new and used vehicle agency units sold under agency arrangements with certain manufacturers in the U.K. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues as only the sales commission is reported in revenues for dealerships operating under an agency arrangement. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
Certain amounts in the financial statements may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented.
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The following tables summarize our operating results on a reported basis and on a same store basis:
Reported Operating Data — Consolidated
(In millions, except unit data)
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Increase/ (Decrease) | % Change | Currency Impact on Current Period Results | Constant Currency % Change | |||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | $ | 2,606.1 | $ | 2,735.5 | $ | (129.3) | (4.7) | % | $ | 2.0 | (4.8) | % | ||||||||||||||||||||||||||||||
| Used vehicle retail sales | 1,718.3 | 1,848.2 | (129.9) | (7.0) | % | 3.1 | (7.2) | % | ||||||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | 151.5 | 163.8 | (12.3) | (7.5) | % | 0.3 | (7.7) | % | ||||||||||||||||||||||||||||||||||
| Total used | 1,869.8 | 2,012.0 | (142.2) | (7.1) | % | 3.4 | (7.2) | % | ||||||||||||||||||||||||||||||||||
| Parts and service sales | 692.4 | 718.4 | (26.0) | (3.6) | % | 0.7 | (3.7) | % | ||||||||||||||||||||||||||||||||||
| F&I, net | 216.8 | 237.8 | (21.0) | (8.8) | % | 0.2 | (8.9) | % | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | 5,385.1 | $ | 5,703.5 | $ | (318.5) | (5.6) | % | $ | 6.2 | (5.7) | % | ||||||||||||||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | $ | 173.6 | $ | 198.4 | $ | (24.8) | (12.5) | % | $ | — | (12.5) | % | ||||||||||||||||||||||||||||||
| Used vehicle retail sales | 81.9 | 96.4 | (14.5) | (15.0) | % | 0.1 | (15.2) | % | ||||||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | (0.7) | 0.5 | (1.2) | NM | — | NM | ||||||||||||||||||||||||||||||||||||
| Total used | 81.2 | 96.9 | (15.7) | (16.2) | % | 0.1 | (16.4) | % | ||||||||||||||||||||||||||||||||||
| Parts and service sales | 389.0 | 402.8 | (13.8) | (3.4) | % | 0.3 | (3.5) | % | ||||||||||||||||||||||||||||||||||
| F&I, net | 216.8 | 237.8 | (21.0) | (8.8) | % | 0.2 | (8.9) | % | ||||||||||||||||||||||||||||||||||
| Total gross profit | $ | 860.6 | $ | 935.8 | $ | (75.2) | (8.0) | % | $ | 0.7 | (8.1) | % | ||||||||||||||||||||||||||||||
| Gross margin: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | 6.7 | % | 7.3 | % | (0.6) | % | ||||||||||||||||||||||||||||||||||||
| Used vehicle retail sales | 4.8 | % | 5.2 | % | (0.4) | % | ||||||||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | (0.5) | % | 0.3 | % | (0.8) | % | ||||||||||||||||||||||||||||||||||||
| Total used | 4.3 | % | 4.8 | % | (0.5) | % | ||||||||||||||||||||||||||||||||||||
| Parts and service sales | 56.2 | % | 56.1 | % | 0.1 | % | ||||||||||||||||||||||||||||||||||||
| Total gross margin | 16.0 | % | 16.4 | % | (0.4) | % | ||||||||||||||||||||||||||||||||||||
| Units sold: | ||||||||||||||||||||||||||||||||||||||||||
| Retail new vehicles sold | 53,335 | 55,763 | (2,428) | (4.4) | % | |||||||||||||||||||||||||||||||||||||
| Retail used vehicles sold | 53,469 | 60,240 | (6,771) | (11.2) | % | |||||||||||||||||||||||||||||||||||||
| Wholesale used vehicles sold | 15,315 | 17,030 | (1,715) | (10.1) | % | |||||||||||||||||||||||||||||||||||||
| Total used | 68,784 | 77,270 | (8,486) | (11.0) | % | |||||||||||||||||||||||||||||||||||||
| Average sales price per unit sold: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail | $ | 51,726 | $ | 50,557 | $ | 1,169 | 2.3 | % | $ | 39 | 2.2 | % | ||||||||||||||||||||||||||||||
| Used vehicle retail | $ | 32,195 | $ | 30,713 | $ | 1,482 | 4.8 | % | $ | 57 | 4.6 | % | ||||||||||||||||||||||||||||||
| Gross profit per unit sold: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | $ | 3,254 | $ | 3,557 | $ | (303) | (8.5) | % | $ | 1 | (8.5) | % | ||||||||||||||||||||||||||||||
| Used vehicle retail sales | $ | 1,532 | $ | 1,600 | $ | (69) | (4.3) | % | $ | 3 | (4.5) | % | ||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | $ | (47) | $ | 29 | $ | (76) | NM | $ | (2) | NM | ||||||||||||||||||||||||||||||||
