SAH 10-K & 10-Q changes, risk factors and insider trading

During the COVID-19 pandemic, the gross profit per unit for new and used vehicles increased above historic levels due to shortages in the availability of new and used vehicle inventory. In recentthe years,years following the pandemic, gross profit per unit has normalized and, while remaining higher than historic levels before the COVID-19 pandemic, has trended downwards as inventory, particularly for new vehicles, has become more readily available. If gross profit per unit continues to decline, as we anticipate it will,may, it willcould adversely affect our business and results of operation.

A reduction in the availability of, or access to, sources of desirable, high-quality used vehicle inventory could have a material adverse effect on our business, sales and results of operations at all of our locations. In recent years, we have experienced low used vehicle inventory availability at wholesale auction and from off-lease turn-ins, which led to an increase in the cost to acquire high-quality used vehicle inventory. To the extent that used vehicle inventory levels remainare low (compared to historical levels) and the costs to acquire high-quality inventory remainare high, we may experience decreased sales volume and margins on sales of our used vehicle inventory, which may have a material negative impact on our business, results of operations and profitability, particularly in the EchoPark Segment.

We obtain a significant percentage of our used vehicle inventory through our proprietary trade-in appraisal system as this sourcing outlet is generally more profitable and more convenient for our guests and potential guests. A significant portion of our used vehicle inventory is sourced through trade-ins for purchases of new vehicles, which, because of lower production levels during the COVID-19 pandemic, remain limited in supply.vehicles. Accordingly, if we fail to make appraisal offers in line with broader market trade-in offer trends, or fail to recognize those trends, it could adversely affect our ability to acquire used vehicle inventory and increase the risk of loss of business to our competitors. Loss of sale, involving trades and insufficient levels of inventory, could also force us to purchase a greater percentage of used vehicle inventory from third-party wholesale auctions, which is generally less profitable due to high bidding costs and additional costs associated with transporting the acquired used vehicles to our store locations. Our inability to source high-quality used vehicle inventory from third-party auctions could reduce the demand for our used vehicle inventory offerings. See “Increasing competitionCompetition among automotive retailers and the use of the internet in automotive retail may reduce our profit margins on vehicle sales and related businesses” above in this “Item 1A. Risk Factors” for further discussion.

Our business is dependent on global economies and supply chains that could be adversely affected by natural and man-made disasters, includingadverse theweather effectsand ofpublic pandemicshealth like the COVID-19 pandemic.crises.

A significant portion of vehicle buyers finance their purchases of automobiles. Sub-prime lenders have historically provided financing for consumers who, for a variety of reasons including poor credit histories and lack of down payment, do not have access to more traditional finance sources. In 2024, sustained high consumer retail automotive lending rates negatively impacted finance and insurance product penetration rates and the negative impact to affordability reduced new and used retail unit volumes industry-wide. In the event that interest rates remainare at elevated levels or rise further,rise, lenders tighten their credit standards, or there is a decline in the availability of credit in the consumer lending market, the costs of financing could influence consumer buying decisions and the ability of consumers to purchase vehicles could be limited, which could have a material adverse effect on our business, revenues and profitability.

A significant portion of our new vehicle business involves the sale of vehicles, parts or vehicles composed of parts that are manufactured outside the U.S. As a result, our operations are subject to risks of importing merchandise, including in the relative values of currencies, import duties or tariffs, exchange controls, trade restrictions, fluctuations in the relative values of currencies, work stoppages, supply chain disruptions ordisruptions, production delays, inflation, increases in interest rates, and general political and socioeconomic conditions in other countries. In addition, armed conflict and increased international political or economic instability, including the escalation of trade tensions,tensions as a result of economic sanctions imposed in the U.S. or otherwise, may cause disruptions to foreign and domestic supply chains and manufacturing operations—including as a result of economic sanctions imposed by the U.S.—or result in price increases that adversely impact automotive manufacturers or our new vehicle business. In February 2025, the U.S. government announced the imposition of various tariffs, including tariffs targeting imported automobiles and automobile parts and other tariffs on importsgoods from Canada,specific Mexicocountries and China.trading Subsequently,blocs. theThe U.S. agreedhas tobeen pausetargeted with reciprocal tariffs and other retaliatory actions in response. Although the implementation of themany of these tariffs onand importsretaliatory frommeasures Canadahave been paused or delayed and Mexiconegotiations and the extentstate of international trade policy and relations continue to whichevolve, these ortariffs, similarand other quotas, duties, tariffs willor takeother effectrestrictions, remainsor uncertain.adjustments Theto presently existing quotas, duties or tariffs in the future, imposed by the U.S. or the countries from which our products are imported may, in the future, impose new quotas, duties, tariffs or other restrictions, or adjust presently prevailing quotas, duties or tariffs, whichimported, may affect our operations and our ability to purchase imported vehicles and/or parts at reasonable prices, which may negatively affect affordability to consumers of certain new vehicles and reduce demand for certain vehicle makes and models.

Changes in consumer demand toward fuel-efficient hybrid vehicles, plug-in hybrid electric vehicles and battery electric vehicles, and resulting shifts by manufacturers to meet demand, could disrupt our ongoing business or have a material adverse effect on our overall business and results of operations.

Variability in consumer behavior, volatile fuel prices and the availability of manufacturer initiatives and federal and state tax credits and incentives to increase the use of fuel-efficient and electric vehicles have affected and may continue to affect consumer preferences for new and used vehicles. ManufacturersIn haverecent alsoyears, manufacturers increased production focus on the manufacture of fuel-efficient hybrid vehicles, plug-in hybrid electric vehicles (“PHEVs”) and battery electric vehicles (“BEVs”). The rate at which our customers will demand such vehicles, as well as the ability of manufacturers to accurately predict and meet such demand, is dependent on various factors. Recently,Subsequently, the supply of BEVs has exceeded actual demand, which has resulted in rising inventory levels.levels and declines in new vehicle margins as dealers attempted to match inventory levels with consumer demand. While the expiration of the federal tax credit on certain electric vehicles on September 30, 2025 resulted in a higher rate of electric vehicle sales during 2025, many manufacturers have significantly curtailed their expansion of PHEV and BEV production. The inability of manufacturers to produce such vehicles at levels consistent with the overall level of customer demand actually experienced, or our inability to tailor our inventory levels and sales practices to meet fluctuations in demand for these vehicles, could disrupt our ongoing business or have a material adverse effect on our overall business and results of operations.

We have invested and expect to continue to invest in new business strategies, services and technologies, including our EchoPark and powersports businesses. Such endeavors involve significant risks and uncertainties, including allocating management time and resources away from our other operations, insufficient revenues to offset expenses associated with these new investments, inadequate return of capital on our investments and unidentified issues not discovered in our due diligence of such strategies and offerings. Because these ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not have a material adverse effect on our reputation, financial condition and operating results.

Our ability to make acquisitions, execute our growth strategy for each of our EchoParkbusiness businesssegments and grow organically may be restricted by our ability to obtain capital, the terms of the instruments governing our long-term debt and the need to obtain consent from manufacturers.

We intend to finance future real estate and dealership acquisitions with cash generated from operations, through issuances of our stock or debt securities and through borrowings under credit arrangements. We may not be able to obtain additional financing by issuing stock or debt securities due to the market price of our Class A Common Stock, overall market conditions or certain covenants under the instruments that govern our long-term debt that restrict our ability to issue additional indebtedness, or the need for manufacturer consent to the issuance of equity securities. In recent years, financial markets have experienced elevated interest rates, which may make it more difficult for us to obtain financing on attractive terms. Using cash to complete acquisitions or to invest in our EchoPark expansion plans could substantially limit our operating and financial flexibility.

