With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

World's Most Admired Companies

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This year’s Fortune 500 marks the 68th running of the list.

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This year’s Fortune 500 marks the 67th running of the list.

F500-2021-143-Penske

Penske Automotive Group runs truck dealerships—both automotive and commercial—throughout North America and Western Europe. In 2021, the company reported the highest first quarter revenue, income from continuing operations, and earnings per share in company history. In April, Penske announced that it had completed its acquisition of Kansas City Freightliner, a retailer of medium- and heavy-duty commercial trucks.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-136-Penske-Automotive-Group

A diversified transportation service company with multiple business segments, including new and used retail automotive, retail commercial truck dealerships, as well as distribution of commercial vehicle and power systems.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Penske Automotive Group is a transportation services company that operates automotive and commercial truck dealerships under franchise agreements with automotive manufacturers and distributors. The company also sells new and used vehicles; offers maintenance and repair services; and sells or places third-party finance and insurance products; third-party extended service and maintenance contracts; replacement and aftermarket automotive products; collision repair services; and wholesale parts. The company was founded in 1969 and is based in Bloomfield Hills, Mich.

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Penske Automotive Group (PAG): Company Profile, Stock Price, News, Rankings

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Penske Automotive Group

penske automotive group

Good afternoon. Welcome to the Penske Automotive Group First Quarter twenty twenty five Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through 05/07/2025, on the company's website under the Investors tab at www.penskeautomotive.com. I will now introduce Tony Porton, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, Julianne. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's first quarter twenty twenty five financial results was issued this morning and is posted on our website along with a presentation designed to assist you in understanding the company results. As always, I'm available by email or phone for any follow-up questions you may have. Joining me for today's call are Roger Penske, Chair and CEO Shelly Hulgrave, EVP and Chief Financial Officer Rich Sheering, North American Operations Randall Seymour, International Operations and Tony Piccione, Vice President and Corporate Controller.

Our discussion today may include forward looking statements about our operations, earnings potential, outlook, acquisitions, future events, growth plans, liquidity and assessment of business conditions. We may also discuss certain non GAAP financial measures as defined under SEC rules such as adjusted net earnings before taxes, adjusted net income, adjusted earnings per share, adjusted selling, general and administrative expenses, earnings before interest, taxes, depreciation and amortization or EBITDA and adjusted EBITDA and our leverage ratio. We've prominently presented the comparable GAAP measures and have reconciled the non GAAP measures to their most directly comparable GAAP measures in this morning's press release and investor presentation, both of which available on our website. Our future results may vary from our expectations because of risks and uncertainties outlined in today's press release under forward looking statements. I direct you to our SEC filings, including our Form 10 ks and previously filed Form 10 Qs for additional discussion of factors that could cause future results to differ materially from expectations.

Thank you, Tony. Good afternoon, everyone, and thank you for joining us today. I'm pleased with the results of our first quarter. Our diversified international transportation service business generated record first quarter revenue, the seventh consecutive quarter of stable gross margin and a 70 basis point improvement of adjusted selling, general and administrative expenses as a percentage of gross profit when compared to the first quarter of last year. During the quarter, revenue increased 2% to a record of 7,600,000,000.0 Same store retail automotive revenue also increased 2%, while related gross profit was up 3%.

Same store retail automotive service and parts revenue increased 4%, while related gross profit was up 6%. Service and parts gross margin increased 60 basis points to 58.6%. Our business generated three thirty seven million dollars in earnings before taxes, $244,000,000 in net income and earnings per share of $3.66 each which increased by 14%. On an adjusted basis, earnings before taxes increased 5% to $310,000,000 and net income increased 5% to $226,000,000 and our earnings per share increased 6% to $3.39 As we look at the automotive and commercial truck markets, the current environment remains very fluid. We believe the administration is encouraging companies and individual countries to come to the table to discuss their plans.

We remain in close contact with our OEM partners. Many OEMs have announced their intent to hold current prices while tariff negotiations continue and we believe most brands are evaluating their individual geographic footprint including production capacity, model mix, suppliers, vehicle content, among others. As we look to the future, the diversification of PAG will be a key differentiator. The diversification provided by a premium brand mix, our President and International Automotive markets, our retail commercial truck dealerships and our investment in Penske Transportation Solutions, coupled with our highly variable cost structure provide us with opportunities to flex our businesses to meet the changing landscape. Approximately 59% of our revenue is generated in North America, 30 1 Percent in The UK and 9% in other international markets.

