Conferencia de resultados del 3T de 2026 de Group 1 Automotive (GPI): Acuerdo con Hennessy y crecimiento en posventa

Puntos clave

• Group 1 Automotive registró en el tercer trimestre de 2026 unos ingresos de 5.400 millones de dólares, un beneficio bruto de 855 millones de dólares, un beneficio neto ajustado de 112 millones de dólares y un BPA diluido ajustado de 9,36 dólares procedentes de las operaciones continuadas.
• Las ventas comparables de vehículos nuevos en Estados Unidos cayeron un 4,6%, mientras que el beneficio bruto por unidad de vehículos nuevos disminuyó secuencialmente de 3.260 a 3.084 dólares. Las ventas comparables de vehículos usados en EE. UU. descendieron un 10%, aunque el beneficio bruto por unidad mejoró en comparación interanual.
• Los ingresos de posventa a cargo del cliente en Estados Unidos aumentaron aproximadamente un 3%, impulsados por un crecimiento de más del 4% en las órdenes de reparación. Group 1 también registró cifras récord en ingresos a cargo del cliente y volumen de órdenes de reparación en EE. UU.
• La adquisición de Hennessy Automotive Companies aporta 10 concesionarios, aproximadamente 1.700 millones de dólares en ingresos anualizados y 500 puestos de servicio. Alrededor del 75% de la cartera adquirida pertenece al segmento de lujo, con un margen EBITDA ajustado de aproximadamente el 7%.
• Group 1 prevé que las desinversiones planificadas, que abarcan entre 1.100 y 1.200 millones de dólares en ingresos, generen entre 625 y 675 millones de dólares en fondos hacia mediados de 2027. En combinación con Hennessy, se espera que estas acciones incrementen el margen EBITDA ajustado en unos 30 puntos básicos.
• El apalancamiento proforma ajustado por alquileres se situó en aproximadamente 4x tras la adquisición de Hennessy y las desinversiones reveladas en octubre. La directiva planea reducir el apalancamiento a cerca de 3x entre mediados y finales de 2027 antes de reanudar las recompras de acciones.

Datos financieros clave

Desempeño operativo y del negocio

Ventas de vehículos y accesibilidad económica en EE. UU.

Las ventas comparables de vehículos nuevos en EE. UU. disminuyeron un 4,6%. El beneficio bruto por unidad en vehículos nuevos cayó secuencialmente a 3.084 dólares desde 3.260 dólares, debido principalmente a la programación del cambio de año del modelo.

Las ventas comparables de vehículos usados en EE. UU. cayeron un 10%, aunque esto supuso una mejora secuencial. Group 1 redujo el precio medio de transacción de vehículos usados en 300 dólares con respecto al segundo trimestre y disminuyó la proporción de vehículos con un precio superior a 40.000 dólares. Más del 80% del inventario de usados se obtuvo mediante permutas o compras directas, mientras que las subastas representaron solo el 10%.

La directiva señaló que la accesibilidad económica sigue siendo una limitación en vehículos nuevos, usados y en posventa. No observa margen para aumentos adicionales de precios y pretende seguir siendo competitiva en costes de mantenimiento y reparación.

Posventa

Group 1 alcanzó máximos históricos en EE. UU. en ingresos a cargo del cliente y en número de órdenes de reparación. Las órdenes de reparación pagadas por el cliente en tiendas comparables aumentaron un 4,2%, las horas por orden de reparación bajaron un 1,4% y los dólares por orden de reparación subieron un 0,5%.

La campaña de cambio de aceite a 17,76 dólares atrajo a más de 36.000 clientes. La orden de reparación media de esas visitas fue de 180 dólares. Las solicitudes de financiación para facturas de reparación de mayor importe aumentaron un 7% interanual hasta alcanzar las 12.200.

La empresa vendió casi 62.000 planes de mantenimiento con descuento ONE Care en el acumulado del año y espera cerrar 2026 con unos 100.000. La productividad de los técnicos aumentó un 7,2%, mientras que la rotación de los asesores de servicio cayó un 6% interanual.

Los ingresos por garantías se mantuvieron estables frente a una comparativa del año anterior que había subido un 16%. Los ingresos y el beneficio bruto por reparaciones de colisión cayeron un 14% y un 12%, respectivamente, debido a que Group 1 reasignó capacidad hacia el servicio tradicional y cerró centros que no alcanzaban los umbrales de rentabilidad.

