Operator: Greetings, and welcome to the Asbury Automotive Group Fourth Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press 0 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.

Chris Reeves: Thanks, operator, and 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 Hult, 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-Ks for the year ended 12/31/2025, 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 Hult. David?

David Hult: 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 Automotive Group, Inc. 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 Techeon during the quarter, ending the year with 38 stores operating on our new DMS. 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 was a reflection of the prior year post-election surge.

PVRs on new vehicles continue 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 the 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 the 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 trade-offs 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, at a gross profit of $793 million, also a fourth-quarter record. A gross profit margin of 17%, an 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?

Dan Clara: Thank you, David, and good morning, everyone. I would like to start off with a thank you to the team for the positive momentum going into this year as we undertook a number of growth objectives in 2025. Thank you. Looking back at the fourth quarter, we increased our same-store used gross profit thanks to our continued progress and execution by our team members. We also rolled out Techeon to an additional 15 stores during the quarter, and in January, added eight more stores, which brings our current count to 46, or more than 25% of our portfolio. And on an all-store basis, we can see the positive lift from the Chambers group in our new and used PVRs. And now, I’m going to provide some updates on our same-store performance, which includes dealerships and TCA, on a year-over-year basis unless stated otherwise.

Starting with new vehicles, same-store revenue year-over-year was down 6%, which followed the SAAR contraction of 5%. We faced a tough comparable from last year’s post-election surge and the pull-forward effect of demand earlier in the year. We did see some disruptions in our DC market as expected. New average gross profit per vehicle was $3,135, a slight decrease sequentially as import brand PVRs gave some ground but were offset by the seasonal strength in luxury. Across all brands, our same-store new day supply was 49 days at the end of December versus 58 days at the end of the third quarter. All three segments were at lower day supply versus the previous quarter, led by several luxury brands in the domestics. Through 2026, we will manage our business based on what we’re seeing in our markets and execute accordingly.

Turning to used vehicles, fourth-quarter total used gross profit was up 6% year-over-year. Used retail gross profit per unit was up 18% at $1,749, a $271 increase over the prior year and a $198 increase over our reported third quarter 2025 number. Our same-store used DSI was 35 days at the end of the quarter, in line with our DSI at the end of the third quarter. Shifting to F&I, we earned an F&I PVR of $2,335. The noncash deferral impact of TCA was $105, so without the year-over-year impact, the PVR would have been $2,440. We plan to implement TCA to the chamber stores by year-end to complete our rollout across all platforms. And finally, in the fourth quarter, our total front-end yield per vehicle was $4,897, up $259 sequentially. Now moving to parts and service, our same-store parts and service gross profit was up 2% year-over-year.

When looking at our customer pay and warranty performance, customer pay gross profit was up 3% with warranty gross profit higher by 6%. We lapped tough double-digit comps in both customer pay and warranty, which in 2024 were up 13% and up 26%, respectively. For the quarter, we generated a gross profit margin of 58.1%, an expansion of 13 basis points. On an all-store basis, this was a record fourth quarter for our parts and service business as total revenue grew 12% to $658 million. We remain optimistic about the trends we see supporting the long tail of parts and service operations. The average age of the car on the road combined with the increasing complexity of technology and vehicles positions us to reap the benefits of this large addressable market.

We believe we’re well-positioned to unlock meaningful efficiencies as we navigate in our journey to becoming the most guest-centric automotive retailer, enabled by the hard work of our team members and continued investment in technology. Thank you. And with that, I will now hand the call over to Michael to discuss our financial performance. Michael?

Michael Welch: Thank you, Dan, and good morning to our team members, analysts, investors, and other participants on the call. For our financial performance in the fourth quarter, adjusted net income was $109 million. Adjusted EPS was $6.67 for the quarter. In addition, the noncash deferral headwind due to TCA this quarter was $0.31 per share. Our adjusted EPS would have been $6.98 without the deferral impact. Adjusted net income for the fourth quarter 2025 excludes net of tax, noncash asset impairments of $87 million, net gain on divestitures of $26 million, $5 million related to the Techeon implementation expenses, $3 million related to the noncash fixed asset write-offs, and $1 million professional fees related to the acquisition of Herb Chambers Automotive Group.

