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

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

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

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

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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Q4 2024

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 Fourth Quarter twenty twenty four Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through 02/20/2025 on the company's website under the Investors tab at www.penskeautomotive.com. I'll 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 fourth quarter twenty twenty four financial results was issued this morning and is posted on our website along with a presentation designed to assist you in understanding the company's 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, our Chair Shelly Hallgrave, EVP and Chief Financial Officer Rich Shearing, North American Operations Randall Seymour, International Operations and Tony Faccione, who is our 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 such as earnings before interest, taxes, depreciation and amortization or EBITDA and our leverage ratio. We have 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 are 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 also direct you to our SEC filings, including our Form 10 ks and previously filed Form 10 Qs for additional discussion and factors that could cause future events to differ materially from expectations.

At this time, I would now like to turn the call over to Roger Penske.

Thank you, Tony. Good afternoon, everyone, and thank you for joining us today. I'd like to begin with by thanking each of our team members for their hard work and commitment to exceeding expectations through their efforts at PAG and delivered a strong fourth quarter another outstanding year of profitability During 2024, PAG delivered 491,000 new and used vehicles and over 20,500 excuse me new and used commercial trucks. We increased our revenue by 3% to $30,500,000,000 We generated $1,240,000,000 in earnings before taxes, dollars $919,000,000 of net income and earnings per share of $13.74 We continue to grow our business by completing acquisitions of $2,100,000,000 expected annualized revenue, including expanding automotive operations in The U. S.

And UK, entering the retail automotive market in Australia with three Porsche dealerships and adding a strategic commercial truck location in Wisconsin. In our press release this morning, we announced the seventeenth consecutive increase in our quarterly dividend. The increase was $0.03 per share to $1.22 per share. Since the end of 'twenty three, we have increased our dividend by 54%. We maintain strong balance sheet and debt capitalization with ratios of 26.2 and leverage of 1.2 X.

Now let's turn our attention to the latest quarter results. I'm very pleased with the financial performance during the quarter. Revenue increased 6% to a record $7,700,000,000 New and used automotive gross profit per unit retailed remained strong and overall gross margin was 16.3%, representing the sixth consecutive quarter of consistent gross margin. Our efforts to control costs drove a 70 basis point reduction when selling, general and administrative expenses as a percentage of gross profit when compared to the fourth quarter last year and a 90 basis points improvement sequentially when compared to the third quarter of twenty twenty four. In the fourth quarter of twenty twenty four, PAG generated $315,000,000 in income before taxes, dollars $236,000,000 in net income and income per share of $3.54 Income before taxes increased 23%, net income grew 24% and earnings per share increased 25%.

On an adjusted basis, income before taxes increased six percent and income grew by 2% and earnings per share increased by 3% when compared to last year. Looking at our retail auto business, we delivered 120,530 units during the quarter up nearly 3%. Our same store units were flat new units delivered increased 11% Average new vehicle transaction price increased 5% to $60,288 Gross profit per new vehicle retail remained strong at $5,146 and increased sequentially by $74 from the third quarter of twenty twenty four and remained nearly $2,000 higher in 2019. Used units declined 6%. Gross profit per vehicle retail increased $349 quarter over quarter.

The unit decline is associated with the disposal of three UK car shop locations as we transitioned The UK based car shop location to Sytner Select in 2024. The Sytner Select dealership sell fewer units, which contributed to the 6% decline in used vehicles retail during the fourth quarter. Excluding Sytner Select, dealerships in both period used vehicles retail would have increased eight percent. Variable gross profit per unit retail was $5,319 representing a $60 per unit increase versus Q4 'twenty three and a sequential increase of $2.00 $3 when compared to the third quarter of twenty four. Approximately one half of our gross profit is derived from our service and parts business.

As we look to continue growing this important part of our business, we've increased our technician count by 7% during 2024 and our effective labor rate in The U. S. Has increased 6%. In the quarter, service and parts revenue increased 13% to $771,000,000 including 7% on a same store basis with customer pay up 3% already up 24% and collision repair up 4%. Fixed absorption in The U.