The amount of capital presently available to us is limited to the liquidity available under our existing debt agreements and cash flows generated through operating activities. Pursuant to the Credit Facilities (as defined below), we are restricted from making dealership acquisitions without lender consent in any fiscal year if the aggregate cost of all such acquisitions is in excess of certain amounts. Our ability to obtain additional sources of financing may be limited by the fact that substantially all of the assets of our dealerships are pledged to secure the indebtedness under the Credit Facilities and the Silo Floor Plan Facilities (as defined below). These pledges may impede our ability to borrow from other sources. The pace and scale of the growth of our EchoPark and powersports businesses may be limited in the event other sources of capital are unavailable.

In recent years, certain manufacturers whose new vehicles we sell have announced plans to developimplemented an “agency” model of selling new vehicles in certain European markets, which is intended to facilitate sales directly by the manufacturer to the customer, using the existing franchised dealership as a logistics and delivery partner. Under currently proposedcurrent agency models, our franchised dealerships would receive a fee or similar compensation for facilitating the sale by the manufacturer of a new vehicle, but the purchased new vehicle would not be held in inventory. The timing and extent of further implementation and evaluating the relative success of agency sales models in European markets are uncertain and difficult to predict. Further, it is difficult to predict whether such a model may be adopted by manufacturers or permitted by state laws in the U.S. Adoption of this sales model by manufacturers in the geographic markets in which we operate could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Events such as stop-sale orders, labor strikes or other disruptions in production, including those caused by natural disasters,disasters or cybersecurity incidents, which may adversely affect a manufacturer may also adversely affect us. In particular, labor strikes at a manufacturer that continue for a substantial period of time could have a material adverse effect on our business. Similarly, the delivery of vehicles from manufacturers at a time later than scheduled due to supply chain disruptions or other delays, which may occur during critical periods of new product introductions, could limit sales of those vehicles during those periods. Adverse conditions affecting these and other important aspects of manufacturers’ operations and public perception may adversely affect our ability to sell their automobiles and, as a result, significantly and detrimentally affect our business and results of operations.

As of December 31, 2024,2025, our total outstanding indebtedness was approximately $3.5 billion, which includes floor plan notes payable, long-term debt and short-term debt.

We have up to $350.0 million of maximum borrowing availability under an amended and restated syndicated revolving credit facility (the “Revolving Credit Facility”) and up to $2.6$$2.1 billion of maximum borrowing availability for combined syndicated new and used vehicle inventory floor plan financing (the “Floor Plan Facilities” and, together with the Revolving Credit Facility, the “Credit Facilities”). As of December 31, 2024,2025, we had approximately $338.5$300.3 million available for additional borrowings under the Revolving Credit Facility based on the applicable borrowing base calculation, which is affected by numerous factors, including eligible asset balances. We are ablepermitted to borrow under the Revolving Credit Facility only if, at the time of the borrowing, we havecan metprovide all representations and warranties and are in compliance with all financial and other covenants contained therein. We have capacity to finance new and used vehicle inventory purchases under floor plan agreements with various manufacturer-affiliated captive finance companies and other lending institutions (the “Silo Floor Plan Facilities”) as well as the Floor Plan Facilities. As of December 31, 2024,2025, we had approximately $120.0$95.0 million of total remainingavailability availabilityfor revolving loans under oura delayedreal draw-term loanestate-based credit agreement entered into in November 2019 (the "“Mortgage Facility"”) based on the borrowing base calculation which varies in borrowing limit based on the appraised value of the collateral underlying the Mortgage Facility.. In addition, our 4.625% Senior Notes due 2029 (the “4.625% Notes”), our 4.875% Senior Notes due 2031 (the “4.875% Notes”), our real estate-based credit agreement entered into in December 2024 (the “Sidecar Facility”) and our other debt instruments allow us to incur additional indebtedness, including secured indebtedness, as long as we comply with the terms thereunder.

A significant number of our dealership properties are subject to long-term operating lease arrangements that commonly have initial terms of 10 to 20 years with renewal options generally ranging from five to 10 years. Many of these operating leases require compliance with financial and operating covenants similar to those under the Credit Facilities and require monthly payments of rent that may fluctuate based on interest rates and local consumer price indices. The total future minimum lease payments related to these operating leases and certain equipment leases are significant and are disclosed in Note 12, “Commitments and Contingencies,” to the accompanying consolidated financial statements.

The instruments that govern our long-term indebtedness contain certain provisions that may cause all or a substantial portion of the outstanding principal amount of our indebtedness to become immediately due and payable. The Credit Facilities, the Mortgage Facility and the Sidecar Facility, the indentures governing the 4.625% Notes and the 4.875% Notes, and many of our operating leases contain numerous financial and operating covenants. A breach of any of these covenants could result in a default under the applicable agreement. In addition, a default under one agreement could result in a cross default and acceleration of our repayment obligations under the other agreements or prevent us from borrowing under such other agreements. If a default or cross default were to occur, we may not be able to pay our debts or to borrow sufficient funds to refinance them. Even if new financing were available, it may not be on terms acceptable to us. If a default were to occur, we may be unable to adequately finance our operations because of acceleration and cross-default provisions and the value of our common stock would be materially adversely affected. As a result of this risk, we could be forced to take actions that we otherwise would not take, or not take actions that we otherwise might take, in order to comply with the covenants in these agreements.

Moreover, many of our mortgage notes’ principal and interest payments are based on an amortization period longerthat thanextends beyond the actual terms (maturity dates) of the notes. We will be required to repay or refinance the remaining principal balances for certain of our mortgages with balloon payments at the notes’ maturity dates, which range from 20252026 to 2033.2031. The amounts to be repaid or refinanced at the maturity dates could be significant. We may not have sufficient liquidity to make such payments at the notes’ maturity dates.

In addition, upon the occurrence of a change of control (as defined in the indentures governing the 4.625% Notes and the 4.875% Notes), holders of such notes will have the right to require us to purchase all or any part of such holders’ notes at an applicable premium. The events that constitute a change of control under the indentures governing the 4.625% Notes and the 4.875% Notes may also constitute a default under the Credit FacilitiesFacilities, the Mortgage Facility and the MortgageSidecar Facility. The agreements or instruments governing any future debt that we may incur may contain similar provisions regarding repurchases in the event of a change of control triggering event.

To reduce our exposure to fluctuations in cash flow due to interest rate fluctuations, we have entered into, and in the future may enter into, certain derivative instruments (or hedging agreements). As of December 31, 2024,2025, we had interest rate cap agreements related to a portion of our Secured Overnight Financing Rate (“SOFR”)-based variable rate debt to limit our exposure to rising interest rates. See the heading “Derivative Instruments and Hedging Activities” under Note 6, “Long-Term Debt,” to the accompanying consolidated financial statements. We intend to hedge as much of our interest rate exposure as management determines is in our best interest based on potential volatility and the cost of such hedging transactions.

Our Chairman and Chief Executive Officer, David Bruton Smith, as well as Marcus G. Smith and B. Scott Smith, also serve as directors of Speedway Motorsports. Further, the Smith family and certain trusts, the beneficiaries of which are members of the Smith family, directly and indirectly control a substantial majority of the voting power of our company’s outstanding voting stock.