We divested four stores in the quarter, which generated an estimated annualized revenue of $150 million. Adjusted SG&A as a percentage of gross profit on a same-store basis came in at 4.1%. We feel confident in our ability to manage overall cost over the next few quarters as we progress the Techeon implementation across our stores and navigate normalizing new vehicle unit profitability. The adjusted tax rate for the quarter was 25.8%. We estimate the full year 2026 effective tax rate to be approximately 25.5%. TCA generated $12 million of pretax income in the fourth quarter. The negative noncash deferral impact for the quarter was $8 million. Our updated TCA slide in our presentation reflects the rollout to Chambers during 2026, the disposal of our held-for-sale assets, revised SAR estimates based on external forecasts.

Now moving back to our results, we generated $651 million of adjusted operating cash flow during 2025. Excluding real estate purchases, we spent $186 million in capital expenditures this year. The assets we sold and haven’t held for sale allow us to avoid some low-return CapEx, deploy cash for more strategic capital decisions. We anticipate approximately $250 million in CapEx spend for both 2026 and 2027. Adjusted free cash flow was $465 million for the year. We ended the year with $927 million of liquidity, comprised of floor plan offset accounts, availability on both our used line and revolving credit facility, and cash excluding the cash Total Care Auto. Our transaction-adjusted net leverage ratio was 3.2 times at the end of the year. Our results were better than expected from a leverage standpoint, which we believe gives us room to continue with our path of discipline, strategic capital decisioning.

And finally, before I finish our prepared remarks, on behalf of everyone, I want to thank our team members for their hard work in 2025. We look forward to 2026. With that, this concludes our prepared remarks. We will now turn the call over to the operator to take questions. Operator?

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Operator: Thank you. We’ll now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. Pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is from Jeff Licht with Stephens Inc.

Jeffrey Lick: Good morning, everyone. Thanks for taking the question. This is made for David and Daniel. You know, kinda pack a few questions into one. I guess if, you know, if you look at 2025 as your base year, obviously, it was, like, three or four years inside of that year. You know, as you now look at 2026 lapping tariffs, lapping the EV credit, you got lease returns. Potentially, maybe there’s you know, you guys have highlighted some more GPU normalization. If you can just kinda give us a little road map to, you know, how you see things playing out and maybe if you could give some granularity in terms of the first half and the second half, just kind of the qualitative path of travel, you know, what we should look for as the year progresses?

David Hult: Thanks, Jeff. This is David. I’ll start. And Dan can jump in if he wants. I think we’re forecasting to go slightly backwards in STAR. But STAR is an overall number that includes, you know, fleet and wholesale. And I think it’s gonna vary by brands. We have a lot of Stellantis stores that were, you know, a percentage of our business that were challenging for us in 2025. All brands are cyclical, and we believe Stellantis will come back. So hopefully, that’ll turn into a tailwind for us in 2026. You know, we have over 50 stores now in the Northeast. January has been ridiculously tough with weather. So it’s been a challenge starting off the year. And we’ve even had challenging weather in the Southeast as well. I would say the first half will probably be a little bit more of a struggle, and the second half should start to free up a little bit.

I don’t know that the tariffs have fully settled across all brands. There’s still movement on pricing, and it’s yet to be known what incentives will look like in the future. We’re optimistic about our parts and service business and where that’s headed. We’ve had a lot of distractions in ’25 between, you know, the acquisition and rolling out Techeon. Now having a third of the company on Techeon and the rest of the company being rolled out by the fall, we think that’s gonna really bode well for us. Not only from a cost perspective but an efficiency perspective going into ’27. We will have some headwind in ’26, paying for both DMS’s. And as you can imagine, when you transition a store into a new DMS, other than the excessive cost for a period of time, is the transition getting everyone comfortable to software and efficient on it.