Financiación y Seguros (F&I) y cambio de marca

El servicio de F&I virtual está operativo en 70 tiendas de EE. UU. La remuneración de F&I como porcentaje del beneficio bruto disminuyó 100 puntos básicos en comparación interanual. Group 1 también ha comenzado a colocar su marca en productos seleccionados de mantenimiento y F&I, mientras que los administradores terceros conservan el riesgo de suscripción.

En los mercados donde se ha renovado la marca, el reconocimiento de la marca Group 1 entre los clientes existentes alcanzó el nivel de los nombres de tiendas tradicionales. El rendimiento de las ventas de vehículos nuevos en esos mercados fue aproximadamente 2 puntos porcentuales superior en tasa interanual al de los mercados sin cambio de marca. Alrededor de un tercio de las tiendas aún está pendiente de renovar su marca.

Adquisición de Hennessy y optimización de la cartera

La adquisición de Hennessy se cerró a principios del cuarto trimestre de 2026. Aporta 10 concesionarios, aproximadamente 22.000 ventas de vehículos, 1.700 millones de dólares en ingresos anualizados y un margen EBITDA ajustado del 7% aproximadamente.

La adquisición suma además 500 puestos de servicio y 280 técnicos, lo que incrementa el número de puestos de servicio de Group 1 en EE. UU. en más del 10%. La directiva señaló que aproximadamente el 40% de los puestos de servicio adquiridos están actualmente sin utilizar, lo que genera potencial para aumentar los ingresos de posventa.

Group 1 prevé que las desinversiones planificadas reduzcan aproximadamente entre 1.100 y 1.200 millones de dólares en ingresos y 22.000 unidades. Se espera que el programa genere entre 625 y 675 millones de dólares en ingresos hacia mediados de 2027, teniendo aproximadamente la mitad de las transacciones ya cerradas o en fase de acuerdo definitivo. Este programa excluye las desinversiones en California completadas en el primer trimestre.

Operaciones en el Reino Unido

Las ventas comparables de vehículos nuevos en el Reino Unido aumentaron un 8%, respaldadas por un sólido mes de septiembre tras el cambio de matriculación. El beneficio bruto por unidad de vehículos nuevos subió un 4% interanual en moneda local.

El beneficio bruto por unidad de vehículos usados aumentó un 14% en moneda local, mientras que el volumen comparable cayó un 5%. Los ingresos y el beneficio bruto de posventa crecieron un 7% y un 4%, respectivamente. Los gastos SG&A ajustados en el acumulado del año representaron el 80,8% del beneficio bruto.

Group 1 cuenta con dos concesiones de Geely abiertas en el Reino Unido y espera una tercera para finales de año. También planea abrir una concesión de Omoda Jaecoo a lo largo de 2026, sumándose a su franquicia existente de Leapmotor.

Perspectivas de la directiva

La directiva espera que la adquisición de Hennessy y las desinversiones planificadas mejoen el margen EBITDA ajustado de Group 1 en aproximadamente 30 puntos básicos y reduzcan los gastos SG&A como porcentaje del beneficio bruto en unos 100 puntos básicos de forma proforma.

La empresa prevé utilizar la generación de efectivo y los fondos de las desinversiones para reducir el apalancamiento desde aproximadamente 4x proforma hasta su objetivo de cerca de 3x entre mediados y finales de 2027. Se espera que las recompras de acciones se reanuden a medida que el apalancamiento se acerque a esa meta. Group 1 dispone de 306 millones de dólares restantes en su programa autorizado de recompra.

La directiva prevé mejoras operativas en Hennessy durante el primer semestre de 2027. Asimismo, espera que otras iniciativas, incluidos los programas de actualización de marca y posventa, contribuyan de forma regular en el cuarto trimestre de 2026 y el primer trimestre de 2027.

En cuanto a la posventa en EE. UU., la directiva espera que la base de clientes comience a reconstruirse durante los próximos 12 meses aproximadamente, a medida que los vehículos vendidos durante los periodos de mayor volumen de 2023 y 2024 entren en los canales de servicio de los concesionarios.