Our profitability is also diversified with 64% of our earnings in 2024 coming from our automotive retail operations and 36% from our non automotive operations as we generate that profitability across multiple sources such as new, used, service and parts and finance and insurance. In fact, only 26% of our total gross profit in 2024 was generated from new vehicle sales. So now let's turn our attention to a few additional details of the first quarter results. During the first quarter, we delivered 120,000 new and used automotive units and over 4,700 commercial trucks. New automotive units delivered increased 68% on a same store basis.

Used automotive units declined 1611% on a same store basis. The decline is associated with the realignment of our UK used only dealerships to sit and select, which took place in the last half of twenty twenty four, we sold or closed four locations, realigned the cost base, changed the focus to retailing fewer units at higher margin. Excluding the performance of Sytner Select in both periods, used unit delivered only decreased 1% in total on a same store basis. Average new transaction price increased 4% to $59,202 while average used vehicle transaction price increased 12% to $37,624 New and used vehicle gross profit per unit retail remained strong. New vehicle gross was $5,059 down over $87 when compared to the fourth quarter of last year.

Used vehicle gross increased $352 per unit when compared to the fourth quarter of twenty twenty four, largely due to our efforts with Sytner Select and the overall improvement in used vehicle inventory management. Variable vehicle profit, which includes new used and F and I was $5,281 per unit, representing a $38 unit decline when compared to the fourth quarter of last year. In the quarter, service and parts revenue increased 6% to $789,000,000 including a 4% on a same store basis with customer pay up 1% and warranty up 17%. Warranty continues to be driven by recall activity across several brands. Fixed absorption in The U.

S. Automotive business increased three ten basis points to 87.1%. It was 117.5% for our North American retail commercial truck business. As we look to continue growing this important part of our business, we've increased our technician headcount by 5% since March of twenty twenty four, and the effective labor rate increased 5% in The US and 6% in The UK. Lastly, I remain pleased with our efforts to control costs.

On an adjusted basis, our SG and A to gross profit declined by 70 basis points to 70 when compared to the first quarter last year and declined by 30 basis points sequentially when compared to the fourth quarter of twenty twenty four. Now let me turn the call over to Rich Schering to discuss our North American operations.

and good afternoon, everyone. In our retail U. S. Retail automotive operations, we experienced a rise in traffic, especially near the March. For the quarter, U.

S. New units increased 8%, while used units increased 2%. During the quarter, 29% of the new units sold in The U. S. Were at MSRP.

Leasing in The U. S. Increased to 33% on new vehicles retailed, up from 32% in Q1 last year, and leasing on our premium brands is in the mid-forty percent range compared to the mid-fifty percent in 2019 prior to COVID. We sold 2,800 new BEV vehicles in The U. S.

During the quarter, representing approximately 8.5% of new vehicle sales. Our U. S. Days supply for BEV is vastly improved at fifty six days compared to seventy six days at the December and eighty seven days in March. Although we have done a great job working with our OEM partners to manage that inventory to be more closely aligned with consumer demand, the majority of BEV units still require significant discounting.

The average discount on BEV from MSRP was over $7,400 during Q1 compared to $6,300 Q1 last year. In our automotive business, service and parts same store revenue increased 6% during Q1 and same store gross profit increased 8%. Turning to our retail commercial truck business, we operate 45 locations and remain one of the largest commercial truck retailers for Diamond Trucks North America. The retail truck business is one of the core pillars of our diversified model and represents 11% of revenue and gross profit. We believe Class eight commercial truck demand will continue to be driven primarily by replacement purchases in 2025 rather than fleet growth.

Premier trucks sold 4,714 units in Q1, which was up 4% when compared to Q1 last year and new units increased 7%, but declined 2% on a same store basis. This compares favorably to the 12% decline in the North American Class eight market in Q1 as the strength of our customer mix and the strength of the Freightliner West and Star brands outperformed. As of the March, the current industry backlog was 132,000 units or approximately six months of sales, down from 163,000 units in March. Used units declined 7%, including 9% on a same store basis. However, used gross profit more than doubled to 7,541 from 3,187.

Revenue was $824,000,000 and EBT was $45,000,000 for the quarter for a return on sales of 5.5%. Same store SG and A to gross profit was 63.1% and fixed absorption was 117.5%. Looking to the future, Freightliner is committed to a minimal price increase related to tariffs. Initially, a tariff surcharge of $3,000 on Heaven Duty and $1,500 on Medium Duty trucks will be applied. Any customer who places an order prior to the May for production by the October will see a not to exceed maximum tariff of $3,500 Tariffs on future orders beyond this point are not known at this time.