So I think all this blocking and tackling and the heavy lifting we’re doing is gonna pay dividends going into the future. For us, we probably got, you know, five, six, seven months of bumpiness in distraction of going through all of it. But we know the outcome will be very beneficial for Asbury Automotive Group, Inc.

Jeffrey Lick: Yeah. Then maybe just a quick idea. You. Go ahead. Go ahead, Jeff. Sorry. No. Go ahead. No. I was just gonna add to David’s comments on the when you think about from a used car standpoint, what we’re expecting in the second half with lease earnings coming in. You can see the results of our renewed strategy and execution by the team. So we are very confident that it is working. And that has paved the way for a lack of a better term. It went down and puts up inventory coming in that we can pull that lever and execute accordingly while still remaining disciplined. To maximizing the gross profit per unit.

Jeffrey Lick: And then just a quick follow-up, I mean, because your GPUs are still, you know, north of that. 2,500 to 3,000 kinda settling range you’ve talked about. I guess, where do you see, you know, let’s say, you get to the middle of that range, twenty-seven fifty. Where does that come from? How does that decline in GPU manifest itself? Is that in more inventory you’ll finally get in 3,000,000 units on the ground? Is that because Toyota gives a little back? I’m just curious, you know, what because you guys have been pretty steadfast to that 2,500 to 3,000 mark. I’m just curious where do you see that further adjustment to come.

David Hult: It’s a great question, Jeff. You know, I think as long as the inventory stays somewhat balanced the way they are, we kinda look at our brand mix. In the way the incentives have been tracking. With the divestitures we’ve had, and the several that are coming, you know, our percentage of luxury goes up. You know, from 32 to probably about 36%. Which benefits us overall. You know, I would say if the SAR was gonna stretch and the inventories were gonna grow, that puts the most pressure on margins. But where most OEMs are predicting a flat or a little bit backwards year, we don’t anticipate sitting on a high day supply. Now the winter months, you tend to sit on a high day supply because you’re coming off a busy fourth quarter, and things slow down.

But that should normalize over the next quarter or two. I think we’re conservative in our approach. When we give estimates of 25 to 3,000 based upon our brand mix. But it’s also difficult to predict the future. I think the biggest thing that’s gonna govern the volume this year is what we’ve all been talking about. The high cost of sale. You know, for new, we’re over $52,000 in the quarter. And, you know, that’s a stretch. So when people are stretching into purchasing, it tends to put pressure on margins as well try and consummate the deal. And I don’t know if you have anything you wanna add.

Dan Clara: No. To add. Thanks.

Jeffrey Lick: Well, thank you for taking my question, and best of luck in 2026.

David Hult: Thank you, Jeff.

Operator: Our next question is from Rajat Gupta with JPMorgan.

Rajat Gupta: Hey. Thanks for taking the question. Yeah. You know, I just wanted to follow-up on parts and service. You know, the customer pay growth was a little weaker than we would have expected. I understand the warranty comps. I know you mentioned, like, it had a tough comp, but I also felt ’24 had some easy comparison ’23 because of the DMS transition. So I’m curious if the customer paid number is satisfactory to you. I mean, is there more opportunity there? Any sense you can give us around the outlook for ’26? I have a quick follow-up. Thanks.

Dan Clara: Yeah. Good morning, Rajat. This is Dan. No. We’re not satisfied with the customer pay growth. We just as it is with used cars, have a renewed strategy in fixed operations. That we feel very confident in executing. There when you look at the age of the car on the road, and then you look at all the technology enhancement that is coming with the new product, we know and we’re ready to take advantage of that part of the market. So our forecast remains the same as it’s been in the mid-single digits in customer pay like we have been talking about over the last few quarters.