Riesgos y aspectos a vigilar

• La presión sobre la accesibilidad económica sigue siendo significativa debido a los tipos de interés, el patrimonio neto negativo, los costes de propiedad y las condiciones de financiación.
• La directiva observa poco o ningún margen para subidas adicionales de precios en posventa, lo que incrementa la importancia de la fidelización de clientes, el crecimiento de las órdenes de reparación y la productividad.
• Los volúmenes de vehículos usados en EE. UU. siguen siendo débiles, mientras que la competencia por el aprovisionamiento y los costes de adquisición continúan ejerciendo presión sobre el negocio.
• El crecimiento de la posventa se ve limitado por la atonía en los trabajos en garantía, un menor número de vehículos del periodo de ventas 2020-2022 que entran a los talleres y un menor reacondicionamiento interno debido al descenso de unidades usadas.
• El apalancamiento proforma aumentó tras la adquisición de Hennessy, convirtiendo la reducción de deuda en la prioridad inmediata de asignación de capital para la empresa.
• La directiva citó riesgos más amplios, entre los que se incluyen el descenso de las ventas del sector, los aranceles, la política comercial, el suministro de inventario, la integración de adquisiciones y las relaciones con los fabricantes.

Puntos destacados del turno de preguntas de analistas

La directiva aclaró que el programa de desinversiones vinculado a Hennessy tiene como objetivo entre 1.100 y 1.200 millones de dólares en ingresos y entre 625 y 675 millones de dólares en fondos hacia mediados de 2027. Es posible que se realicen desinversiones adicionales, pero el encaje estratégico seguirá siendo la consideración principal.

En cuanto a la posventa, la directiva afirmó que la oferta de cambio de aceite a 17,76 dólares está diseñada para atraer clientes y no para reducir los precios del servicio de forma generalizada. La campaña generó 36.000 visitas y una orden de reparación media de 180 dólares.

Group 1 señaló que los vehículos de ocasión certificados representan el 28% de su negocio de vehículos usados. Los vehículos de ocasión certificados suelen generar un beneficio bruto inicial más bajo debido a los mayores costes de reacondicionamiento, pero favorecen la retención de clientes a más largo plazo.

La directiva prevé que los cambios en la cartera aumenten el beneficio bruto de vehículos por unidad a nivel consolidado, ya que Hennessy aporta marcas de mayor margen como Land Rover y Porsche. Se espera que los márgenes de posventa se mantengan a grandes rasgos similares a medida que crezcan los ingresos.

En el Reino Unido, la directiva mantiene su atención en el crecimiento de los ingresos y en reducir los gastos SG&A hacia aproximadamente el 80% del beneficio bruto. También confirmó que los concesionarios Jaguar del norte de Inglaterra ya se han vendido por unos 50 millones de libras esterlinas, mientras que las ubicaciones del sur con mejor rendimiento se han mantenido.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good morning, ladies and gentlemen, and welcome to Group 1 Automotive's Third Quarter of 2026 Financial Results Conference Call. Please be advised that this call is being recorded.

I would now like to turn the call over to Mr. Pete DeLongchamps, Group 1's Senior Vice President, Manufacturer Relations, Financial Services and Corporate Development. Please go ahead, Mr. DeLongchamps.

Peter Delongchamps

Thank you, Joe, and good morning, everyone, and welcome to today's call. The earnings release we issued this morning and a related slide presentation that include reconciliations related to the adjusted results we will refer to on this call for comparison purposes have been posted to Group 1's website. Before we begin, I'd like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the conference call, statements made by management of Group 1 are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve both known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, inventory supply, conditions of markets, successful integration of acquisitions, adverse developments in the global economy and resulting impacts on demand for new and used vehicles and related services, the timing and proceeds of planned dispositions and trade policy, tariffs and manufacturer relationships. Those and other risks are described in the company's filings with the Securities and Exchange Commission. Participating with me on today's call, Daryl Kenningham, our President and Chief Executive Officer; and Daniel McHenry, CEO, U.K. Operations and Chief Financial Officer.

I'll now hand the call over to Daryl.

Daryl Kenningham

Thank you, Pete. Good morning again. There's plenty of narrative these days around headwinds in our sector and in the broader economy. Affordability is certainly an issue, negative equity, higher interest rates, cost of ownership, finance terms, geopolitical issues, a declining SAAR are all getting plenty of airtime. We can't control any of that. We can control how well we execute. Compared to the second quarter in the U.S., Group 1 improved our year-over-year performance in new and used unit sales, new and used PRU and SG&A leverage. Also, as industry new units declined from Q2 to Q3, our new vehicle sales increased. So we were pleased with our execution as we transitioned into the second -- into the third quarter.