Further, the potential truck pre buy for 2027 emission changes will be dependent on the outcome of the current EPA review of the waivers granted to certain states. Turning to Penske Transportation Solutions. During Q1, revenue was flat at $2,700,000,000 Full service revenue and contract business increased 5%, logistics revenue decreased one percent and rental revenue declined 10% as the freight recession continues to impact the number of units on rent and our overall rental utilization. During the quarter, PTS sold over 11,000 units and ended the quarter with 428,000 units down from 435,000 at the December. PTS earnings were up $3,000,000 when compared to the first quarter last year and our share was $33,200,000 up 2% from $32,500,000 in the first quarter last year.

I would now like to turn the call over to Randall Seymour to discuss our international operations.

Thank you, Rich. Good afternoon, everyone. As a reminder, we operate retail automotive dealerships in The UK, Germany, Italy, Japan and Australia and a commercial vehicle and power systems business in Australia and New Zealand. Our international operations represents approximately 40% of PAG's revenue. Looking at The U.

K. Retail automotive market, new vehicle market registrations increased 6% compared to Q1 last year. We outperformed the market as same store new units delivered in Q1 increased by 9%. New vehicle gross per unit remained resilient, declining only $138 per unit on a sequential basis when compared to the fourth quarter last year. Same store used units declined 22% as a result of the transition of the U.

K. CarShop to Sytner Select and the closure and sale of four locations. Excluding Sytner Select, same store used unit sales in The UK would have only decreased by 2%. However, used vehicle same store gross increased by $589 per unit when compared to the fourth quarter of twenty twenty four as a result of improved vehicle inventory management. Service and parts same store revenue increased 2% and gross profit increased by 3%.

Turning to Australia. As you may recall, last year, we acquired three Porsche dealerships in Melbourne. During the first quarter, these dealerships retailed $5.40 new and used units and generated $60,000,000 in revenue. We remain very pleased with our progress in the commercial vehicle and power system business in Australia as well. Service and parts represented approximately 61% of our total gross profit, so our focus on increasing units and operation is a key driver of the business.

In the on highway market, during the first quarter, we gained 150 basis points of market share. In the off highway sector, revenue and margin were driven by strong energy solutions demand. We have a $300,000,000 backlog for 2025 delivery and an order bank of over $600,000,000 predominantly related to growth in the large data center and battery energy storage solution businesses. We continue to maintain market leadership in the high horsepower power generation segment with over 55% share. I would now like to turn the call over to Shelly Holgrave to review our cash flow, balance sheet and capital allocation.

Thank you, Randall. Good afternoon, everyone. Our balance sheet remains in great shape and our continued strong cash flow provides us with opportunities to maximize capital allocation. As you know, we follow an opportunistic approach, providing us with the ability to grow our business through acquisitions and return capital to shareholders through dividends and securities repurchases. We strongly believe that the strength of our balance sheet, strong cash flow, disciplined approach to capital allocation and our diversification will will provide benefits as we work with our customers and partners in an uncertain environment.

During q one, we generated $283,000,000 in cash flow from operations, and our EBITDA was 400,000,000 or $372,000,000 on an adjusted basis. On a trailing twelve month basis, EBITDA was over $1,500,000,000 Our free cash flow, which is cash flow from operations after deducting capital expenditures, was $2.00 $6,000,000 During Q1, we paid $82,000,000 in dividends and invested $77,000,000 in capital expenditures to improve or expand our facilities. When compared to Q1 last year, capital expenditures were down $26,000,000 During the quarter, we repurchased 255,000 shares of stock for $40,000,000 and year to date through April 25, have repurchased 750,000 shares for $111,000,000 We expect to continue repurchasing shares on an opportunistic basis. As of April 25, we have $46,000,000 remaining under the existing securities repurchase authorization. Our dividend is $1.22 per share.

Since the end of twenty twenty three, we have increased the dividend by 54%. Using yesterday's closing price, our current yield is approximately 3.1% with a payout ratio of 36%. Additionally, as we focus on strategic capital allocation, we divested one retail automotive location in Q1, which represented approximately $200,000,000 in estimated annualized revenue. Our strong cash flow has allowed PAG to keep its non vehicle debt and leverage low. At the March, our non vehicle long term debt was $1,770,000,000 down $80,000,000 from the December year.

