AutoNation AN Q4 2025 Earnings Call Transcript

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Friday, Feb. 6, 2026 astatine 9 a.m. ET

• Chief Executive Officer — Mike Manley

• Chief Financial Officer — Tom Szlosek

Mike Manley: Yeah. Thank you, Derek. Good morning, everybody, and convey you for joining america today. I'm connected the 3rd slide. We're pleased to study a coagulated 4th fourth and afloat twelvemonth results for AutoNation. During a turbulent year, we delivered 3% gross maturation and 8% adjusted nett income maturation and 4 consecutive quarters of year-over-year EPS maturation yet starring to an summation successful adjusted net per stock of 16%, fractional of which went to stock repurchases.

Adjusted escaped currency travel exceeded $1 billion, up astir 39% from 2025, and we deployed implicit $1.5 cardinal successful capital, which resulted successful a 10% simplification of the shares successful circulation with the remainder invested successful the business, including $460 cardinal successful M&A to get immoderate beardown marque assets. Our equilibrium expanse remains highly steadfast with year-end leverage mostly unchanged from the anterior year. 2025 was the archetypal twelvemonth that AutoNation delivered net and EPS maturation since 2022. And arsenic I said, it was a coagulated twelvemonth of maturation and show by the group.

Relative to the 4th quarter, the manufacture faced tougher income comparisons to past year, erstwhile post-election income surged, driving a Q4 2024 airy conveyance SAAR of 16.7 million. Also, income successful this year's 4th fourth were negatively impacted by the beardown propulsion up earlier successful the twelvemonth arsenic consumers reacted to the tariff announcements and purchased vehicles anterior to the expiration of authorities incentives for electric-related powertrains. We felt these impacts crossed astir brands with the biggest interaction successful premium luxury. In the 4th quarter, our same-store portion income of caller vehicles decreased by 10%, including declines of 60% successful artillery electrical vehicles and 10% successful hybrid powertrain vehicles.

For the year, however, our caller portion maturation was 2%, mostly successful enactment with the wide industry. With respect to caller portion profitability, we delivered a sequential summation from Q3 to Q4, ended up astir $2,400 per unit. In the 4th quarter, we improved our used-to-new ratio from a twelvemonth agone arsenic utilized income tracked much favorably than new. Although utilized portion income decreased 5% from 2024 connected a same-store basis, with maturation successful units higher successful the $40,000 terms constituent much than offset by declines successful little terms utilized portion income accrued by 1%.

Used selling prices held up good successful 2025 crossed each terms bands, the afloat year, our gross nett accrued 5% reflecting improved gross nett connected the retail broadside and beardown results successful utilized conveyance wholesale. Retail profitability per portion for the twelvemonth was successful enactment with 2024, but modestly little successful the 4th quarter. Reflecting a tightening proviso market. Notwithstanding this, our squad continued to show beardown show successful acquiring vehicles done trade-ins and straight from the user done our We Buy Your Car efforts, with much than 90% of our sourcing of vehicles done interior channels. And naturally, we're focused connected continuing this subject but besides improving our acquisition and income portion pricing subject and rhythm times.