Now turning to aftersales. In the third quarter, Group 1 set an all-time record in customer pay revenue and RO count in the U.S. RO count was up over 4% on a same-store basis. We also grew customer pay revenue 3.2%, lapping an 8% quarter last year and increased gross profit nearly 2%. We achieved that growth in a number of ways. As we discussed last quarter, new vehicle customers who purchased vehicles in the trough SAAR years of 2020 to 2022 are now returning to the market as aftersales customers. There are fewer of them. Their factory warranties are expiring. They have huge affordability pressures and they are affecting the aftermarket.

To recapture and keep those customers in Group 1 dealerships, we focused first on affordability. We launched the $17.76 oil change campaign in June, and it drove over 36,000 customers into our shops. Also, given that the average vehicle in a Group 1 service drive has over 67,000 miles on it, some customers are facing expensive repair bills. So we emphasized our available financing on large repair bills. As a result, we saw 12,200 customers apply for financing in the quarter, a 7% increase year-over-year. As an additional retention measure, we expanded ONE Care, our discounted maintenance plan at Group 1 beyond Houston and are now selling it across our U.S. footprint. Our team sold nearly 62,000 ONE Care plans so far this year, and we expect to finish the year around 100,000, supporting repeat visits for recommended factory maintenance in the years ahead.

We also continued our focus on adding capacity to our shops without additional capital investment. Since 2019, Group 1 has done a great job hiring and retaining technicians, increasing our same-store technician headcount by 23% in that time. Earlier this year, to improve our throughput, we put more focus on technician productivity. Several things can affect tech productivity. One of them is service adviser effectiveness. High service adviser turnover leads to low technician productivity. So we put programs in place to reduce our adviser turnover and we're successful in lowering it by 6% year-over-year.

We also implemented an updated technician mentoring program to increase the effectiveness of our newer technicians. Through these efforts, we saw a 7.2% increase in tech productivity in the third quarter. We believe there's an unlimited amount of aftersales business available to us, and we're committed to aggressively pursuing every avenue to capture that business in Group 1 workshops. We have more work to do to stay competitive and engage our customers in aftersales, and we will be relentless in our efforts.

Turning to SG&A. The cost reductions we implemented earlier this year have held. We further leveraged compensation in the third quarter even in a falling gross environment. We intend to stay focused on SG&A and leverage in this environment. Our used vehicle volumes improved sequentially, and our same-store PRU improved year-over-year. To address customers' affordability concerns, we were able to lower our transaction price $300 compared to the second quarter, and we reduced our inventory mix of $40,000-plus vehicles. And in an effort to retain more vehicles for retail, we lessened our reliance on the wholesale channels in the third quarter.

Our U.S. used vehicle same-store sales were down 10% on increased PRU. That's an improvement compared to our performance in the second quarter, but we still have work to do in this area.

Now turning to F&I. Virtual F&I is now in 70 stores across the U.S. Our customers love it. They see shorter wait times and our NPS scores are well above our targets. In our surveys, when customers are asked about their preference for a virtual experience in the future, 9.5 out of 10 of those customers say they prefer it. Virtual F&I is also driving our overall compensation costs lower. F&I comp as a percentage of gross profit is down 100 basis points year-over-year. We've also begun private labeling F&I products under the Group 1 name, which dovetails with a rebranding initiative.

Our Group 1 rebranding initiative is showing great progress. In rebranded markets, Group 1 brand awareness now equals the brand awareness of our legacy store names with our existing customers. We are also encouraged by our positive sales results. Our rebranded markets are outperforming our non-branded markets in year-over-year new vehicle sales performance. A unified brand allows Group 1 to present a more professional image, advertise more efficiently and offer programs such as ONE Care, our $17.76 oil change and private label F&I products consistently across our stores.

Also and very important in these days of large language model searches, a single brand name is benefited by things such as reputation scores across our entire footprint. Given that Group 1's reputation.com score is approximately 100 points above the automotive retail average, this is another advantage of a singular brand name in today's AI-driven search world.