S. Increased three twenty basis points to 87.5. In The U. S, the average age of vehicle service is six point one years, up from five point five in 2019 to 2019. The average miles on our vehicle service was 69,000.

Thank you, Roger, and good afternoon, everyone. In our U. S. Retail automotive operations, we experienced a surge in traffic post election. For the quarter, new units increased 10%, while used units increased 6%.

During the quarter, 33% of the new units sold in The U. S. Were sold at MSRP demonstrating continued strength in demand. Although we've done a great job working with our OEMs to manage bev inventory to be more closely aligned with customer demand, the majority of bev units still require significant discounting. In Q4, the average discount on a bev from MSRP was nearly $6,900 per unit.

Turning to our retail commercial truck business, we remain one of the largest commercial truck retailers for Diamond Trucks North America and the retail truck business is one of our core pillars of our diversified model. We operate 35 full sales and service facilities, 11 stand alone service and parts facilities and 12 collision centers. We believe Class eight commercial truck demand will continue to be driven primarily by replacement purchases in 2025. During Q4, North American industry Class eight retail sales were flat at 82,000 units. At the December, the current industry backlog was 145,500 units or approximately five months represented five months' worth of sales.

Premier Truck Group sold 4,432 new and used units in Q4, which was down 18% when compared to Q4 last year. The year over year decline in sales is related to the timing of deliveries as supply shortages pushed out deliveries from the first half to the second half of the year in 2023. However, during that same period, gross profit per unit retail increased by 21%. Revenue was $774,000,000 and EBT was $45,000,000 for the quarter with a return on sales of 5.8%, up 10 basis points. Same store SG and A to gross profit was 60.8 and fixed absorption was 122%.

As we look towards 2025 and 2026, we expect replacement demand to continue while the anticipated emissions change for 2027 and the recovery and freight market could help drive higher retail sales. Turning to Penske Transportation Solutions. During Q4, operating revenue increased 3% to $2,800,000,000 Full service revenue and contract increased 9%, logistics revenue increased 3%. Rental revenue declined 9% as the freight recession continued to impact the number of units on rent and our rental utilization. The PTS operating profit increased $32,000,000 but was offset by higher interest costs of $9,000,000 and a decline in gain on sale of $25,000,000 The PTS earnings before tax of $188,000,000 were consistent with Q4 last year.

PAG's share of the PTS earnings was $52,300,000 up from $51,200,000 in the fourth quarter of the prior year. And for the year, PAG's share of PTS earnings totaled $198,000,000 and we received $98,400,000 in cash distributions. Would now like to turn the call over to Randall Seymour.

Thanks, Rich. Good afternoon, everyone. Looking at The UK retail automotive market, our same store new units delivered in Q4 increased by 1.5%, which compares favorably with the 2.7% decline in The UK new vehicle market in Q4. New vehicle gross per unit remained resilient, increasing $428 per unit on a sequential basis when compared to the third quarter. Same store used units declined 18% as a result of the transition of The UK car shop locations to Sytner Select, which focuses on lower volume, but higher quality premium vehicles.

Excluding those dealerships, same store used units in The UK would have decreased 2%, but pleasingly, used vehicle same store gross profit increased $542 per unit when compared to the fourth quarter in 2023. Service and parts same store revenue increased 8.6%. Turning to Australia. As you may recall, in December, we acquired our third Porsche location in Melbourne, the second largest city in Australia. We now operate three Porsche locations with an expected and annualized revenue of $260,000,000 and one Penske Select used car location.

During the fourth quarter, these dealerships retailed four sixty eight new and used units, generated $53,000,000 in revenue with a return of 4.5% on sales. Turning to our on and off highway markets in Australia, we remain very pleased with our progress. In Q4, the business produced a record revenue and a reduction in SG and A to gross profit of six thirty basis points. Service and parts represent approximately 65% 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, we delivered a record number of MAN trucks in 2024, boosted by our largest fleet sale ever.