78% of the non vehicle long term debt is at fixed rate. Debt to total capitalization was 24.7% and leverage is 1.2 times. When including floor plans, we have $4,400,000,000 of variable debt. 55% of our variable rate debt is in The US. We estimate a 25 basis point interest rate would impact interest expense by approximately $11,000,000 At the March, we had $118,000,000 of cash, and the liquidity available to us was $2,100,000,000 Upon the maturity of our $550,000,000 3 point 5 percent senior subordinated notes due in September, we currently expect to either repay those notes from cash flow from operations or borrowings under our U.

S. Credit agreement or refinance those notes in whole or in part with similar notes depending on the prevailing interest rate. Total inventory was $4,500,000,000 down $140,000,000 from the December 2024. Floor plan debt was $4,000,000,000 New and used inventory remains in good shape. New vehicle inventory is at a thirty nine day supply, including thirty eight days for premium and twenty nine days for volume foreign.

Used vehicle inventory is at a thirty six day supply. At this time, I will turn the call back to Roger for some final remarks.

Thank you. PAG's Q1 performance was certainly strong. I remain particularly pleased with the continued resilience of gross profit per vehicle retail, performance

our automotive service and parts operations and the success we continue to demonstrate with our SG and A leverage and our focus on cost controls, remain confident in our diversified model and its ability to flex with market conditions and remain very pleased with the performance of our business in the first quarter. Operator, at this time, you can open up the call for questions.

Thank you. Our first question comes from John Murphy from Bank of America. Please go ahead. Your line is open.

Hey, John. Hey, Roger. Hey, everybody. Just a first question on The UK. I mean, SITNER Select sounds like it's chugging along and you're making great progress there.

We got another two quarters before that anniversaries itself. But it sounds like there's some other really good work going on in The UK to make the business much more efficient and profitable over time. I wonder if you could just maybe comment and highlight some of the things that are going on there.

Let me let Randall give you an update on that. Go ahead.

Yeah. Good. Thank you. Look at the Q1, the U. K.

Total market was up 6% and at Sytner, we were up 9%, so outperformed. So that was certainly pleasing. But as you mentioned, you know, the gross profit on used cars overall was up $589. We had a record fixed month, in our, after sales gross profit as well. And back to both new car and used car, I'd really the kingpin there is inventory management.

We the aging is at a at a the best it's been in quite some time. We're really focusing on our new car day supply by model. So what that's doing is it's translating in lower inventory, more efficient inventory, a better turn on the inventory and better gross profit. So I really hats off to the team there. And then on the expense control as well, we're really looking at all of our demos where our headcount, we've had natural attrition where we've had headcount reduction there with some savings.

Back to fixed gross profit, our gross profit per technician was up 7%. So I think there's a lot of levers there we're pulling that is equated to the good result in Q1. And I think the best news is it's all sustainable as we move through the rest of the year.

That's very helpful. And then just a second question on parts and service. Results there are good, particularly on the margin side. But it sounds like warranty really dominated. I think, Roger, you mentioned up 17%.

Customer pay was up only 1%. Is there a crowding out effect going on there where there's just so much warranty work, it's kind of tough to get to the customer pay and grow it? And if also you could just remind us what the tech growth there is and door rate increases are as well in the quarter?

I think I mentioned that our tech count is up by five The average technician is driving about 30,000 gross profit for for for the month. And I think when you look at customer pay, it declined 3% in The US and certainly 17% from a from a PTS perspective. I think the the most important thing to think about from a standpoint, you know, when we look at parts and service is really the utilization of bays. And I think, Rich, you talked about it. We talked about earlier today.

We're running about 80% utilization of the bays, which is is critical. We have a big focus on, apprentices coming in because we've gotta build these technicians, from from the bottom up, which I I think is key. From a warranty standpoint, yeah, we've got Tundra, we've got Mercedes, we've got BMW, all with big recalls, which is driving that mix where it is at 17% overall versus 1%. And I think in The UK, as Randall's mentioned, we certainly have, have grown the gross profit there under because of cost controls and better utilization. And I would say we've driven a lower turnover in our service writers because we're getting probably, you know, more share of wallet from the customer when they come in.

And I think, that absolutely is helping us grow our fixed absorption 300 basis points here, and I'm not sure what it grew in The UK. Well, interestingly,

in The UK in q one, our customer pay was up 11%. So, you know, we're able to grow that business. And you're right. On the service adviser, we've done a lot of training on best advice with service drivers service adviser with customers coming through the lane. So, you know, good.