Now turning to our acquisition of the Hennessy Automotive Companies. We closed on this transaction last week. We're grateful to the Hennessy family for 62 years of stewardship and are proud to welcome their team to the Group 1 family. Hennessy is a well-run business that strengthens our position in the Atlanta market. We now have 15 stores representing outstanding brands in the Atlanta Metro, representing -- generating nearly $3 billion in annual revenue. The acquisition adds 10 dealerships and approximately $1.7 billion in additional -- in annualized revenue. Approximately 75% of the portfolio is luxury, serving customers who are generally less affected by affordability pressures. These dealerships generate EBITDA margins of approximately 7% and add substantial aftersales capacity, including 500 service bays and 280 technicians.

The Hennessy acquisition alone increased our service bay count by over 10% in the U.S. Additionally, the Atlanta market is extremely attractive. It is the sixth largest MSA in America and is the fastest-growing market in the Southeast. Average household income in Hennessy's market is nearly double the U.S. And in the Atlanta Metro, Group 1 now owns 3 Land Rover, 2 Lexus, 2 Porsche, 1 Mercedes-Benz, 2 Toyota, 2 Ford, 2 Honda, 1 Lincoln and 1 Cadillac store with an average rooftop revenue of $170 million annually.

The Hennessy acquisition is a strong strategic fit for Group 1. It reinforces our focus on investing in high revenue, premium brand dealerships with attractive margins and SG&A leverage in growing markets where we have an established presence. We've also made very good progress disposing of stores that no longer fit our strategy.

I will now turn the call over to Daniel McHenry, who will provide more specifics on those dispositions, their timing and an overview of our financial performance. Daniel?

Daniel McHenry

Thank you, and good morning, everyone. In the third quarter of 2026, Group 1 Automotive reported revenues of $5.4 billion, gross profit of $855 million, adjusted net income of $112 million and adjusted diluted EPS of $9.36 from continuing operations. Almost most operating metrics I will speak to same-store growth rates. Consolidation growth rates are lower than same-store growth rates, reflecting dispositions as part of our portfolio optimization.

Now starting with our U.S. operations. New vehicle sales declined 4.6% on a same-store basis. New vehicle GPUs decreased sequentially from $3,260 to $3,084, largely reflecting timing of model year changeovers. In used vehicles, gross profit per unit remained stable year-over-year despite acquisition cost pressure and sourcing competition, but declined sequentially, reflecting model year changeover timing as well. Aftersales continue to provide stability to our earnings, as Daryl mentioned, we are executing initiatives to drive RO count growth and believe our customer per pay performance in the quarter was relatively strong in the current environment.

Same-store customer pay revenue increased approximately 3% with over 4% growth in repair order count. Same-store warranty was flat, which is solid against a warranty comp that was up 16% from the previous comparable period. We continue to optimize our collision footprint by reallocating capacity towards traditional service work where we see stronger long-term returns, while also closing centers that do not meet return thresholds. This resulted in a 14% and a 12% decline in same-store collision revenues and gross profit, respectively. Additionally, aftersales gross profit was negatively impacted by lower internal reconditioning work associated with the declines in used units.

Shifting to cost. The cost-saving actions implemented earlier this year continue to benefit our expense base. While adjusted SG&A as a percent of gross increased sequentially to 67.7%, our variable cost structure allows us to quickly to react to macro changes, and we expect additional SG&A leverage from the Hennessey acquisition and associated dispositions, which I will touch on later.

Turning to the U.K. In my first full quarter leading the U.K. business, I continue to be encouraged by signs of progress. The U.K. is progressing against its strategic plan, and we saw same-store increases in new vehicle sales, new and used vehicle PRU and parts and service. We have refocused the team on growth initiatives to regain our sales momentum and drive our aftersales business. Despite a difficult macro environment, new vehicle sales increased 8% on a same-store basis, driven by a strong September plate change month.

Importantly, same-store gross profit per unit was up 4% year-over-year on a local currency basis. For used vehicles, we focused on reducing inventory prior to the September plate change month. And as a result, same-store gross profit per unit was up 14% year-over-year on a local currency basis, while same-store volumes declined just 5%. We remain focused on balancing volume and profitability as market conditions evolve. Aftersales continued to build momentum with same-store revenue and gross profit year-over-year up 7% and 4% respectively, on a local currency basis.

