Group 1 Automotive, Inc.

Good morning, ladies and gentlemen. Welcome to Group 1 Automotive's third quarter 2025 financial results conference call. Please be advised that this call is being recorded. At this time, I'd like to turn the call over to Mr. Pete DeLongshaw, Group 1's Senior Vice President, Manufacturer Relations and Financial Services. Please go ahead, Mr. DeLongshaw.

Thank you, Jamie. Good morning, everyone, and welcome to today's call. The earnings release we issued this morning and a related slide presentation that include reconciliations related to the adjusted results we will refer to on this call for comparison purposes have been posted to Group 1's website. Before we begin, I'd like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the conference call, statements made by management of Group 1 Automotive are forward-looking statements. that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve both known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, inventory supply, conditions of market, successful integrations of acquisitions and adverse developments in the global economy and resulting impacts on demand for new and used vehicles and related services. Those and other risks are described in the company's filings with the Securities and Exchange Commission. In addition, certain non-GAAP financial measures, as defined under SEC rules, may be discussed on this call. As required by applicable SEC rules, the company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website. Participating with me on today's call, Darrell Kenningham, our President and Chief Executive Officer, and Daniel McHenry, Senior Vice President and Chief Financial Officer. I'd now like to hand the call over to Darrell.

Good morning, everyone. Let me start with a few highlights from the quarter before discussing our regional performance Group 1 delivered an all-time record quarterly revenues driven by record results in parts of service and used vehicles, along with another quarter of very strong F&I performance in both the U.S. and the U.K. New vehicle PRU gross profit performance was solid, and customer pay in both markets performed well, supported by healthy repair order growth. We've maintained cost discipline in the U.S. with good SG&A leverage, less than 66 percent on an as-reported and same-store basis. Now, turning to our U.K. operation, the U.K. environment remains challenging with inflation, wage and insurance cost pressures, and the BEV mandate, which continues to compress margins. While the broader SAR improved slightly in the quarter, much of that growth was fleet-driven. and retail conditions remain soft. New, lower-cost entrants are seeing increasing market share performance with cost-conscious consumers. However, this is not yet a significant factor in our business, given our luxury-leaning portfolio. Despite these headwinds, there are some bright spots in our UK business. Our after-sales business continues to expand with healthy customer pay operations. we are applying our US after sales playbook across our UK dealerships. For example, in the UK, our stores now welcome walk-in customers, which we had previously limited. And we have fully reopened shop schedules, cutting appointment wait times from nearly two weeks to just a few days. And we're extremely pleased with the progress we're making in reshaping our UK after sales business. New vehicle margins in the quarter remained steady year over year. Our used vehicle volumes in the UK were up nearly 4%. Our UK used vehicle teams have been successful exercising discipline in our aging and reconditioning process. F&I also delivered an excellent quarter, with same-store PRU up $155, or greater than 16% year over year. Our team is focused on improving product penetration, which has resulted in same-store financing penetration increasing by over 4%. We're continuing to strengthen our business with initiatives to offset our cost increase. Since the acquisition of Ingecape, we've implemented a series of headcount reductions, systems integration activities, and selective franchise closures and divestitures to improve operational efficiency and to better align our cost structure with current market conditions. Our headcount reductions have included approximately 700 positions across the UK, and our responsible portfolio management has resulted in the closure of four dealerships and the termination of eight franchises. We're making meaningful progress on systems integration. Across our UK business, we've completed the consolidation of 11 DMS platforms, and we're rolling out a new business intelligence system now. We are also completing the final stages of our US-UK systems integration review, spanning approximately 90 different systems company-wide. These actions are improving visibility, operational consistency, and data-led decisions across the organization. In the third quarter, we formally notified Jaguar Land Rover of our decision to exit this brand in the UK within 24 months. We feel our efforts and some of our real estate can be more effectively utilized elsewhere. We are collaborating closely with our OEM partners at JLR to achieve a positive outcome for them and for Group 1 shareholders. It's our intention that this achieves a positive result for all concerned. Due to this decision, our UK portfolio was required to be tested for impairments. As a result, we took a $123.9 million asset impairment in the quarter. Also important to note, this decision was unrelated to the JLR cyber attack, which separately impacted our UK profitability by approximately 3 million pounds during the quarter. Those actions reflect our commitment to optimize our portfolio, control costs, and focus our resources on winning through operational excellence. We will continue to refine the UK business, managing our headcount, right-sizing our network, and prioritizing after-sales and F&I, while leaning into our luxury platform and geographic diversity. This will position our UK business for long-term success. Now turning to our UK operations. our US teams continue to execute very well, maintaining operational discipline and customer focus across our dealerships. As a result, the business delivered another solid quarter of growth with healthy performance across all major lines. Demand remained consistent throughout the quarter, supported by balanced inventory levels and steady consumer interest, which we believe to be relatively healthy in the US. Our used vehicle units sold nearly set a record only 40 units off of our all-time quarterly volume record. Our same-store sales and used vehicle outpaced the industry. F&I was outstanding once again with an all-time quarterly high PRU of nearly $2,500, combined with an impressive 77% new vehicle finance penetration. After sales achieved record quarterly revenue and gross profit, underscoring the strength and stability of this high margin business. Our investment in our after sales operation continues to capture growth and our initiatives around flexible scheduling, all-day Saturday operations, and technician productivity continue to create new capacity and improve retention across our U.S. stores. Same-store technician headcount increased by over 4% due to our recruitment and retention efforts. On a same-store basis, our customer pay revenue increased nearly 8%. Warranty was up 16% versus a prior year comp that saw 20% growth. We continue to believe in the potential of our after-sales business, and we also believe that capacity and productivity are the keys to success. The overall US environment remains dynamic with ongoing policy and trade uncertainty. We're maintaining a cautious but confident stance, balancing discipline and spending with targeted investment where we see long-term return. Our operational excellence is a key advantage, giving us the ability to adjust quickly to changing conditions. Now a word about our capital allocation. In August, we added Mercedes-Benz of Beckhead in Atlanta, Georgia, to our portfolio. It's expected to be one of the best-performing stores in the U.S. for Group 1. It's positioned in a growing market and consistent with our cluster strategy and our disciplined focus on pursuing only those opportunities that will create long-term shareholder value. Just as importantly, we continue to opportunistically buy back shares of our companies. Since the beginning of 2022, we've repurchased nearly one-third of the company's outstanding common shares. The acquisition landscape has been fairly quiet in recent months. We continue to engage in researching opportunities in the U.S., but we are holding on further U.K. acquisition investment. We expect consolidation to continue in the future in both markets, and we believe we're well positioned with our OEM partners to capitalize on those kind of opportunities. Now I'll turn the call over to our CFO, Daniel McHenry, for an operating and financial overview.