Our business is heavily dependent on consumer demand and preferences. Retail new vehicle sales are cyclical and historically have experienced periodic downturns characterized by oversupply and weak demand. In recent years, we experienced an imbalance between consumer demand for new vehicles and available supply of new vehicle inventory due to supply chain disruptions and manufacturing delays. However, vehicle availability has largely recovered, and as inventory levels build, profit margins may be adversely affected. Retail vehicle sales cycles are often correlated with changes in overall economic conditions, consumer confidence, the level of discretionary personal income and credit availability. Deterioration in any of these conditions from current levels may have a material adverse effect on our retail business, particularly sales of new and used automobiles. Recently, the U.S. economy experienced elevated levels of inflation, tariff pressures, heightened interest rates and volatile gasoline and automobile insurance prices, which, combined with higher vehicle prices, have created affordability challenges for our consumers. In the event that the cost to consumers remains elevated, or increases further, consumers may be less willing to purchase vehicles. In addition, our business may be adversely affected by isolated unfavorable conditions or events in our local markets. Due to the provisions and terms contained in our franchise or dealer agreements or operating lease agreements, we may not be able to relocate a dealership operation to a more favorable location without incurring significant costs or penalties, if permitted at all. In addition, severe or sustained changes in gasoline prices or overall shifts in consumer sentiment toward alternative fuel vehicles may lead to a shift in consumer buying patterns. Availability of preferred models may not exist in sufficient quantities to satisfy consumer demand and allow our stores to meet sales expectations.

Although we arecontinue workingto work with CDK and other information technology vendors andto takingtake steps to strengthen our systems infrastructure, there can be no assurance that we will not be affected by another cyberattack or other cybersecurity incident affecting our information systems, including those provided to us by third parties. We remain exposed to the risk of additional interruptions of service or loss of access to systems (including our internal or externally hosted business applications) supporting our critical business functions and processes, which may negatively affect our ability to deliver vehicles or complete transactions with customers; unauthorized access or theft of customer or employee personal confidential information, including financial information, or strategically sensitive data; disruption of communications (both internally and externally) that may affect the quality of information used to make informed business decisions; additional costs and expenses; and damage to our reputation. Any cybersecurity breach or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, lost sales or damage to our reputation, and otherwise cause a loss of confidence in our services, which could materially adversely affect our competitive position, results of operations and financial condition.

We are one of the largest automotive retailers in the U.S. (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of December 31, 20242025: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of December 31, 2024,2025, we operated 108111 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment, and 1514 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 133134 new vehicle franchises (representing 2524 different brands of cars and light trucks) and 16 collision repair centers in 18 states. The EchoPark Segment consists of 18 stores operating in 10 states. The Powersports Segment consists of 1141 franchises at 14 locations (11 full-service dealerships and fourthree authorized retail outlets) in three states.

The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) unit sales volume was approximately 16.3 million vehicles in 2025, an increase of 1%, compared to approximately 16.1 million vehicles in 2024, an increase of 4%, compared to approximately 15.5 million vehicles in 2023, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 20252026 new vehicle industry volume will be between 16.115.8 million vehicles (flata decrease of 3% compared to 20242025) and 16.5 million vehicles (an increase of 2%1% compared to 20242025). The effects of interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand as a result of economic conditions, natural disasters or other unforeseen circumstances could cause the actual 20252026 new vehicle industry volume to vary from expectations. Many factors, including brand and geographic concentrations as well as the industry sales mix between retail and fleet new vehicle unit sales volume, have caused our past results to differ from the industry’s overall trend. Our new vehicle sales strategy focuses on our retail new vehicle sales (as opposed to fleet new vehicle sales) and, as a result, we believe it is appropriate to compare our retail new vehicle unit sales volume to the industry retail new vehicle seasonally adjusted annual rate of unit sales volume (the “retail new vehicle SAAR”) (which excludes fleet new vehicle sales). According to PIN from J.D. Power, the retail new vehicle SAAR increased 3%,4%, to approximately 13.6 million vehicles, in 2025, from approximately 13.1 million vehicles, in 2024, from approximately 12.7 million vehicles in 2023.2024.

Impairment charges were approximately $3.9$173.8 million and $79.3$3.9 million in 20242025 and 2023,2024, respectively. Impairment charges for 2025 included approximately $165.9 million in the Franchised Dealerships Segment related to indefinite lived franchise assets, approximately $0.2 million in the EchoPark Segment related to property held for sale, and approximately $7.6 million in the Powersports Segment related to indefinite lived franchise assets. Impairment charges for 2024 included approximately $2.7 million in the EchoPark Segment related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property as a result of our decisions to indefinitely suspend operations at certain EchoPark locations, and approximately $1.2 million of property and equipment impairment charges related to the Franchised Dealerships Segment. Impairment charges for 2023 included approximately $78.3 million in the EchoPark Segment related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property as a result of our decisions to indefinitely suspend operations at certain EchoPark locations, and approximately $1.0 million of property and equipment impairment charges related to the Franchised Dealerships Segment.

Same store retail new vehicle revenue increased 4%5% in 2024,2025, primarily driven by a 5%2% increase in retail new vehicle unit sales volume, offsetdriven partiallyin part by an increase in consumer demand for electric vehicles ahead of expiration of the federal tax credit in the third quarter of 2025, combined with a 1%2% decreaseincrease in retail new vehicle average selling price. Retail new vehicle gross profit decreased 27%7% in 2024,2025, due primarily to increased price competition resulting from higherincreasing levels of available inventory and higher costinventory ofinvoice goods sold per unit,cost, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $1,468$310 per unit, or 30%,9%, to $3,387$3,094 per unit. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 48 days as of December 31, 2025, compared to 46 days as of December 31, 2024, compared to 37 days as of December 31, 2023, as a result of increased manufacturer production levels and lower consumer demand resulting from affordability challenges.2024.

Same store retail used vehicle revenue decreasedincreased 4%3% in 2024,2025, driven by a 6%3% decreaseincrease in retail used vehicle average selling price, offset partially by a 2% increase in retail used vehicle unit sales volume.price. Retail used vehicle gross profit decreasedincreased 7%2% in 2024,2025, primarily due to lowerhigher retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit decreasedincreased $154$25 per unit, or 9%,2%, to $1,477$1,516 per unit in 2024,2025, due primarily to higher inventoryretail acquisitionused costsvehicle and loweraverage selling prices due to increased price competition as a result of ongoing consumer affordability challenges, including the effect of higher interest rates.price. Same store wholesale vehicle gross profit (loss) worsened by approximately $2.0$4.5 million, to a gross loss of $4.3$8.8 million during 2024,2025, due primarily to a $95$188 per unit, or 81%,91%, increaseworsening inof wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. We generally focus on maintaining used vehicle inventory days’ supply in the 25- to 35-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 31 days as of December 31, 2024, compared to 29 days as ofboth December 31, 2023.2025 and 2024.

Same store Fixed Operations revenue increased 6%, driven primarily by increased service capacity as a result of additional technicianstechnician headcount and higher parts and labor costs that were passed along to consumers, despite being negatively affected by the CDK outage.consumers. Fixed Operations gross profit increased 7%8% in 2024,2025, driven primarily by higher warranty revenue contribution and higher warranty gross margin. Fixed Operations gross margin increased 7060 basis points, to 50.4%,51.0%, in 2024,2025, driven primarily by an increase in warranty revenue contribution and higher warranty gross margin.

Same store F&I revenue increased 2%9% in 2024,2025, driven by a 4%7% increase in combined new and used retail unit sales volume, offset partially by a decrease in F&I gross profit per unit. F&I gross profit per retail unit decreasedand $36a 1% increase in retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $174 per unit, or 1%,7%, to $2,377$2,551 per unit,unit in 2024,2025, driven by changes in the mix of F&I products sold.

Reported total revenues decreased 13%3% in 2024,2025, driven primarily by a 9%3% decrease in average retail used vehicle selling price and a 6%1% decrease in total vehicle unit sales volume (retail used vehicles and wholesale vehicles combined). Reported total gross profit increased 28%13% in 2024,2025, primarily due to ana $45215% increase in combined retail used vehicle gross profit (loss) per unit and a $395 increase in F&I gross profit per unit, partially offset by the decrease in retail used vehicle unit sales volume.unit.