F&I PRU held flat year-over-year on a local currency basis in a challenging macro environment. Aftersales and F&I remain central to the strategy of improving earnings quality in the U.K., and we continue to leverage proven operating practices from our U.S. operations to improve longer-term performance, and we are pleased with the aftersales results in the quarter. On expenses, adjusted SG&A as a percent of gross profit on a year-to-date basis was 80.8%. We remain focused on cost control and operating efficiency, and we expect to drive further SG&A leverage as we grow gross profit.

We continue to develop relationships with Chinese automakers. In addition to our existing Leapmotor franchise, we now have 2 Geely franchises open and a third expected to open by year-end. We have also agreed with Chinese automaker Chery to open an Omoda Jaecoo franchise later this year. While Chinese brands are a small part of the business, we remain open to additional opportunities with Chinese OEM partners.

Turning to an update on the Hennessy acquisition, dispositions and capital allocation. We closed the Hennessy acquisition in early in quarter 4. Hennessy adds approximately $1.7 billion in revenue and 22,000 units with an adjusted EBITDA margin of 7%. We have also made significant progress on our disposition plans to fund half of the acquisition and optimize our portfolio. We are expecting $360 million of proceeds from closed or under definitive agreement sales to date and are on track to raise approximately $625 million to $675 million in total around the middle of 2027. Our planned dispositions are expected to total approximately $1.1 billion to $1.2 billion of revenue and 22,000 units. Group 1's adjusted EBITDA margin is currently approximately 4%. Taken together, Hennessey and the planned dispositions materially improved the earnings profile and quality of our portfolio. On a pro forma basis, we expect these actions to increase our adjusted EBITDA margin by approximately 30 basis points and reduce SG&A as a percent of gross profit by approximately 100 basis points.

Turning to our balance sheet and liquidity. As of September 30, our liquidity of $2.5 billion was composed of accessible cash of $1 billion and $1.4 billion available to borrow on our acquisition line. Our rent-adjusted leverage ratio as defined by our U.S. syndicated credit facility was 3.3x at the end of September. On a pro forma basis, reflecting the Hennessey acquisition and our October disclosed dispositions, it would have been approximately 4x. We plan to return to our target of around 3x by mid to late 2027, and we expect to resume share repurchases as we get closer to that target.

While we believe in a balanced capital allocation strategy, our immediate priority is to reduce our leverage. Cash flow generation to date, 2026 yielded $350 million of adjusted operating cash flow and $219 million of free cash flow after backing out $131 million of CapEx. For CapEx, we expect to benefit from portfolio actions with the Hennessey acquisition and disposition plan, which results in lower capital expenditure requirements. This capital was deployed in the same period through a combination of acquisitions, share repurchases and dividends, including the acquisition of $340 million in revenues through September 30, $72.4 million repurchasing 205,190 shares at an average price of $353.08 and $20 million in dividends to our shareholders.

During the third quarter 2026, we elected to hold cash ahead of the Hennessy acquisition, while preserving flexibility to optimize leverage. We currently have $306 million remaining on our Board authorized common share repurchase program.

I will now turn the call over to the operator to begin the question-and-answer session. Operator?

Operator

[Operator Instructions] And our first question here will come from Glenn Chin with Seaport Research Partners.

Preguntas y respuestas

Glenn Chin

Thank you team and thank you for all the detail around the dispositions. Can you just confirm for me, I just want to make sure I'm not double counting or missing anything. But by mid-2027, can you just confirm that collectively, that will have -- or you will have expected to dispose of almost $2 billion in revenue. Is that the right neighborhood?

Daniel McHenry

Glenn, this is Daniel. The expectation of total revenue that we will dispose of by mid-2027 is $1.1 billion to $1.2 billion in revenues. Expected proceeds for that $1.1 billion in revenues is somewhere between $625 million to $675 million.

Glenn Chin

But does that not include, Daniel, all the dispositions you've made to date, for example? That's on top of that, correct?

Daniel McHenry

That's inclusive of the dispositions that we've made through quarter 3.

Daryl Kenningham

We've done about half that number. We've got about half those proceeds with the dispositions we've done to date, Glen, about $350 million.

Glenn Chin

Okay. All right. So really, all in by mid-2027, you will have expected to have disposed of that $1.1-ish?

Daniel McHenry

$1.1 billion to $1.2 billion in revenues. That is correct.