In the off highway sector, revenue and margin were driven by strong energy solutions, mining and defense business. The Energy Solutions order bank is over AUD 600,000,000 for delivery of in 2025 and beyond, predominantly related to the growth in large data center and battery energy storage solution business. We remain market leadership in the high horsepower generation segment with over 55% share. And in the defense market, we provide power and support for submarines, frigates and infantry fighting vehicles. I would now like to turn the call to Shelly Hogre.

Thank you, Randall. Good afternoon, everyone. I will review our cash flow, balance sheet and capital allocation. Our balance sheet and strong cash flow provides us with opportunities to maximize capital allocation. As a result, we continue to grow our business through acquisitions and return capital to shareholders through dividends and opportunistic securities repurchases.

During 2024, we generated $1,200,000,000 in cash flow from operations and our EBITDA was $1,490,000,000 Our free cash flow, which is cash flow from operations after deducting capital expenditures was $811,000,000 dollars In our press release this morning, we announced the seventeenth consecutive increase in our quarterly dividend. The increase was $0.03 per share to $1.22 per share. Since the end of twenty twenty three, we have increased the dividend 54%. Using yesterday's closing price, our current yield is approximately 2.9 with a payout ratio of 36%. Dividends paid to shareholders during 2024 were $274,000,000 and we repurchased approximately 517,000 shares at $149.69 per share for $78,000,000 Combined, we returned approximately $352,000,000 to shareholders in 2024.

In addition to the return to shareholders, we completed acquisitions of 23 retail automotive franchises and five commercial truck locations in 2024. Together, these acquisitions represent $2,100,000,000 in estimated annualized revenues, including $1,900,000,000 in retail automotive revenue and $200,000,000 in retail commercial truck revenue. Additionally, as we focus on strategic capital allocation, we also divested or closed 10 retail automotive locations in 2024, which represented approximately six fifty million dollars in estimated annualized revenue. Our strong cash flow has allowed PAG to keep its non vehicle debt and leverage low. At the December, our non vehicle long term debt was $1,852,000,000 up $223,000,000 from the December 2023.

'70 '4 percent of the non vehicle long term debt is at fixed rate. Debt to total capitalization was 26.2% and leverage was 1.2 times. When including floor plan debt, we have $4,500,000,000 of variable debt. 55% of our variable rate debt is in The U. S.

We estimate a 25 basis point change in interest rates would impact interest expense by approximately $11,000,000 As of December 31, we had $72,000,000 of cash and the liquidity available to us was $1,800,000,000 As we look ahead to the maturity of our $550,000,000 of 3.5% senior subordinated notes in September of this year, we currently expect to repay those notes from cash flows from operations or borrowings under our credit agreement. Total inventory was $4,600,000,000 up $350,000,000 from the December 2023. Floor plan debt was $4,000,000,000 New and used inventory remains in good shape. New vehicle inventory is at a forty nine day supply, which includes forty one days in The U. S.

And sixty five days in The UK. Day supply of new vehicles for premium was 52 and volume foreign was 32. The day supply of new battery electric vehicles in The U. S. Is seventy six days at the end of twenty twenty four, down from eighty eight days at the June.

Used vehicle inventory is at a forty seven day supply, which includes thirty five days in The U. S. And sixty days in The U. K. At this time, I'll turn the call back to Roger for some final remarks.

Yes. Thank you, Shelly, Rich and Randall. Twenty twenty four was a remarkable year for PAG and reflected record revenue and one of the strongest years of profitability in the company's history. I remain particularly pleased with the continued resilience of gross profit per new vehicle retailed and the focus on our cost controls. I'm very confident in our model and the performance of the business.

Appreciate you joining us today. Let's turn it over to the operator for questions. Thank you.

Our first question comes from Michael Ward from Freedom Capital. Please go ahead. Your line is open.

When I look at that chart on Page six of your slide deck, it's been pretty consistent since 2019 with your allocation strategy.