Our our our fixed absorption was, was up, just shy of 280 basis points. So, John, you know, better utilization, you know, more productivity from the technicians, certainly more share of wallet on the RO. So I think that that's interesting. One point I wanna make that maybe you won't ask, but as we keep monitoring, the BEV units, the battery electric vehicles, the average repair is running about $1,400, and the ICE vehicle at the same time, same brand is running about 700. So we still have a big opportunity.

And I would say all of Bev's work is warranty. So that's also driving the mix.

Got to love those Bev UIOs, Roger. Maybe just one last one. Tariffs are kind of impossible to call exactly where they're going to land right now, but it sounds like costs are going to go up to automakers and pricing might go up to some extent. Roger, what's your sort of gut feel on the price elasticity of demand particularly for your imports and your high end product? I mean is there room to inch up pricing and the consumer might not push back too much?

Mean what's your general just really gut check on that? It's tough to call.

Well, I think you gotta go back and we gotta look at the price increases that have taken place since '19. I think, the average selling price is up 17,000 just to put that in perspective. But I really wanna focus on, on premium luxury because as we look back, we're at 55% leasing. We've gone now to 45% here in the last, say, two quarters. So I see the ability to lease these vehicles with higher, certainly, residual values that the the finance companies can put on these will mitigate some of the impact to the customer.

I think that's gonna be critical. And having those leased cars come back will be important later on because we've had kind of a dip in that, from the COVID time when there was more cash buyers. But I think, it's gonna be, certainly, as I look at it, it's gonna be a fluid situation. I mean, things are expected to change. They did last night, obviously.

When you put it in perspective, there's about 7,900,000 vehicles that are imported to The US each year. And ironically, Mexico and Canada, I think, represent 51% or about 4,000,000 units. So with certainly, The US, actually, Canada initiative, hopefully that'll drive that to be more fluid and cost will be more realistic based on that opportunity for the people involved. So overall, I think there will be some impact probably on the lower priced vehicle depending if they're coming in, from from outside The US at the moment. But the stacking of tariffs, I think, was taken off the table here last or yesterday when it was announced.

So let me just say, think it's a fluid situation. You know, remember, when we look at our business, today and and look at the overall, you know, our total gross profit was 300,000,000, in the first quarter, and only 26% of that was new vehicle. And obviously, with that, will give us it's not the whole gross profit chain because of parts and service and and our diversification. So, you know, overall, we're gonna have to work brand by brand. And I think, Rich, you might wanna comment today from an automotive standpoint and truck standpoint.

Yes. So John, Rich here. I think I'd start with the truck. I think we stay close to Daimler. And as you know, we support exclusively the Freightliner Western Star brand.

And I would say they've taken a real leadership position in their communication and position in the marketplace and provided some clarity for how tariffs will impact our products there through the October of this year. So I think initially, they stated there will be a not to exceed amount of 3,500. That was refined to 3,000 on heavy duty, 1,500 on medium duty through July 4 production. They subsequently come out and said that for orders placed prior to May 31, they'd extend that pricing protection through October. So really the balance of this year from a production and subsequent delivery to us as a dealer standpoint with the caveat that those orders placed prior to May 31 are non cancelable.

So we'll have a high assurance of those orders when they come in that customers are committed to taking those trucks. So I think it's good that those customers have that certainty looking out in the future as things are very volatile at the moment. On the automotive side, a little bit varied brand by brand relative to the communication. But I would say the majority of brands have committed for price production through May or June timeframe. You know, and and with the units we have on ground in inventory at the moment, new units around 16,000, we think that carries us through June from a retail sales standpoint.

And as we've seen over the last thirty days with various different changes, it's not unrealistic to think we'd see further change before the June as well.

Thank you very much guys. I appreciate it.

Our next question comes from Mike Ward from Citigroup. Please go ahead. Your line is open.

Hey, Mike. Thanks very much. Good afternoon, everyone. Good afternoon, everyone. Hi, Hi,

and A costs as a percentage of gross have been pretty flat. They've taken out seven straight quarters. Is that sustainable? And what are some of the things you've done, or can it even go lower?

Why don't I have Shelly answer that question for you, Mike?