David Hult: Rajat, this is David. I would add in previous quarters, and I think it’s the case for our peers, but I’m not confident, you know, the growth in parts and service has been more top-heavy on dollars than actual cars coming through the service driver repair orders. Right. And I made the comment in my remarks. The traffic counts were okay and normal for us. And based upon that, we should have been higher on the dollars. We saw fewer dollars being spent per the consumer. So it wasn’t so much the traffic that took a hit as much as it did the consumers were willing to spend. And as you can see, because I think we have it in our IR deck, you know, when we talk about, you know, how much we’re generating per ticket, you know, combustible engine is over $550.

You know, these numbers keep going up, which is great. But it also puts a limit a little bit on customers. But I was shocked to see the pullback in October, November with the dollars being spent. It rebounded in December, and January starting off, the dollars are pretty good again. So I can’t explain what happened in October and November. The biggest headwind we have in January is the traffic because of all the weather.

Rajat Gupta: Got it. Any preview, you know, on the renewed strategy for parking services that you can give us? Going forward?

David Hult: You know what? I would tell you, Rajat, the biggest thing is there’s a massive difference between our current DMS and Techeon. And there’s a learning curve there. And, you know, our original stores that went on a year ago are performing better than most of our stores in our company because of the efficiencies and benefits of the software. But when these stores transition to the new software and, you know, now we’re up to over 40 stores, it takes them a few months. We actually become less efficient for the first couple of months as they’re trying to get used to the software and work out the kinks. So we’ll finish the Techeon rollout late in the fall. I look at twenty-seven as a really efficient, productive year for us that you’ll notice in both our production with Techeon, but our cost control with Techeon as well.

Rajat Gupta: Understood. Understood. That’s helpful. And maybe just follow-up question, you know, maybe for Mike around the leverage. Good to see the progress there. I believe we do have a few more divestitures in the pipeline that you’re looking to execute. You know, any update on that? And, you know, how soon can you get below three times? Is it earlier than ’26? You know, any timeline around that would be helpful. And then just related to that, how should we think about, you know, free cash flow deployment, priorities as well? ’26. Thanks.

Michael Welch: Yeah. So from a, you know, talked about the nine divestitures that we have out there that will close in the first quarter. And that will free up some cash to get our leverage down. So more. So we think, you know, kind of, summer will be below three times. The only caveat to that would be, you know, with where our share price is, we think there’s some to, you know, deploy some cash for share buybacks. So our goal is still to get below three times by the end of the year. And if we can do that and buy some shares back along the way, we’ll kind of balance that as we go. Throughout the year. But if we just took the cash from the disposals, and the free cash flow and put that toward the leverage, we’d be able to get there by the summer of this year.

Rajat Gupta: Understood. Great. Thanks for all the color, good luck, and, you know, best of luck. David, Dan.

David Hult: Thanks. Thank you, Rajat.

Operator: Next question is from Glenn Chin with Seaport Research Partners.

Glenn Chin: Good morning. Thanks, folks. Can you just clarify for us the path forward for Techeon? How many more stores do you have to transition? It sounds like it’ll be done by fall of this year. And then to what extent you will incur these double expenses for running two DMSs simultaneously.

Dan Clara: Good morning, Glenn. This is Dan. So we have 125 more stores to roll out. We have eight more going out being rolled out this weekend and then another eight following the following week. But, you know, like David stated, will be done by the third quarter of this year. As far as the expense, I’ll let Michael give clarity on that.

Michael Welch: Yeah. So once we, you know, roll out a store, you have to kinda, you know, you can’t cancel it right away. You have to kinda roll it out, make sure everything’s working, all the data comes across, and then we can go cancel the other products. So there’s a couple of months of duplicated cost. And then when we roll it out, so the first half of this year, you’ll see kind of a hit on SG&A for this duplicated cost plus the implementation fees. By the time we get to kinda midyear, we’ll roll over and the savings from Techeon will more than offset the duplicated cost. So it’s, you know, I’ll call it a front-half hit to SG&A and then a back-half benefit of the SG&A. Then to David’s point, we get to twenty-seven. The efficiency that we’re gonna see from it, you’ll start seeing those as well. So it’s, you know, that’s kind of paces. Duplicate cost first half, of savings from the software in the second half, and then those will come in during 2027.