Same market total revenues increaseddecreased 4%2% in 2024,2025, drivenattributable primarily byto a 10%2% increasedecrease in retail used vehicle unit sales volume, offsetcoupled partially bywith a 7%3% decrease in average selling price per used retail unit. Same market total gross profit increased 48%12% in 2024,2025, driven primarily by a 271%14% increase in combined retail used vehicle and F&I gross profit per unit.

Reported retail used vehicle revenue decreased 14%,5%, due to a 9%3% decrease in average retail used vehicle unit selling prices and a 6%2% decrease in retail used vehicle unit sales volume. F&I revenue increased 9%13% in 2024,2025, driven primarily by a 16%15% increase in F&I gross profit per retail unit.unit, partially offset by a 2% decrease in total retail units in 2025. Reported combined retail used vehicle and F&I gross profit per unit increased $846$455 per unit, or 39%,15%, to $3,029$3,484 per unit in 2024,2025, primarily due to increasesthe increase in F&I revenue.

Reported wholesale vehicle gross profitloss decreasedworsened by approximately $2.2$0.5 million, to a gross loss of approximately $1.8 million in 2024,2025, primarily due to a 257% decreaseworsening in wholesale vehicle gross profitloss of $30 per unit.unit, or 27%, during 2025. We generally focus on maintaining EchoPark Segment used vehicle inventory days’ supply in the 30- to 40-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported used vehicle inventory days’ supply in our EchoPark Segment was approximately 40 days as of December 31, 2025, as compared to 38 days as of December 31, 2024, as compared to 36 days as of December 31, 20232024

Reported retail new vehicle revenue decreasedincreased 7%29% in 2024,2025, primarily driven by a 12%21% decreaseincrease in retail new vehicle unit sales volume, offsetcoupled partially bywith a 6% increase in retail new vehicle average selling price. RetailReported retail new vehicle gross profit decreasedincreased 31%37% in 2024,2025, as a result of lowerhigher retail new vehicle unit sales volume and lowerhigher retail new vehicle gross profit per unit. RetailReported retail new vehicle gross profit per unit decreasedincreased $722$337 per unit, or 21%,12%, to $2,713$3,050 per unit, due primarily to higher inventoryretail invoicenew costs.vehicle average selling price.

Same store usedretail new vehicle revenue increased 12%19% in 2024,2025, primarily driven by a 17%11% increase in retail usednew vehicle unit sales volume, coupled with a 7% increase in retail new vehicle average selling price. Retail usednew vehicle gross profit decreasedincreased 4%24% in 2024,2025, as a result of lowerthe increase in retail usednew vehicle unit sales volume.volume and increase in retail new vehicle gross profit per unit. Retail usednew vehicle gross profit per unit increased $34$319 per unit, or 1%,12%, to $2,420$3,032 per unit.unit, due primarily to the increase in retail new vehicle unit sales volume. On a trailing quarter cost of sales basis, our reported Powersports Segment usednew vehicle inventory days’ supply was approximately 115140 days as of December 31, 2025, compared to 178 days as of December 31, 2024, comparedvarying to 118 days as of December 31, 2023. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75- to 100-day range, dependingbased on seasonalitymanufacturer (typicallyproduction the secondlevels and thirdconsumer quarter has more demand and lower days’ supply compared to the first and fourth quarters).demand.

Reported retail used vehicle revenue increased 14%70% in 2024,2025, primarily driven by a 16%54% increase in retail used vehicle unit sales volume, coupled with a 10% increase in retail used vehicle average selling price. RetailReported retail used vehicle gross profit decreasedincreased 2%28% in 2024,2025, as a result of lowerhigher retail used vehicle unit sales volume. RetailReported retail used vehicle gross profit per unit increaseddecreased $3$417 per unit, or flat,17%, to $2,397$1,980 per unit.unit, primarily due to higher inventory costs.

Reported Fixed Operations revenue decreasedincreased 4%12% and Fixed Operations gross profit decreasedincreased 6%15% in 2024,2025, driven primarily by lowerhigher repair order volume.volume as a result of acquisitions. Fixed Operations gross margin decreasedincreased 100150 basis points to 46.0%47.5% in 2024,2025, driven primarily by aan decreaseincrease in customer paywarranty revenue contribution and lower customer pay gross margin.

Reported F&I revenue decreasedincreased 1%15% in 2024,2025, driven primarily by a 9%33% decreaseincrease in combined retail new and used vehicle unit sales volume, slightly offset partially by a 7%12% increasedecrease in F&I gross profit per retail unit. F&I gross profit per retail unit increaseddecreased $75$133 per unit, or 7%,12%, to $1,092$959 per unit in 2024.2025.

We currently estimate the 20252026 new vehicle industry volume will be between 16.115.8 million vehicles (flata decrease of 3% compared to 20242025) and 16.5 million vehicles (an increase of 2%1% compared to 20242025). The effects of availability of new and used vehicle inventory, interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand as a result of economic conditions, natural disasters or other unforeseen circumstances could cause the actual 20252026 new vehicle industry volume to vary from expectations.

For further analysis of new vehicle results,results on a segment basis, see the tables and discussion under the headings “New Vehicles - Franchised Dealerships Segment” and “New Vehicles - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.

For further analysis of used vehicle results,results on a segment basis, see the tables and discussion under the headings “Used Vehicles - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “Used Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.

Wholesale vehicle revenues are affectedinfluenced by several factors, including retail new and used vehicle unit sales volume and thevolume, associated trade-in volume, as well asand short-term, temporarytemporary, and seasonal fluctuations in wholesale auction pricing. In recent years, wholesale vehicle prices and supply at auction have experienced periods of volatility, impacting our wholesale vehicle revenues and related gross profit (loss), as well as our retail used vehicle revenues and related gross profit. We believe that the current wholesale vehicle price environment is not sustainable in the long term and expect that average wholesale vehicle pricing and related gross profit (loss) will continue to return toward long-term normalized levels in the long run, but may continue to experience volatility into 20252026 or beyond. Wholesale vehicle revenues are also significantly affected by our corporate inventory management strategy and policies, which are designed to optimize our total used vehicle inventory and expected gross profit levels and minimize inventory carrying risks.

For further analysis of wholesale vehicle results,results on a segment basis, see the tables and discussion under the headings “Wholesale Vehicles - Franchised Dealerships Segment,” “Wholesale Vehicles - EchoPark Segment” and “Wholesale Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.

For further analysis of Fixed Operations results,results on a segment basis, see the tables and discussion under the headings “Fixed Operations - Franchised Dealerships Segment” and “Fixed Operations - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.

For further analysis of F&I results,results on a segment basis, see the tables and discussion under the headings “F&I - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “F&I - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.

RetailSame store retail new vehicle revenue increased 4%,5%, primarily due primarily to a 5%2% increase in retail new vehicle unit sales volume,volume partially offset byand a 1%2% decreaseincrease in retail new vehicle average selling price. Retail new vehicle gross profit decreased approximately $138.5$26.8 million, or 27%,7%, as a result of lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $1,468$310 per unit, or 30%,9%, to $3,387$3,094 per unit, primarily due primarily to increased price competition as a result of higher levels of available inventoryinventory, particularly electric vehicles, than in the prior year and higher inventory invoice costs. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 4648 and 3746 days as of December 31, 20242025 and 2023,2024, respectively.

Same Store Retail used vehicle revenue decreasedincreased approximately $115.7$92.7 million, or 4%,3%, driven primarily by a 6%3% decreaseincrease in retail used vehicle average selling price, partially offset by a 2% increase in retail used vehicle unit sales volume.price. Retail used vehicle gross profit decreasedincreased approximately $11.7$3.1 million, or 7%,2%, primarily driven primarily by a $154$25 per unit, or 9%2% decreaseincrease in retail used vehicle gross profit per unit, partially offset by a 2% increase in retail used vehicle unit sales volume during 2024.unit.

