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CFO Jim Watkins confirmed that the new store waterfall continues to perform well, with stores opened in fiscal '21 showing higher average sales than those from '22, and so on, indicating strong maturation. CEO John Hazen described the summer concert season as decent, with more festivals than stadium tours. He highlighted a major sponsorship of the 'Sand In My Boots' festival with Morgan Wallen and noted the continued partnership with Riley Green and sponsorship of nearly 1,000 rodeos.

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CFO Mark Jenkins humorously noted the initial negative stock reaction was his biggest surprise given the record results. CEO Ernie Garcia agreed that Carvana is early in its adoption curve, distinguishing between brand "awareness" (high) and deeper "understanding" and "trust" (large opportunity for growth). He supported this by noting that even Carvana's most mature markets continue to grow at exciting rates, indicating a long runway ahead.

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CEO Ernie Garcia attributed the growth acceleration primarily to the successful build-up of inventory, which fuels the model's positive feedback loop of selection driving conversion. He positioned the retail marketplace as a substitute inventory source, not yet a primary growth driver. CFO Mark Jenkins acknowledged the fluctuation in ancillary GPU, stating it's an area with continued opportunity for fundamental gains.

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CEO Ernie Garcia stated that customer demographics remain very similar even as the company scales, emphasizing the large untapped market. CFO Mark Jenkins addressed the operations expense, noting that while it saw a minor sequential increase, it was down over $200 year-over-year, and the company sees further opportunities for reduction.

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CEO Peter Kelly explained that the 14% growth in auction fee revenue was driven by a successful, modest price increase in Canada and the flow-through effect of a U.S. price increase from Q4 2024. He clarified that the primary driver of the service revenue decline was the divestiture of the Automotive Keys business. The secondary factor was indeed lower commercial volumes reducing inspection and delivery services, which was partially offset by growth in dealer-related services.

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CEO Peter Kelly positioned OPENLANE as a high-quality, reasonably priced provider, noting a successful price increase in Canada contributed to the 14% growth in auction fee revenue. He clarified that the primary driver of the service revenue decline was the divestiture of the Automotive Keys business, with the secondary factor being lower service needs tied to reduced commercial off-lease volumes.

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EVP Rich Shearing detailed how Mercedes' BEV inventory reduction from over 40% to under 5% significantly boosted profitability. He also explained that a potential pre-buy of commercial trucks is contingent on a legislative review; if current emissions waivers are rescinded, the cost increases driving a pre-buy would be averted, which would be a positive outcome for the industry.

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SVP & CFO Michael Welch explained that potential tariff-related volume decreases would slow the TCA deferral impact in 2025, pushing it into future years. President & CEO David Hult added that the Tekion rollout is progressing well and is expected to generate material savings by eliminating numerous software application and integration fees, while also boosting employee productivity to lower personnel costs.

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President and CEO David Hult acknowledged the direct correlation between higher inventory and lower margins but noted that OEMs are currently showing more discipline than in the past. Regarding the 2025 outlook, Hult suggested investors may under-appreciate the sustained strong demand, the high average age of vehicles driving the high-margin service business, the future tailwind from an eventual Stellantis recovery, and the large cash flow benefit from TCA that will materialize in a few years.

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President Jeff Dyke disclosed that Q1 warranty work grew 40% while customer pay grew only 2-3%, a mix the company is actively working to rebalance. Regarding EchoPark, Dyke expressed confidence, stating the company is much better prepared for market shifts than during the COVID era, citing a higher mix of cars bought from the street. CEO David Smith added that EchoPark's strong brand reputation provides a competitive advantage.

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President Jeff Dyke attributed some Q4 new vehicle strength to pent-up BMW demand but saw no direct negative substitution effect on EchoPark. Regarding valuation, Dyke shared the analyst's sentiment, expressing confidence that the market will eventually recognize Sonic's high-level execution and strong performance. CEO David Smith added that the stock's limited float is a technical factor that also likely impacts its trading multiple.

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President and CEO Bryan DeBoer explained that the value auto segment is a key strength, noting these vehicles turn 2-4x faster than certified used cars, yielding a significantly better return on capital. He clarified that it primarily takes newly acquired stores about six months to fully adopt the practice of retailing these vehicles instead of wholesaling them, and this initiative is now gaining strong traction across the network.

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President and CEO Bryan DeBoer clarified the store count reduction was due to the previously announced divestiture of small U.K. stores. He reiterated that Aftersales margin variance depends on the parts vs. labor mix. COO Adam Chamberlain confirmed that 55% of used cars are sourced from trade-ins and that while quarterly SG&A benefits were realized, further savings from inventory and revenue growth are expected.

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CEO Bryan DeBoer framed stop sales as a net positive, as they defer revenue but create a massive backlog of high-margin aftersales work, citing major engine replacement programs. On new GPUs, he expressed pleasure that they are stabilizing above historical norms and noted a potential for a "soft landing" over the next few quarters as manufacturer incentives gradually return.

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CEO William Nash attributed the record sourcing to a 40% year-over-year increase in active dealers using the Max offer platform. He cited enhancements that made the tool easier to use, including a seamless transition between desktop and mobile and integration into dealer inventory management systems. He also noted that wholesale auction lanes have seen a recent pickup in bidding activity.

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CEO Mike Manley stated that capital allocation decisions are driven strictly by the highest potential return for shareholders. A large acquisition would require high confidence in its return on invested capital compared to other options like buybacks. He also noted that the M&A pricing environment is improving. CFO Tom Szlosek clarified that after a seasonal Q1 rise, SG&A as a percent of gross is expected to improve and finish 2025 below the full-year 2024 level.

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CEO Mike Manley provided an extensive outlook, stating that improving affordability from moderating MSRPs, falling rates, and rising incentives will boost retail sales. He believes this will benefit the used market without dramatically affecting used margins. He also noted the BEV/HEV inventory imbalance is impacting new margins. On leasing, he expects a natural increase back toward historical levels of 30% but does not foresee it causing a spike in late-model used car values due to shorter lease terms.

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CEO Daryl Kenningham explained there is significant opportunity in the U.K. by empowering store-level general managers, a shift from Inchcape's centralized model. He noted this transition is ongoing but showing progress. Executive Peter Delongchamps added that OEMs are generally bullish for the year and that Group 1's strong performance metrics ensure continued growth opportunities.

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CEO Daryl Kenningham and CFO Daniel McHenry explained that while Inchcape stores are slightly more luxury-focused, they are not materially different in overall size. Kenningham emphasized a significant opportunity to improve aftersales performance at the acquired stores. On stop sales, he noted that new car customers tend to wait, while used car buyers are less sticky. He remains optimistic about the business despite macro noise.

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