Has anything changed? I mean, is there anything when you look at it seems like we're in a wave where maybe acquisition opportunities are a little bit greater? And will that continue in 2025, '20 '20 '6? Will you continue to look at your core competencies, whether it's overseas, whether it's in trucks, whether it's US, is there anything shifting there or can we expect more of the same assuming that we're in a similar type environment?

We've talked before about our capital allocation strategy about wanting to grow 5% through acquisition and 5% internally. We did a really good job of taking advantage of some of the opportunities that came available to us this year acquiring $2,100,000,000 in annualized revenue.

So if you stay along that same line, 5% of revenue, I think that's a good target in terms of our acquisition strategy. We're of course going to balance that with multiples on our stock. But you're absolutely right. We're going to look at every corner of our business. And we did that this year, right?

We looked, we took a look at international to start the year with the acquisition in The UK. We expanded into the Australia retail market, which is a significant opportunity for us. We also expanded, domestically and we expanded with trucks. So we'll continue to do that. We we like being safe and secure, but for the right price and for the right opportunity, we will take advantage of that.

On the other side of that, we've got our return to shareholders in over $350,000,000 this year return, which is important to us and and something that, you know, we're gonna continue to, prioritize. We've got 150,000,000 of authorization from our board to look at share repurchases. And so we'll just go on down the line.

Next question comes from John Murphy from Bank of America. Please go ahead. Your line is open.

Good afternoon. Hey, Roger. Good afternoon, Roger and team. Roger, just a first question.

It seems like the business is particularly on the new auto side is hitting an inflection point. And I think this was the first time in a while we've seen the front end growth, as you mentioned, up sequentially and a year over year basis. There's constant fear that new GPUs are going to keep falling, but it's not what actually happened this quarter sequentially for sure. Do you think we're hitting an inflection point here in the auto business specifically and maybe in the total business as well and we're back to sort of this period of growth in front of us

Well, I think number one, I think as you look at PAG, you've got to look at our brand mix. And as you know, overall, we're about 77% premium. In The U. K, we're 95%. And when you look at brands like Mercedes, BMW, Porsche, Land Rover, where we have very high concentration, we see that those brands are maintaining the growth, which certainly helps us.

And overall, when you look at the go back to July of last year on new, we were at 6,500 and we're at 6,600 when I look at the January number. So look, I'm not saying that there won't be some deterioration. That would not be the right thing to communicate today. But overall, I think that from what overall standpoint, we have the opportunity to continue to have the strong gross profit. Obviously, F and I is a piece of that and we're really flexing to have more product and probably less F and I are financed because of the mix of leasing coming back.

That'll help us on the premium side because a lot of these cars will go out. They'll come back on a three year lease and we'll get those as good used cars. And I think we can also use the vehicles we had in the past, that we couldn't use new loaner cars and service. We're doing that now and those cars coming out or make terrific used cars. So I think the gross on used will continue to be strong.

Obviously, as we look at The UK, we've taken the day supply over 90 in The UK unused from 6.1% or 6.2% down to just over 1%. So that's driving a higher margin. And again, Toyota is very strong now, which could be some ability to determinate to some downward pressure because we're dealing with Toyota with a single day, a single digit supply of use of new cars right now. So, I feel good about it. I think interest rates coming down hopefully we'll see more.

So affordability will be key. And again, I see the captive finance companies being very active right now also. So that helps us maintain the growth.

And maybe Roger just to follow-up on that. Your bevs have been a weight on that GPU for quite some time now. Do you see relief from that going forward? I know the automakers becoming more realistic about what they're going to be delivering to you with bevs and you're not going to be overburdened with those?

Well, if you ask me that question six months ago, I would say that our inventories were 30% to 40% bevs and the two premium to high premium brands. Now that is now down to about 11%, which really is more active from the standpoint of what we're selling. We're at 8% last year. So they've made a big pivot. And Porsche, who had the new Macan that came out, which was fully electric, has already notified to the dealers that they're going to have a nice version, which is really key.