On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 31 and 29 days as of both December 31, 20242025 and 2023, respectively.2024.

Same store wholesale vehicle revenue decreasedincreased 7%,$10.1 million, or 5%, driven primarily by a 9%7% increase in wholesale vehicle unit sales volume, offset slightly by a 1% decrease in wholesale vehicle revenue per unit, offset partially by a 3% increaseunit in wholesale vehicle unit sales volume in 2024. The increase in wholesale vehicle unit sales volume was driven by a continued increase in the supply of new vehicle inventory resulting in a sales mix with higher retail new and used vehicle sales volume.2025. Wholesale vehicle gross loss worsened by approximately $2.0$4.5 million, driven primarily by a $95$188 per unit increaseworsening in wholesale vehicle gross loss per unit during 2024.2025.

Fixed Operations revenue increased approximately $96.3$109.1 million, or 6%, and Fixed Operations gross profit increased approximately $60.1$67.5 million, or 7%.8%. Customer pay gross profit increased approximately $17.9$26.1 million, or 4%,6%, warranty gross profit increased approximately $35.1$34.5 million, or 25%,20%, wholesale parts gross profit decreased approximately $2.8$2.7 million, or 8%, and internal, sublet and other gross profit increased approximately $9.9$9.6 million, or 5%.4%. Results have also been positively impacted by increased capacity realized through our efforts to hire and retain additional service technicians, with a net increase in service technician headcount of 335 technicians in 2024.technicians. As a result, we expect to continue to see growth in Fixed Operations revenues and gross profit in 2025.2026.

Same store F&I revenue increased 2%,$44.0 million, or 9%, primarily due to ana 7% increase in F&I gross profit per retail unit and a 1% increase in combined retail new and used vehicle unit sales volume, offset partially by lower F&I gross profit per retail unit.volume. F&I gross profit per retail unit decreasedincreased $36$174 per unitunit, or 7%, to $2,377$2,551 per unit, primarily due to a decrease inhigher gross profit per finance contract and lowerper service contract and increased penetration rates for finance, service and other aftermarket contract penetration rates.contracts.

FinanceSame store finance contract revenue increased 1%,8%, primarily due to a 130-basis6% increase in gross profit per finance contract and a 2% increase in finance contract volume. The increase in finance contract volume is due to a 1% increase in total retail unit sales and a 30 basis point increase in the combined new and used vehicle finance contract penetration rate. Service contract revenue increased 4%,7%, primarily due to a 2%3% increase in gross profit per service contract,contract offset partially byand a 90-basis4% increase in service contract volume. The increase in service contract volume is due to a 1% increase in total retail unit sales and a 100 basis point decreaseincrease in the service contract penetration rate. Other aftermarket contract revenue increased 4%,2%, driven primarily by a 5%2% increase in grossother profitaftermarket percontract volume. The increase in other aftermarket contract,contract offsetvolume partiallyis bydue to a 1% decreaseincrease in total retail unit sales and a 70 basis point increase in the other aftermarket contract volume.penetration rate.

All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. Same market results may vary significantly from reported results due to store closures during 2023 and 2024, as the closedclosure of stores that are notno longer included in same market results.

On June 22, 2023, Sonic announced a plan to indefinitely suspend operations at eight EchoPark locations and 14 related delivery/buy centers. In addition, during the third quarter of 2023, we closed three Northwest Motorsport locations within the EchoPark Segment. In January 2024, we closed the remaining seven Northwest Motorsport stores.stores within the EchoPark Segment. In light of these closures, we believe the following discussion of EchoPark Segment results on a same market basis provides a meaningful year-over-year comparison.

Our EchoPark operating strategy focuses on maximizing total used vehicle-related gross profit (based on a combination of retail used vehicle unit sales volume, front-end retail used vehicle gross profit (loss) per unit and F&I gross profit per retail unit sold) rather than realizing traditional levels of front-end retail used vehicle gross profit per unit. As such, we believe the best per unit measure of gross profit performance at our EchoPark stores is a combined total gross profit (loss) per retail unit, which includes both front-end retail used vehicle gross profit (loss) and F&I gross profit per retail unit sold. See the discussion under the heading “Results of Operations - Consolidated” for additional discussion of the macro drivers of used vehicle revenues and F&I revenues.

UsedSame market retail used vehicle revenue increaseddecreased approximately $39.7$80.5 million, or 2%,4%, due to a 10%2% increasedecrease in retail used vehicle unit sales volume, partially offset byand a 7%3% decrease in used vehicle revenue per unit. CombinedSame market combined used vehicle gross profit and F&I revenue increased approximately $70.0$25.5 million, or 50%,12%, due to ana $821,$424, or 36%,14%, increase in total used vehicle and F&I gross profit per unit. The increase in combined retail used vehicle and F&I gross profit per unit was due primarily to higher F&I penetration rates, an improvement in inventory acquisition costs as a result of paying lower wholesale auction prices, and sourcing a higher percentage of inventory from non-auction sources.

Within same market F&I revenue, finance contract gross profit increased approximately $3.7$1.5 million, or 3%, due to a 3% increase in gross profit per finance contract. Service contract gross profit increased approximately $6.7 million, or 9%, due to a 10% increase in retail unit sales volume, partially offset by a 1% decrease in gross profit per finance contract and a 20-basis point decrease in finance contract penetration rate. Service contract gross profit increased approximately $4.4 million, or 14%, due to a 3% increase in total service contracts and a 11% increase in gross profit per service contract, partially offset by a 310-basis point1% decrease in total service contract penetration rate.contracts. Other aftermarket product contract gross profit increased approximately $40.0$9.0 million, or 138%,13%, due to aan 91%11% increase in total aftermarket contracts, a 24%1% increase in gross profit per aftermarket contract, and a 7,790-basis2,390 basis point increase in other aftermarket product contract penetration rate as a result of our efforts to offer a wider range of F&I products to our guests.

Same market wholesale vehicle revenue increased 5%,13%, driven primarily by a 16%9% increase in same market wholesale vehicle unit sales volume, offsetand partiallya by an $880,$305, or 9%,4%, decreaseincrease in same market wholesale vehicle revenue per unit. Same market wholesale vehicle gross profit decreased approximately $2.2$1.1 million, due primarily to a decrease in same market wholesale vehicle gross profit per unit of $235$82 per unit. As we adjust the inventory mix of nearly-new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.

Our Powersports Segment consists of eight stores acquired during 2022, five stores acquired in the first quarter of 2023, and two stores acquired in the fourth quarter of 2024. As a result of thesethe acquisitions,acquisition and termination of certain powersports stores in 2024 and 2025, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores. The following discussion of new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a reported basis, except where otherwise noted. Our Powersports Segment results are subject to seasonal variations, such that the second and third quarters are generally expected to contribute higher revenues and segment income than the first and fourth quarters.

Same store retail new vehicle revenue decreasedincreased 9%,19%, due primarily to a 14%11% decreaseincrease in retail new vehicle unit sales volume,volume partiallyand offseta by an 5%7% increase in retail new vehicle average selling price. Same store retail new vehicle gross profit decreasedincreased approximately $5.4$2.7 million, or 33%,24%, as a result of lowerhigher retail new vehicle unit sales volume and lowerhigher retail new vehicle gross profit per unit. Same store retail new vehicle gross profit per unit decreasedincreased $743$319 per unit, or 22%,12%, to $2,687$3,032 per unit, due primarily to higher inventory invoice costs and changes in brand mix.unit.

On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 140 and 178 days as of December 31, 2024.2025 and 2024 respectively. We believe that in a normal production environment, the level of new vehicle inventory days’ supply in our Powersports Segment should be in the 90-90 to 120-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).

