Asbury Automotive Group Inc

Greetings and welcome to the Asbury Automotive Group fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Chris Reeves, Vice President of Finance and Treasurer. Please go ahead.

Thanks, Operator, and good morning. Good morning. As noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's fourth quarter 2025 earnings call. The press release detailing Asbury's fourth quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Holt, our President and Chief Executive Officer, Dan Clara, our Chief Operations Officer, and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open the call up for questions and be available later for any follow-up questions. Before we begin, we must remind you that the discussion during the call today is likely to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature, which may include financial projections, forecasts, and current expectations, each of which are subject to significant uncertainties. For information regarding certain of the risks that may cause actual results to differ materially from these statements, please see our filings with the SEC from time to time, including our upcoming Form 10-K for the year ended December 31, 2025, any subsequently filed quarterly reports on Form 10-Q, and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures, as defined under SEC rules, may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. Comparisons will be made on a year-over-year basis unless we indicate otherwise. We have also posted an updated investor relations presentation on our website, investors.asburyauto.com, highlighting our fourth quarter results. It is now my pleasure to hand the call over to our CEO, David Holt. David?

Thank you, Chris, and good morning, everyone. Welcome to our fourth quarter earnings call. As I said in our earnings release, 2025 was a productive year for Asbury. We grew the size of our business both in terms of revenue and in the geographic areas of the country in which we operate, acquiring $2.9 billion in revenue. More importantly, the composition of our portfolio continued to improve through strategic divestitures. Because of the discipline in running our business, we were ahead of where we thought we would be from a leverage perspective at 3.2 times versus our forecast of 3.5 times. We deployed 186 million in CapEx and continued our share repurchase efforts, buying back 50 million in shares for the quarter and 100 million for the full year. We transitioned 15 additional stores onto Techion during the quarter, ending the year with 38 stores operating on our new BMS. Managing our portfolio and allocating capital to areas that generate the greatest returns for the business and our shareholders has long been a core pillar of Asbury's strategic plan, and I am proud of the team's efforts to both grow the company and maintain our focus on expense control. Moving into 2026, we are confident these collective investments and the strength of our team position us to win, delivering value to our guests and returns to our shareholders. Next, I'd like to highlight some same-store operating metrics for the quarter. New vehicle sales volume were a reflection of prior-year post-election surge. PVRs on new vehicles continued to normalize, and we reiterate our view that new vehicle profitability will eventually stabilize in the $2,500 to $3,000 range. In used vehicles, we are beginning to see the results of our efforts to improve our performance, and while volumes continue to reflect a supply-constrained environment, gross profit rose 6% year-over-year, with used vehicle retail PVRs up 18%. On the ground, we noticed a pullback in consumer spending in parts and service. However, we are optimistic about the outlook and positioning of our fixed operations business. Later in the call, Dan will provide additional details on our operational performance. Our same store adjusted SG&A as a percentage of gross profit was up 162 basis points versus prior year. reflecting the impact of lower new vehicle profitability. We remain committed to operating our business in the most efficient way possible and will continue to adjust our cost structure as business conditions change. Moving to capital allocation, we divested four stores in the quarter and are on track to divest another nine stores by the end of the first quarter. These 13 transactions collectively representing $750 million of annualized revenue are at attractive multiples and will further accelerate our path to reducing our leverage, giving us additional flexibility to pursue share repurchases. We expect to continue our repurchasing activity in 2026, the pace of which will be dictated by our share price, leverage profile, economic conditions, and tradeoffs with strategic tuck-in acquisition opportunities. And now for our consolidated results for the fourth quarter. We generated a fourth-quarter record of $4.7 billion in revenue, had a gross profit of $793 million, also a fourth-quarter record, a gross profit margin of 17 percent, and expansion of 31 basis points. we delivered an adjusted operating margin of 5.4%, and our adjusted earnings per share was $6.67. Our adjusted EBITDA was $250 million. I'm proud of what the team accomplished in 2025, and with the foundational investments we've made in our business, I'm excited about the path ahead for 2026. Now Dan will discuss our operational performance in more detail. Dan?