When we look at the discount right now, just take MSRP across all the bevs that we sell, it's about $6,800 less than a nice vehicle in each brand.

That's helpful. And just lastly, on the technician hiring plus 7% for 2024, what do you think you're going to be able to hit in 2025 as far as tech growth and how scarce are these folks? Are you finding more and more people coming in?

Well, I would say this and from talking across the network that we're seeing more applicants than we have in the past. Now do they meet our criteria? Probably the answer probably is no many of them. But we see filling this funnel with people that can move up in the organization and we team them up with an A Tech and it's really paid off because this is a great business. And when we look at the techs, they're generating about $30,000 of gross profit per tech per month, which really helps us.

And we're driving efficiency and we're using technology obviously to get this as gross profit. And again, I think this is key to us. One of the areas that we're always concerned about is body shop. We're investing a lot in body shops, both on the auto side and also the commercial truck. And we see this as a secret sauce where we're staying in it, not divesting of our body shop.

So because as we get into premium side, not many people can fix a BMW or a Porsche properly. So we get the benefit of negotiating a better rate with the insurance companies. And I think when we grow our own, we certainly have less turnover. And I would say our turnover for the company last year was about 18% on a worldwide basis. And I think on the text, it probably was somewhere in 12% to 13%.

That's very helpful. Thank you very much, Roger.

Our next question comes from Thomas Wendler from Stephens Bank. Please go ahead. Your line is open.

Yes. I wanted to start off with just the commercial truck demand in 2025. How impactful do you think some of the pre buying could be prior to the emission changes in 2027?

Yes, Thomas, Rich Shearing here. I think it's a little bit of a wait and see at the moment because obviously you've seen the Trump administration and the new head of the EPA taking a look at rescinding some of the waivers that are out there today, whether that's advanced clean truck, the truck true or transportation refrigeration unit regulation. And then also looking at a national standard, and taken away California's ability to have independent regulations. And so none of those things are turned around quickly or easily. But I think there's a lot of support around some of those initiatives.

And so I think time will tell. But I think right now most of the OEMs have probably made a significant investment already in meeting the 2027 standards around the book. And so that's going to play into the results as well. So I think as it relates to 2025, I don't think we'll see much of a pre buy effect there. As we go into 2026%, we'll have better clarity than on what the regulations are going to look like in 2027 and maybe a little bit easier to answer that your question.

I think the other thing that would temper a pre buy is this rate recession. There's been it's lasted a lot longer than any of the previous cycles because of the amount of capacity that's in the marketplace at the moment. Typically, when you have a freight recession, the capacity comes out fairly quickly. You have a big reduction in used truck pricing. And then you get to a new state of equilibrium where the capacity and the trucks available meet the loads that are there.

And that's not the case at the moment. With the used trucks that were sold at very high prices in the 2021, '20 '20 '2 timeframe, we're not seeing those carriers come out of the market as fast as they did in the past. And so that's adding to the length of the freight recession. So there's still an excess capacity for the amount of freight in the market at the moment.

That was perfect. Thank you. And then maybe shifting gears a little bit here over to SG and A, 70 bps of improvement year over year this quarter. How should we be thinking about the major kind of puts and takes to SG and A in 2025?

Hey, Tom, it's Shelley. Thanks for your question. Our teams, first off should be commended for their daily efforts in SG SG and A. And and they're continuing to fight against inflation by watching, you know, all of the costs that go into that, numerator of the equation. We saw some success this this quarter in terms of lowering our, vehicle maintenance for service owners.

We saw, an improvement in our advertising as we streamline our approach there. So really great job by our team of of just a daily battle to keep those costs low. When you look at the other side of the equation though, we're looking at at growing margin and the more profitable business lines. So with fixed growth up 9% and that's got a 58%, gross margin to it, reducing inventory costs. So we get more out of those used vehicles.