Same store retail used vehicle revenue increased 12%,61%, due primarily to a 17%49% increase in retail used vehicle unit sales volume and a 9% increase in retail used vehicle average selling price, partially offset by a 4% decrease in retail used vehicle unit sales volume.price. Same store retail used vehicle gross profit decreasedincreased approximately $0.2$1.1 million, or 4%,22%, due primarily to lowerhigher retail used vehicle unit sales volume.volume, offset partially by lower retail used vehicle gross profit per unit. Same store retail used vehicle gross profit per unit increaseddecreased $34$437 per unit, or 1%,18%, to $2,420$1,982 per unit, due primarily to changes in inventory mix and variations between wholesale and retail market pricing.

On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 115121 days as of December 31, 2024.2025. Going forward, we generally expect to maintain a used vehicle inventory days’ supply in our Powersports Segment in the 75-75 to 100-day range, depending on seasonality (typically the second and third quarters have more demand and lower days’ supply compared to the first and fourth quarters).

Same store wholesale vehicle revenue decreasedincreased approximately $0.1$0.4 million, and same store wholesale vehicle gross profit increased(loss) improved approximately $0.1$0.2 million, driven by changes in wholesale unit sales volume and wholesale gross profit per unit.

Same store Fixed Operations revenue decreasedincreased approximately $2.6$3.1 million and same store Fixed Operations gross profit decreasedincreased approximately $1.7$2.5 million. Same store customer pay revenue decreasedincreased approximately $4.4$0.3 million and same store customer pay gross profit decreasedincreased approximately $3.6$0.7 million. Same store warranty revenue increased approximately $2.4$0.7 million and same store warranty gross profit increased approximately $2.1$0.3 million. Same store wholesale parts revenue remaineddecreased flatapproximately year$0.2 over yearmillion and same store wholesale parts gross profit increaseddecreased approximately 0.1$0.1 million. Same store internal, sublet and other revenue decreasedincreased approximately $0.6$2.3 million and same store internal, sublet and other gross profit decreasedincreased approximately $0.3$1.6 million.

Same store F&I revenue decreasedincreased approximately $0.2$1.1 million, or 3%,16%, primarily due to a 11%24% decreaseincrease in total combined retail new and used vehicle unit sales volume, offset partially by a 9%5% increasedecrease in F&I gross profit per retail unit. F&I gross profit per retail unit increaseddecreased $89$54 per unit, or 9%,5%, to $1,106$1,019 per unit, primarily due to lower gross profits per finance and service contracts and decreased penetration rates for service and aftermarket contracts, offset partially by higher gross profit per aftermarket contract and an increase in the finance contract penetration rates.rate.

Same store finance contract revenue decreasedincreased 11%,20%, primarily due to lowera 28% increase in finance contract volume, offset partially by a 6% decrease in gross profit per finance contract. The increase in finance contract volume is driven by a 24% increase in total retail newunit sales volume and useda vehicle140 basis point increase in the finance contract penetration rate. Service contract revenue increased 5%, primarily due to a 21% increase in service contract volume, offset partially by a 13% decrease in gross profit per service contract. The increase in service contract unit sales volume is driven by a 24% increase in total retail unit sales volume, offset partially by a 160-basis60 point increase in the combined new and used vehicle finance contract penetration rate. Same store service contract revenue increased 24%, primarily due to a 40% increase in gross profit per service contract, offset partially by a 20-basisbasis point decrease in the service contract penetration raterate. and a 11% decrease in retail new and used vehicle service contract unit sales volume. Same store otherOther aftermarket contract revenue decreasedincreased 32%, driven45%, primarily bydue to a 22%20% decreaseincrease in aftermarket contract volume and a 21% increase in gross profit per other aftermarket contract. The increase in aftermarket contract andvolume is driven by a lower24% increase in total retail new and used vehicle unit sales volume.volume, offset partially by a 110 basis point decrease in aftermarket contract penetration rate.

(2)For 2025, amount includes approximately $40.0 million of pre-tax benefit from cyber insurance proceeds related to the CDK outage, approximately $5.0 million of pre-tax charges related to storm damage, approximately $5.5 million of pre-tax loss related to dispositions, and approximately $0.7 million of pre-tax legal expenses. For 2024, amount includes approximately $13.0 million of pre-tax charges related to excess compensation as a result of the CDK outage, approximately $8.3 million of pre-tax charges related to storm damage, approximately $3.5 million of pre-tax gain related to the acquisition of the remaining equity interest in a joint venture, $10.0 million of pre-tax gain related to the CDK outage cyber claim payment, and approximately $2.2 million of pre-tax charges related to severance and long-term compensation expense. For 2023, amount includes approximately $20.9 million of pre-tax gain related to acquisitions and dispositions and approximately $1.9 million of pre-tax charges related to storm damage.

(3)For 2025, amount includes approximately $0.9 million of pre-tax gain on dispositions. For 2024, amount includes approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.9 million of pre-tax charges for severance and long-term compensation expense, approximately $2.1 million of pre-tax gain on real estate dispositions, approximately $2.1 million of pre-tax charges related to closed store accrued expenses related to the indefinite suspension of operations at certain EchoPark locations, approximately $2.1 million of pre-tax gain on real estate dispositions, and approximately $0.4 million of pre-tax charges related to excess compensation as a result of the CDK outage. For 2023, amount includes approximately $10.0 million of pre-tax charges related to used vehicle inventory valuation adjustments, $5.1 million of pre-tax charges for long-term compensation expense, approximately $4.3 million of pre-tax lease exit charges and approximately $0.3 million of pre-tax loss related to acquisitions and dispositions.

(4)For 2025, amount includes approximately $1.1 million of pre-tax charges related to dispositions. For 2024, amount includes approximately $0.5 million of pre-tax charges related to severance and long-term compensation expense.

Unless otherwise noted, all discussiondiscussions of increases or decreases are for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025. The following discussion of Franchised Dealerships Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition. The following discussion of EchoPark Segment used vehicles, wholesale vehicles, and finance, insurance and other, net is on a same market basis, except where otherwise noted. All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. The following discussion of Powersports Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating stores in the Powersports Segment are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.

We are one of the largest automotive retailers in the U.S. (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of MarchJune 31,30, 2026: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of MarchJune 31,30, 2026, we operated 107 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment and 1420 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 127 new vehicle franchises (representing 24 different brands of cars and light trucks) and 1615 collision repair centers in 17 states. The EchoPark Segment consists of 18 stores in 10 states. The Powersports Segment consists of 4146 franchises at 1420 locations (1116 full-service dealerships and threefour authorized retail outlets) in threefive states.

The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) seasonally adjusted annual rate of unit sales volume (the “total new vehicle SAAR”) increased 2% and decreased 7%2% for the three and six months ended MarchJune 31,30, 2026, respectively, to approximately 15.516.3 million and 15.9 million vehicles, respectively, compared to approximately 16.616.0 million and 16.3 million vehicles for the three and six months ended MarchJune 31,30, 2025, respectively, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2026 new vehicle industry volume will be between 15.5 million vehicles (a decrease of 5% compared to 2025) and 16.0 million vehicles (a decrease of 2% compared to 2025). The effects of tariffs and trade policies, interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand asin aresponse result ofto economic conditions, geopolitical disruptions, energy prices, natural disasters or other unforeseen circumstances could cause the actual 2026 new vehicle industry volume to vary from expectations. Many factors, including brand and geographic concentrations as well as the industry sales mix between retail and fleet new vehicle unit sales volume, have caused our past results to differ from the industry’s overall trend. Our new vehicle sales strategy focuses on our retail new vehicle sales (as opposed to fleet new vehicle sales) and, as a result, we believe it is appropriate to compare our retail new vehicle unit sales volume to the industry retail new vehicle seasonally adjusted annual rate of unit sales volume (the “retail new vehicle SAAR”) (which excludes fleet new vehicle sales). According to PIN from J.D. Power, the retail new vehicle SAAR increased 1% and decreased 9%4% to approximately 12.813.6 million and 13.2 million vehicles for the three and six months ended MarchJune 31,30, 2026, respectively, from approximately 14.013.4 million and 13.7 million vehicles for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