Glenn Chin: Okay. But, Michael, to clarify it, looks like you adjusted it out for that the dual expense. You adjusted it out this quarter. I guess we only adjust out the we only adjust out the implementation cost, the cost of having to pay to do the implementations. And then also in third and ’25, because of the SOX requirements from internal controls, around the Techeon software, we had a pretty heavy lift on just, you know, call it auditors and all those types of, you know, IT folks. Third parties to help us get over the hump with the initial year of SOX compliance on Techeon. So those Techeon costs are heavy, heavy SOX control. And then the implementation cost. We have not been adjusting out the dupe, you know, duplicated cost of the software.

Glenn Chin: Okay. So it sounds like we should expect it to hit even adjusted numbers in the first half. And can you quantify for us how much that might be?

Michael Welch: We have not quantified that number, but we can we’ll work on that for the first quarter to give you guys an insight in the first quarter. It wasn’t that material for the fourth quarter because we didn’t roll out a ton of stores. We only rolled them out at the very December. But in the first quarter, we’ll kinda give you how much that, you know, how much of an impact that was.

Glenn Chin: Okay. Yeah. That would be helpful. Thank you. Okay. And, David, will you be on future earnings calls?

David Hult: You know, I think I’ll be on the next earnings call, and that’ll probably be it for me.

Glenn Chin: Okay. Very good. Well, hope you’re doing well there.

David Hult: I appreciate it. Thank you.

Glenn Chin: Alright. That’s it for me. Thank you.

Operator: As a reminder, if you’d like to ask a question, please press 1 on your telephone. Our next question is from John Babcock with Barclays.

John Babcock: Thanks for taking my question. I do want to ask, I know it’s still early in the Techeon rollout here, but with some of the first stores that were put on the system, are you starting to see benefits or is it still too early to tell? Yep.

Dan Clara: Good morning, John. This is Dan. Yeah. We had the first four stores where we rolled it out, they were here in Atlanta. And we are seeing the benefits. From an efficiency standpoint, a productivity standpoint, from a guest experience standpoint, and then, you know, you can also see the flexibility that it gives us because it is a cloud-based DMS when you’re talking about enhancing technology and AI conjunction with our internal development team, you get rid of all the bolt-ons, and it’s a lot easier to enhance the technology to improve the guest experience and efficiencies across the store. Yes, we are John one? I’m sorry, Dan. John, one thing I would add. You know, every store we roll out, technicians don’t like change.

They hate the new software. It’s a lot of key changes. And it’s difficult. But if you went back to the original four stores, they would tell you they wouldn’t work at a store that didn’t have Techeon. So it makes the employees more productive, increases the transparency between departments, and it also increases the transparency with consumers, which you can visually share with them. So there’s a lot of benefits. There’s cost savings for sure, but there’s productivity benefits as well. You know, human behavior takes a little while to change and get used to new software, a new language, for lack of a better term. But the early adopting stores that we have are really running efficiently well on it. Costs are lower. Productivity is up. Which is everything we anticipated.

John Babcock: Okay. Thanks. And then just next question. I was wondering if you could talk about how, you know, just broadly how the demand environment feels right now, both for new and used, if there’s any discrepancy between the two. Just generally wanna get a sense for what you’re hearing from the dealership.

Dan Clara: Yep. John, I’ll start and David can add if he wants to. I’ll tell you, you know, for January, January was good until we got hit by the weather. And so that, you know, that pullback that we saw in October, November was not there the first few weeks in January. But after the weather hit us, it impacted us pretty big because, you know, that storm came in through Texas and they basically just follow our path of where we have stored all the way to the Northeast.