You know, we're kind of pulling on all levers there. In terms of 2025, I think we're still comfortable with that low 70s guidance. You know, we've maintained it for the last five quarters. So it certainly seems, to be more normalized as opposed to just a trend. And, you know, we continue to see some improvements quarter over quarter being down 90 basis points from the third quarter.

It feels really good about our efforts. And again, our team should be commended.

We're really watching our comp to growth. This is a metric that people don't talk about much. But to me, we're looking at somewhere between 25% on the variable side and 25% on the fixed. And this is how you balance your compensation and also the number of employees you have per location. So inventory controls, comp to growth and we talked about the technology obviously that we're doing.

And I think all this is driving this. And if you look at us probably and you look at 2025, we're going to be in that low 70%. I don't think we want to say we're going below 70% at all. So to be realistic, as you're looking to maybe some support on guidance on that, I'd say it's probably somewhere around 70% to 71%.

Perfect. Thank you for answering my questions.

Our next question comes from Rajat Gupta from JPMorgan. Please go ahead. Your line is open.

Great. Thanks for taking the question. I just had one quick one on the truck leasing business. It looks like the truck price was stabilizing. You mentioned the basin demand is very strong.

Could you give us a sense of your outlook there for 2025 keeping the moving parts in mind? I mean, could we expect to grow again despite some of the interest rate and having severance? And I have a quick follow-up on that.

Well, what I would say to you is number one, we have a headwind on gain on sale. When you look at that from this last year, it was about $160,000,000 down from the previous year and certainly our interest costs were up 124. I think we're going to still see higher interest costs in 2025 because we're replacing 3% bonds with 5%. Percent. We just did 700,000,000 here in the last ten to twelve days and those are across the higher rates, which have a five year term on them.

From the standpoint of the used truck market, we think from the standpoint we're thinking it maybe we hit bottom. So obviously, we hope that that's going to turn in our favor. Remember, last year we sold 41,000 units, which was a record for us. And even as we look at January, February going forward, we expect to have a strong first quarter. And that will help us balance our rental fleet.

Our rental fleet was 88,000. And I think at the present time, we've taken out probably close to 10%. And to me, that's going to make a big difference on utilization, which is key. It doesn't take much. Remember, we don't have to buy more trucks at this point to get revenue or gross profit.

We just got to move our utilization because once we balance our fleet, it's all about utilization. And that's where we're focusing today. Obviously, we're balancing the personnel around the rental business also. So from our perspective, I'd be looking at a little bit of headwinds still on gain, certainly on the interest side. But when you look, we're up in sales from a lease standpoint from a contract maintenance and also in logistics.

So overall, I think that we're in good shape and the number is available. You can see it. We were I think we posted a pretax about $717,000,000 of pretax and net income was somewhere around $6.85. And I would say we'll be around that same area hopefully a little bit better. We'll get through 2025.

Got it. That's helpful. And then just on the auto business on the used car side. I mean, you're still going through the reset of The UK stores. Could you give us a sense of when you expect your used business to start growing again?

Maybe if you could break it apart across U. S. And U. K. In this context of the supply challenges of younger buyers, when you expect that business to start to grow again?

On a unit perspective, obviously, grosses have been very strong.

Yeah. Hi, Rajat. It's Randall. I'll start with The UK. I would say it's going to continue to be challenged.

The estimate for the market for new car next year in The UK is about flat. So I think we're going to be in a similar, a similar market condition. So that's why we've taken the strategy to really focus on how we organically get inventory instead of going to the auction and buying cars that are very difficult to make gross on. So it's more of a gross strategy given the available inventory. And look, we're really focused with our team too is how you maximize our retention of trades when people are buying a new vehicle or used vehicle.

So those are some of the levers we're pulling to get more inventory given the market conditions.

And when you strip out, Randall, you strip out the car shop closures

or actually our used vehicle business was up on a worldwide basis. Which you better comment.

Penske Automotive Group (PAG) Q4 2024 Earnings Call Transcript

Company Participants