Glenn Chin

Okay. That's not what I had understood previously. But that's fine. Daryl, you mentioned private label F&I products. Can you just elaborate on that? What type of products you're offering? And what it involves? I mean, I'm assuming you're not taking on any risk.

Peter Delongchamps

No. Glenn, this is Pete DeLongchamps. No, we're not taking on any risk. But what we think is important as part of the rebranding effort is that we look at things like maintenance and the ONE Care products that we can label under Group 1, but that will be underwritten by third-party administrators.

Operator

Our next question will come from Rajat Gupta with JPMorgan.

Rajat Gupta

Just wanted to start with parts and services. We've had like 2 quarters now of declining same-store profit growth in the U.S. I know, Daryl, you mentioned like there are obviously areas in the market you cannot control. But if I'm curious like what -- when do you think revenue or profit starts to recover in the service business? Should we start to see that in the fourth quarter? Is there a time line that you can provide when you can get back to growth or just -- or the original mid-single-digit framework that you had provided? Just curious to get your thoughts there. And I have a quick follow-up.

Daryl Kenningham

Rajat, I think part of it is warranty is flat. So we're not seeing any of that. Also, as our used car business continues to recover, that will help us with our internal aftersales business. And then we keep driving customer pay and 4% year-over-year growth. We want to collect customers, which we did well. And I expect we will continue to do that and put that emphasis and focus. And then when we get a little warranty tailwind, I think that's just additive to it. So when you look at the trough SAAR years and those customers, we hope to be coming out of that and start to build UIO again here probably over the next 12 months because 10 million units of SAAR came out of the industry, which those customers are now not in our service departments. And then the ones that are there are defecting. So as we get back into the 2023, 2024 customers where there was 15 million, 16 million unit SAAR years, that customer base and aftersales will start to build again. So I would expect we will start to see that again within the next 12 months or so.

Rajat Gupta

Got it. And it seems like the price per RO is declining as well. Can you confirm that, Matt? And is there like -- even if the UIO does recover at some point, do you expect pricing pressure to persist? I don't know from just labor rate perspective, just warranty rate perspective. Just curious to get your thoughts there and how you...

Daryl Kenningham

Our hours per RO in the U.S. didn't change at all year-over-year. So I don't think our hours per hour didn't change at all.

Rajat Gupta

Understood. But do you expect any pricing pressure going forward, particularly around labor rates, given some of the increases you've seen over the last several years?

Daryl Kenningham

Yes, I don't think there's room to price. I agree with you there. There's no room to price. I think you got to stay competitive. We're going to stay on our affordability messaging. The good thing is an average car that comes into our store, our service drives has almost 68,000 miles on it. You can sell a lot of work on a 68,000 mile car. Just as an example of this. Our $17.76 oil change, we generated 36,000 customers out of that. But the average RO on those $17.76 oil changes was $180. So we're not doing it just to sell cheap oil changes. So our focus is to try to try to bring in the customers and then sell what's appropriate. And we feel like we achieved that in the quarter based on what -- where the market was.

Daniel McHenry

Rajat, just as a follow-up to your question, it's Daniel here. The number of CPROs increased 4.2% in the quarter. The number of hours per RO decreased by 1.4% of the time for RO. And the dollars per RO increased by 0.5%. So that was the makeup of the 3.5% and something rather than okay.

Rajat Gupta

Understood. And I just wanted to ask on SG&A. You've talked about implementing and getting the benefit of the cost action from recent quarters. I'm curious given just some of the choppiness in the overall macro, some of the UIO challenges in parts and service, are there any incremental cost actions that you might look to take in the near to medium term to offset some of that?

Daniel McHenry

Rajat, it's Daniel again. One thing that we're always focused on cost at Group 1. We continue to evaluate any cost actions that we can take as a company. And should as and when the macro change, we will continue to be laser-focused on cost actions.

Operator

And our next question will come from Mike Ward with Citigroup.

Michael Ward

First off, I want to give a shout out to ever put together the slide deck, incredible detail and very well done. Turning to the slide deck on Page 27, you have a pretty good rundown on the acquisition and dispositions. And I'm just checking my math because it looks like you're getting better prices for the sales than what you paid for the acquisitions. And it sounds like with Daniel, what you outlined on the margin front that on a net-net basis, it's incrementally positive to the margin and earnings front. Is that correct?