Hey. Yeah. We are really pleased with our performance and SG and A to growth. Steve mentioned relatively flat in the low seventies as we have kind of guided and and feel very comfortable with that continued guidance, you know, down 70 basis points on an adjusted basis year over year, down 30 sequentially. It's really all about our team's daily focus on what we can control.

And so as our team is, taking a look at headcount, we remain still down 10% from pre COVID levels, on a same store basis. We look at turnover, which is a a daily effort by our teams, and and we remain below NADA averages across the board. So really keeping our personnel costs low, looking at comp to growth metrics, and making sure that we don't leak growth. You know, we had an excellent result this quarter. In The US, comp to growth declined 30 basis points.

In The UK, they declined a 10 basis points. And when you factor in that more of their compensation is fixed, it's a tremendous result by our team. So they did a really great job containing those costs. And the other side of that equation, obviously, is growing growth. And and when you look at some of our our higher margin, growth line, you know, we've grown surface and parts 40% since the same q one of twenty nineteen.

Randall and Rich both talked about fixed absorption on their business lines. And then some of the other items that we can control, advertising, for example, down $3,000,000 quarter over quarter, things like travel and entertainment down a million. All of those items really continue to add up, and, we're seeing the right result.

And so if if what I gathered from what Randall was saying, it sounds like The UK market has maybe bottomed and started to turn the other direction, gaining some momentum. And if a lot of those costs are fixed, then if if we start getting some momentum in The UK, we should see additional improvement. Am I hearing that right?

Yeah. Look, I would say as far as the macro market overall, you know, being up 6%, I don't expect it to to go up significantly. But I think just our leadership team over there is doing an amazing job, and we're pulling some levers like I talked earlier relative to inventory management. One thing I didn't mention was upside on F and I. We've introduced some more products.

And remember, March was a registration month too. September will be the next one. But I think our performance and as it pertains to managing the gross growth opportunity and our expenses is absolutely sustainable and super proud of what the team is doing.

I like to mention too on the sit and select what you're doing on inventory?

Yeah. So we typically hold about 2,000 units in inventory. And just to give you a note, as of today, we had 11 cars over ninety days. So we're really managing the age, but I think even more important than that is the sourcing and really trying to get more stickiness on on trades, whether it be on new car or used cars because our gross profit opportunity on trades is a lot better than, you know, raising your hand at the auction next to 50 other people. So the result of that was a record gross profit per unit at Select in March after escalating even from January, February being strong.

And the other point in that business, I mean, we're we're really focused on younger you used cars, meaning the zero to four, maybe five, six. But as soon as you start getting over that, we you know, that that space, you end up selling it and then you, you know, you invariably have problems, and you gotta take care of the customer. So your policy expense goes up or you're buying the car back. So we've just found it better to keep it clean with the, with the newer cars there on the on the select side.

And then, Shelley, is the share count currently or what we'll see on the 10 q, is it about 66,000,000?

It's pretty consistent with prior year. As you know, when we make those buybacks, they that number is weighted, Mike. And we also had a a a share grant within the quarter. So you'll see a fairly consistent, you know, 66.7, in the quarter. However, you know, we'll continue to see that go down as as, repurchases are weighted differently throughout the year.

Yeah. For for two q or one q? Because you you bought back in April. Right?

We bought back in March and in April. So, you'll see the full effect of the March, during q two and then a a weighted q two number, for, the April repurchases.

And and so the weighted two q number is gonna be sixty six seven or it's gonna be lower than that?

Oh, I'm sorry. We, I thought you were talking about EPS for q one, but

So with the with the shares that we per repurchased in the month of April, the share count will be lower in the second quarter than what it was in the first quarter.

Correct. Right. Okay. Now, Shelly, when you're looking at repurchase, is it just the big sell off in April with the tariff talk opportunistic? And is that the way you're going to look at it?

I know you balance it out with acquisitions and other stuff. Is that side of the market dried up and you just find your stock cheap enough and that's why you picked up a little bit?

I wouldn't say that it's dried up by any means, Mike. I would say the industry as a whole seems to be taking a pause as we await, you know, different outcomes of of the tariff discussion. We are certainly still interested from an acquisition standpoint. You know, we'll remain opportunistic. And so if if the market remains consistent or if, you know, we find ourselves with different options, we're gonna we're gonna weigh them as they come.

Yeah. Mike, we've operated. We really haven't changed any offense. We've been operating under a 10 b five, obviously, which goes out as of, I think, today, but that's been the driver specifically over the last quarter.

Penske Automotive Group (PAG) Q1 2025 Earnings Call Transcript

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