Same store retail new vehicle revenue decreasedincreased 8%1% during the three months ended MarchJune 31,30, 2026, driven primarily by a 10% decrease in retail new vehicle unit sales volume, partially offset by a 3%1% increase in average selling price per new retail unitunit. forSame store retail new vehicle revenue decreased 4% during the threesix months ended MarchJune 31,30, 2026.2026, primarily driven by a 5% decrease in retail new vehicle unit sales volume. Retail new vehicle gross profit decreased 14%17% and 15% during the three and six months ended MarchJune 31,30, 2026, respectively, due primarily to theincreased effectsprice of tariffs on inventory invoice cost and lower consumer demandcompetition as a result of pre-tariffincreasing demand in the first quarterlevels of 2025,available inventory and higher inventory invoice costs, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit fordecreased $559, or 16%, to $2,872 per unit during the three months ended MarchJune 31,30, 2026. Retail new vehicle gross profit per unit decreased $133$349 per unit, or 4%,11%, to $3,002$2,934 per unit during the threesix months ended MarchJune 31,30, 2026. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 5856 days as of MarchJune 31,30, 2026, compared to 5154 days as of MarchJune 31,30, 2025.

Same store retail used vehicle revenue increased 2%9% and 5% during the three and six months ended MarchJune 31,30, 2026, respectively, driven primarily by a 3%7% and 5% increase in retail used vehicle unit sales volume.volume, respectively. Retail used vehicle gross profit decreased 1%8% and 4% during the three and six months ended MarchJune 31,30, 2026, respectively, primarily due to lower retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit decreased $59$214 per unit, or 4%,13%, to $1,533$1,401 per unit during the three months ended MarchJune 31,30, 2026. Retail used vehicle gross profit per unit decreased $136 per unit, or 8%, to $1,467 per unit during the six months ended June 30, 2026. Same store wholesale vehicle gross loss worsened by approximately $1.0$2.0 million to a gross loss of approximately $2.8 million during the three months ended June 30, 2026, due primarily to a $456 per unit, or 404%, worsening of wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. Same store wholesale vehicle gross loss worsened by approximately $3.0 million, to a gross loss of approximately $1.7$4.5 million during the threesix months ended MarchJune 31,30, 2026, due primarily to a $239$352 per unit, or 168%,277%, worsening of wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. We generally focus on maintaining Franchised Dealerships Segment used vehicle inventory days’ supply in the 25- to 35-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 3235 days as of Marchboth 31,June 2026,30, compared2026 toand 31June days as of March 31,30, 2025.

Same store Fixed Operations revenue increased 5%3% and 4% during the three and six months ended MarchJune 31,30, 2026, respectively, driven primarily by increased service capacity as a result of additional technician headcount, and higher parts and labor costs that were passed along to consumers. Same store Fixed Operations gross profit increased 5%2% and 4% during the three and six months ended MarchJune 31,30, 2026, respectively, driven primarily by higher customer pay revenue contribution and higher warranty and internal, sublet and other gross margin contribution. Same store Fixed Operations gross margin decreased 30 basis points, to 51.0% during the three months ended June 30, 2026, and increased 4010 basis points, to 51.1%, during the threesix months ended MarchJune 31,30, 2026.

Same market total revenues increased 4%15% and 9% during the three and six months ended MarchJune 31,30, 2026, respectively, attributable to a 2%16% and 9% increase in total vehicle unit sales volume (retail used vehicles plus wholesale used vehicles) in the three months ended March 31, 2026, and a 1% increase in average selling price per used retail unit in the threesix months ended MarchJune 31,30, 2026.2026, respectively. Same market total gross profit increased 6%3% and 5% during the three and six months ended MarchJune 31,30, 2026, respectively, primarily driven by a 2%the increase in total vehicle unit sales volume (retailin usedboth vehiclesthe plus wholesale used vehicles),three and six months ended June 30, 2026, partially offset by a 3%12% increaseand 5% decrease in combined retail used vehicle and F&I gross profit per unit.retail unit during the three and six months ended June 30, 2026, respectively.

Same market retail used vehicle revenue increased 4%17% and 10% during the three and six months ended MarchJune 31,30, 2026, respectively, driven primarily by a 3%17% and 10% increase in retail used vehicle unit sales volume, coupled with a 1% increase in average selling price per used retail unitvolume in the three and six months ended MarchJune 31,30, 2026.2026, respectively. F&I revenue increased 4% during both the three and six months ended MarchJune 31,30, 2026, driven primarily by a 3%the increase in retail used vehicle unit sales during the three and asix 1%months increaseended June 30, 2026, partially offset by an 11% and 5% decrease in F&I gross profit per unit in the three and six months ended MarchJune 31,30, 2026.2026, respectively. Same market combined retail used vehicle and F&I gross profit per unit increaseddecreased $86$466 per unit, or 2.5%,12%, to $3,518$3,303 for the three months ended MarchJune 31,30, 20262026, due primarily to increasesdecreases in both used vehicle gross profit per unit and F&I gross profit per unit. Same market combined retail used vehicle and F&I gross profit per unit salesdecreased volume$181 duringper unit, or 5%, to $3,410 for the threesix months ended MarchJune 31,30, 2026.2026, due primarily to decreases in both used vehicle gross profit per unit and F&I gross profit per unit.

Same market wholesale vehicle gross profit improved by approximately $0.4$0.5 million and $1.0 million during the three and six months ended MarchJune 31,30, 2026, respectively, primarily due to a 227%75% and 109% increase in wholesale vehicle gross profit per unit during the three and six months ended MarchJune 31,30, 2026.2026, respectively. We generally focus on maintaining EchoPark Segment used vehicle inventory days’ supply in the 30- to 40-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported EchoPark Segment used vehicle inventory days’ supply was approximately 4047 and 3541 days as of MarchJune 31,30, 2026 and 2025, respectively. The higher days’ supply as of June 30, 2026, reflected a deliberate increase in inventory levels to support higher retail unit sales. This differed from a typical quarter, during which we generally maintain inventory within our targeted 30- to 40-day range.

Same store retail new vehicle revenue increased 19%6% and 11% during the three and six months ended MarchJune 31,30, 2026, respectively, driven by a 16%3% and 8% increase in retail new vehicle unit sales volume, respectively, coupled with a 2%3% increase in retail new vehicle average selling price during both the three and six months ended MarchJune 31,30, 2026. Retail new vehicle gross profit increased 23%8% and 12% during the three and six months ended MarchJune 31,30, 2026, respectively, as a result of the increase in retail new vehicle unit sales volume and a 7%4% and 5% increase in same store retail new vehicle gross profit per unit.unit, respectively. Retail new vehicle gross profit per unit increased $182$103 per unit, or 7%,4%, to $2,891$2,925 per unit for the three months ended MarchJune 31,30, 2026. Retail new vehicle gross profit per unit increased $134 per unit, or 5%, to $2,910 per unit for the six months ended June 30, 2026. On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 162160 and 166135 days as of MarchJune 31,30, 2026 and 2025, respectively, varying based on manufacturer production levels and consumer demand.