John Babcock: Okay. Thanks for the color. That’s all I have.

Dan Clara: Thank you.

Operator: Our next question is from Ryan Sigdahl with Craig.

Matthew Rob: Hey, great. Thanks. This is Matthew Rob on for Ryan. Just quick on TCA, it looks like the SAAR assumptions were changed very slightly in ‘twenty-six and ‘twenty-seven, and the noncash deferral was, you know, raised a little bit in, you know, through 2029. Just what drove that change and, just talk about where TCA stands today. Any color there would be great.

Michael Welch: Yeah. So on that one, we just looked at the, you know, third-party kind of different, you know, your guys’ assessments and those other third-party providers out there for their SAR projections. And, you know, most of the people were coming up, you know, fifteen eight, kind of sixteen two. And we originally had that forecast there based on those third parties at fifteen seven. So we just bumped it a little bit to fifteen nine to reflect kind of the additional color out there from the third parties. And also that, you know, that’s what we use to kind of base our budget off of, for 26 is that fifteen nine number. So small adjustment there just as kind of saw our projections, came up a little bit during the fourth quarter.

And the TCA, you know, we talked about it earlier in our comments. Our last platform to roll out is Herb Chambers. We’re gonna roll them out on Techeon, and then following the Techeon rollout, we’ll roll them out on TCA. So sometime this, you know, late summer probably. And that will complete the rollout to all the stores. And then, you know, we’ll be done with the kind of TCA rollout side of it.

Matthew Rob: Understood. Thank you very much.

Operator: Our next question is from Daniela Heigen with Morgan Stanley.

Daniela Heigen: So kind of on that point of adjusting SAAR forecast, we also saw the use. You you’ve made a comment about supply remains tight. How are what kind of assumptions are you baking in on affordability, what the consumer is facing this year, consumer credit availability, and how does that flow through into used? We definitely saw stronger used margin and then a bit weaker on the volume side. So how does that play out into ’26 in your view?

Dan Clara: Yeah. Daniela, look. Good morning. This is Dan. You know, we continue to stick to our strategy of not chasing volume and maximizing gross profit. There are several items that we have been executing on really limiting the number of acquisitions through the auction. And improving the number of cars that we take through the trades or that we purchase directly from our guests. And that is working well. That’s where you see how we’re maximizing the PVRs. And the impact that it had in the fourth quarter. There you know, the average cost of our used car being over $30,000 is definitely something that we’re focused to bring down because we know that the lower the cost of sale, the faster that inventory turns. As we and we believe that the opportunity to do that is gonna be in the second half of the year as lease turn-ins start to come in.

We have better availability of inventory flowing and then we can really pull the lever. If the availability of inventory is there, we can pull the lever of going after the volume while still maintaining our strict discipline on the gross profit per unit.

Daniela Heigen: Got it. Thank you. And then second is just on your EV outlook for the year. Obviously, a big deceleration following the removal of the tax credits. Do you believe inventory levels here are sufficiently right-sized, or is there more room for that to play out?

Dan Clara: I will tell you that overall company-wide, I would like I would say our EVs inventory is right-sized. There, we have pockets, specifically Colorado, where there was a high demand for EVs that we have a little bit more inventory than I would like to. But overall, it’s been right-sized. And, you know, in the ’24, our EV sales were, like, 5% of the total sales, and in the ’25, it was about 2%. So I would expect that to continue as we go into ’26.

Daniela Heigen: Thank you. Thank you. Thank you.

Operator: There are no further questions at this time. I would like to turn the floor back over to David Hult for any closing comments.

David Hult: Thank you. We appreciate everyone joining our fourth quarter earnings call. We look forward to speaking with you after the first quarter. Have a great day.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you again for your participation.

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ASBURY AUTOMOTIVE GROUP INC

Q4 2025

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