| Total used | $ | 1,180 | $ | 1,254 | $ | (74) | (5.9) | % | $ | 2 | (6.0) | % | ||||||||||||||||||||||||||||||
| F&I PRU | $ | 2,030 | $ | 2,050 | $ | (20) | (1.0) | % | $ | 2 | (1.0) | % | ||||||||||||||||||||||||||||||
| Other: | ||||||||||||||||||||||||||||||||||||||||||
| SG&A expenses | $ | 623.5 | $ | 646.1 | $ | (22.6) | (3.5) | % | $ | 0.8 | (3.6) | % | ||||||||||||||||||||||||||||||
| SG&A as % gross profit | 72.4 | % | 69.0 | % | 3.4 | % | ||||||||||||||||||||||||||||||||||||
| Floorplan expense: | ||||||||||||||||||||||||||||||||||||||||||
| Floorplan interest expense | $ | 22.0 | $ | 26.4 | $ | (4.4) | (16.7) | % | $ | — | (16.8) | % | ||||||||||||||||||||||||||||||
Less: floorplan assistance (1) | 21.9 | 22.6 | (0.7) | (3.0) | % | — | (3.0) | % | ||||||||||||||||||||||||||||||||||
| Net floorplan expense | $ | 0.1 | $ | 3.8 | $ | (3.7) | $ | — | ||||||||||||||||||||||||||||||||||
(1) Floorplan assistance is included within Gross profit — New vehicle retail sales above and Cost of sales — New vehicle retail sales in our Condensed Consolidated Statements of Operations.
NM – Not Meaningful
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Same Store Operating Data — Consolidated
(In millions, except unit data)
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Increase/ (Decrease) | % Change | Currency Impact on Current Period Results | Constant Currency % Change | |||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | $ | 2,522.0 | $ | 2,590.6 | $ | (68.6) | (2.6) | % | $ | 2.0 | (2.7) | % | ||||||||||||||||||||||||||||||
| Used vehicle retail sales | 1,657.9 | 1,754.9 | (96.9) | (5.5) | % | 3.1 | (5.7) | % | ||||||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | 138.2 | 146.8 | (8.6) | (5.9) | % | 0.3 | (6.1) | % | ||||||||||||||||||||||||||||||||||
| Total used | 1,796.1 | 1,901.7 | (105.5) | (5.5) | % | 3.4 | (5.7) | % | ||||||||||||||||||||||||||||||||||
| Parts and service sales | 673.3 | 659.4 | 13.9 | 2.1 | % | 0.7 | 2.0 | % | ||||||||||||||||||||||||||||||||||
| F&I, net | 211.7 | 229.0 | (17.3) | (7.5) | % | 0.2 | (7.6) | % | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | 5,203.1 | $ | 5,380.7 | $ | (177.6) | (3.3) | % | $ | 6.2 | (3.4) | % | ||||||||||||||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||||||||||||||||||
| New vehicle retail sales | $ | 167.6 | $ | 189.5 | $ | (21.9) | (11.5) | % | $ | — | (11.6) | % | ||||||||||||||||||||||||||||||
| Used vehicle retail sales | 79.6 | 93.2 | (13.6) | (14.6) | % | 0.1 | (14.7) | % | ||||||||||||||||||||||||||||||||||
| Used vehicle wholesale sales | (0.2) | 1.1 | (1.4) | (119.6) | % | — | (116.6) | % | ||||||||||||||||||||||||||||||||||
| Total used | 79.4 | 94.3 | (15.0) | (15.9) | % | 0.1 | (16.0) | % | ||||||||||||||||||||||||||||||||||
| Parts and service sales | 377.2 | 377.7 | (0.6) | (0.2) | % | 0.3 | (0.2) | % | ||||||||||||||||||||||||||||||||||
| F&I, net | 211.7 | 229.0 | (17.3) | |||||||||||||||||||||||||||||||||||||||
Next expected filings
- ~2027-02-12 10-K expected by 2027-02-24 (in 106 days)
- ~2027-04-29 10-Q expected by 2027-05-11 (in 182 days)
- ~2027-07-29 10-Q expected by 2027-08-10 (in 273 days)
- ~2027-10-27 10-Q expected by 2027-11-08 (in 363 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-10-21 8-K Completion of Acquisition/Disposition; Financial Statements and Exhibits
- 2026-09-24 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-09-22 8-K Material Agreement Entered; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-09-22 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2026-09-10 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits
- 2026-09-08 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-08-11 8-K Officer/Director Change; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2026-07-30 8-K Material Agreement Entered; Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-07-30 10-Q Quarterly Report
- 2026-05-21 8-K Other Events; Financial Statements and Exhibits
- 2026-05-15 8-K Bylaws/Articles Amended; Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-30 10-Q Quarterly Report
- 2026-03-03 8-K Officer/Director Change