Same store used vehicle revenue increased 77%40% and 54% during the three and six months ended MarchJune 31,30, 2026, primarilyrespectively, driven primarily by a 56%19% and 34% increase in retail used vehicle unit sales volumevolume, respectively, and a 14%17% and 15% increase in average used vehicle selling price during the three and six months ended MarchJune 31,30, 2026.2026, respectively. Retail used vehicle gross profit increased 60%25% and 42% during the three and six months ended MarchJune 31,30, 2026, respectively, driven by the increase in used vehicle unit sales volume and ana 8%4% and 5% increase in retail used vehicle gross profit per unit.unit, respectively. Retail used vehicle gross profit per unit increased $141$78 per unit, or 8%,4%, to $1,938$2,092 per unit for the three months ended MarchJune 31,30, 2026. Retail used vehicle gross profit per unit increased $92 per unit, or 5%, to $2,021 per unit for the six months ended June 30, 2026. On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 96103 and 83102 days as of MarchJune 31,30, 2026 and 2025, respectively.

Same store F&I revenue increased 29%20% and 24% during the three and six months ended MarchJune 31,30, 2026, respectively, driven primarily by a 30%9% and 18% increase in combined retail new and used vehicle unit sales volumevolume, coupled with increases in F&I gross profit per retail unit for the three and six months ended MarchJune 31,30, 2026. F&I gross profit per retail unit andincreased decreased $45$105 per unit, or 5%,12%, to $907$995 per unit for the three months ended MarchJune 31,30, 2026. F&I gross profit per retail unit increased $40 per unit, or 4%, to $955 per unit for the six months ended June 30, 2026.

The following table depicts the breakdown of our Franchised Dealerships Segment new vehicle revenues by brand for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following tabletables providesprovide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for new vehicles:

Same Store Franchised Dealerships Segment Retail New Vehicles – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Retail new vehicle revenue decreasedincreased approximately $131.5$12.8 million, or 8%,1%, due to a 10% decrease in retail new vehicle unit sales volume, driven in part by the pull-forward consumer demand for vehicles in the prior year period ahead of auto tariffs enacted in April 2025, partially offset by a 3%1% increase in retail new vehicle average selling prices.price. Retail new vehicle gross profit decreased $12.3$15.7 million, or 14%,17%, due to thea 10% decrease in retail new vehicle sales volume and the 4%16% decrease in retail new vehicle gross profit per unit.unit and lower retail new vehicle sales volume. Retail new vehicle gross profit per unit decreased $133$559 per unit to $3,002$2,872 per unit, due primarily to theincreased effectsprice ofcompetition tariffsresulting onfrom higher inventory availability and higher inventory invoice cost and lower consumer demand as a result of pre-tariff demand in the first quarter of 2025, which combined to drive lower retail new vehicle gross profit per unit for the three months ended March 31, 2026.costs.

The following tabletables providesprovide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for retail used vehicles:

Same Store Franchised Dealerships Segment Retail Used Vehicles – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Retail used vehicle revenue increased approximately $13.7$62.9 million, or 2%,9%, driven primarily by a 3%7% increase in retail used vehicle unit sales volume.volume and an increase in revenue per unit of 2%. Retail used vehicle gross profit decreased approximately $0.2$3.0 million, or 1%,8%, driven primarily by a 4%13% decrease in retail used vehicle gross profit per unit, partially offset by a 3%7% increase in retail used vehicle unit sales volume.

The following tabletables providesprovide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for wholesale vehicles:

Same Store Franchised Dealerships Segment Wholesale Vehicles – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Wholesale vehicle revenue decreased approximately $12.2$14.7 million, or 23%,26%, driven primarily by a 24%19% decrease in wholesale vehicle unit sales volume.volume and a 9% decrease in revenue per unit. Wholesale vehicle gross loss worsened by approximately $1.0$2.0 million, driven primarily by a $239 per unit$456 worsening inof wholesale vehicle gross loss per unit.

The following tabletables providesprovide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for Fixed Operations:

Same Store Franchised Dealerships Segment Fixed Operations – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Fixed Operations revenue increased approximately $21.3$13.1 million, or 5%,3%, and Fixed Operations gross profit increased approximately $12.6$5.5 million, or 5%.2%. Customer pay revenue increased approximately $12.3$7.2 million, or 6%,3%, and customer pay gross profit increased approximately $6.0$1.8 million, or 5%.1%. Warranty revenue increased approximately $4.9$2.0 million, or 6%,2%, and warranty gross profit increased approximately $3.6$1.7 million, or 7%.3%. Wholesale parts revenue increased approximately $1.7$2.3 million, or 4%,5%, and wholesale parts gross profit remainedincreased flat.approximately $0.2 million, or 3%. Internal, sublet and other revenue increased approximately $2.4$1.6 million, or 2.0%,1%, and internal, sublet and other gross profit increased approximately $3.0$1.8 million, or 5%.3%. Our Fixed Operations business has benefited from a higher level of vehicle recalls and warranty repairs, as well as additional technician headcount that has driven an increase in customer pay service capacity.

The following tabletables providesprovide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for F&I:

Same Store Franchised Dealerships Segment F&I – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

F&I revenue increaseddecreased $2.3$1.7 million, or 2%,1%, primarily due to a 6%4% increasedecrease in F&I gross profit per retail unit, partially offset by a 4%3% decreaseincrease in total combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit increaseddecreased $146$108 per unit, to $2,594$2,619 per unit, primarily due to higherlower penetration rates for other aftermarket product contracts, which was partially offset by a higher penetration rate for finance and service contracts, higher gross profit per contract for finance, service and aftermarket product contracts,contract, and changes to our F&I product cost structure.

Finance contract revenue for combined retail new and used vehicles increased 1%,5%, due primarily to a 2805% increase in finance contract volume and a 130 basis point increase in finance contract penetration rate and a 2% increase in gross profit per finance contract.rate. Service contract revenue for combined retail new and used vehicles increased 2%,8%, due primarily to a 160 basis point increase in penetration rate and a 2%7% increase in gross profit per service contract,contract and a 1% increase in service contract volume, partially offset by aan 1%80 basis point decrease in service contract volume.penetration Otherrate. aftermarketAftermarket contractproduct revenue for combined retail new and used vehicles decreased 6%,10%, due primarily to a 7% decrease in aftermarket contract volume and a 5402,730 basis point decrease in aftermarket product penetration rate, partially offset by a 2%6% increase in gross profit per other aftermarket product contract.

The following tabletables providesprovide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for retail used vehicles:

The following tabletables providesprovide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for F&I:

Same Market EchoPark Segment Retail Used Vehicles and F&I – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Retail used vehicle revenue increased approximately $18.1$71.5 million, or 4%,17%, due primarily to a 3%17% increase in retail used vehicle unit sales volume, pairedpartially withoffset by a 1%$74 increasedecrease in retail used vehicle revenue per unit. Combined retail used vehicle gross profit and F&I revenue increased approximately $3.5$1.6 million, or 5%,3%, due primarily to a 3%the increase in retail used vehicle unit sales volume, alongoffset withpartially by a 3%12% increasedecrease in combined retail used vehicle and F&I gross profit per unit. The increasedecrease in combined retail used vehicle and F&I gross profit per unit was due primarily to higherlower F&I penetration rates,rates and lower retail used vehicle gross profit per unit, offset partially by changes to our F&I product cost structure, an improvementimprovements in inventory acquisition costs as a result of sourcing a higher percentage of inventory from non-auction sources, and expanding our inventory to include older vehicles, which typically earn a higher gross profit per unit.

The following tabletables providesprovide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for wholesale vehicles:

Same Market EchoPark Segment Wholesale Vehicles – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Wholesale vehicle revenue increased approximately $0.1$0.4 millionmillion, or 2%, due primarily to a 1%12% increase in wholesale vehicle unit sales volume, offset partially by a 9% decrease in wholesale vehicle revenue per unit, offset partially by a 1% decrease in wholesale vehicle unit sales volume.unit. As we adjust the inventory mix of nearly newnearly-new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.

The following tabletables providesprovide a reconciliation of Powersports Segment reported basis and same store basis for retail new vehicles:

Same Store Powersports Segment Retail New Vehicles – Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025