Daryl Kenningham

Well, I think your assumption is not wrong, Mike. We've been pleased with what we've been able to get for the dispositions. And yes, you're exactly right. We will see accretion in margins with Hennessey and with the disposal of these lower SG&A leverage stores.

Michael Ward

Okay. And so -- and about half the cost, is that about half the acquisition cost of Hennessey and will offset with some of these dispositions? Okay.

Daryl Kenningham

Yes.

Michael Ward

Secondly, in the U.K., you've made some great progress. And I'm just curious, Daniel, what's your target? Can you get back to the '23, '24 type performance levels? Is that where you're looking?

Daniel McHenry

Mike, great question. One of the things that I've been focused on, I would say, over the last 3, 4 months since being there is really trying to grow the business. I think that we've spent time taking cost out of that business and really been focused on cost sometimes at the expense of growing the business. Over the last 4 months, I think what we've seen from the point of view of new vehicle same-store sales growing by 8%. And we are not terribly exposed to Chinese OEMs. And when you brand adjust that, I think 8% has been a really good result for new vehicle growth. I think parts and service revenue growth at 7% against a market that has similar challenges to the U.S. at the moment in terms of the macro headwinds.

Costs are still a little too high, and we're going to continue to focus on that and getting the cost down to that kind of 80% number that we said for SG&A as a percent of gross. We're just over that at 80.8% year-to-date. But I do think that there has been significant progress made over the last 6 months.

Operator

And our next question will come from Alex Perry with Bank of America.

Alexander Perry

I guess, first, I just wanted to see if we could get a bit more of an update on how the remarketing effort is progressing. I guess any sort of impact to any major KPIs in the quarter? And any stats you can share as sort of you move further past the remarketing, what you're seeing in key metrics? And then how much more is there left to do there?

Daryl Kenningham

Are you referring to our rebranding?

Alexander Perry

Yes. Yes. Sorry, the rebranding.

Daryl Kenningham

Well, what we're seeing is our -- we measure our customer awareness and consideration and the awareness on the Group 1 brand is now equal to what our legacy brands were among our existing customers. We're also seeing in the markets that have been rebranded, we're seeing our sales performance year-over-year is better, about 2 percentage points better than it is in the non-branded markets.

Alexander Perry

That's really helpful. And then has -- how much more is left to do on the rebranding?

Daryl Kenningham

About 1/3 of the stores. And we're focused on doing it well and not necessarily -- I mean, we'll do it fast, but we're doing it well. One of the things that we're really focused on right now is large language model searches. Those are like 1/3 of automotive searches right now are being done through AI bots. And that's a different -- that takes different marketing. It takes setting up your websites very differently. Each different chatbot, whether it's Gemini or Cloud or ChatGPT rely on different criteria than, say, Google used to. And so we are really putting a lot of focus and energy around how to optimize for those AI bot searches. And one of the comments I made earlier was one of the things that's really important in those searches is if you have one brand name, your good reputation in other stores of that same brand name can affect your stores where somebody is searching. So if Group 1 Ford customers are searching, our reputation at Group 1 Toyota can help that Group 1 Ford search. And our reputation scores are 100 points higher than the industry average. So that's a good thing. And that plays into this. It's rebranding is not something that happens in isolation. The way customers are shopping is changing quite rapidly, and we're focused on that as well.

Daniel McHenry

Alex, just one stat that I would like just to appreciate there. Last quarter, there was significant discussion around the Texas market, in particular, and that we were having a more difficult time in Texas than some of our other regions. This quarter, we really closed that gap in new vehicles. New vehicle sales in Texas was only down 1.6% in the quarter, which was significantly less than it was down in the prior quarter.

Operator

And our next question will come from Bret Jordan with Jefferies.

Bret Jordan

When you think about the parts and service business, and I think you sort of mentioned the risk of losing customers to the aftermarket, are you bringing sort of same SKU service prices down to compete? Or are you sort of bringing them in with the discounted oil change as a door buster as opposed to broad pricing?

Daryl Kenningham

We price our maintenance items on the aftermarket, Bret. We have been doing that for several years at Group 1. So when we compete against the oil change and the brake repair places, and we price on them as a matter of practice at Group 1 shops. So we don't feel like we need to take any wholesale reductions in pricing to achieve that. And we do think affordability is a bigger issue for customers these days, which is why we launched the $17.76, and we're just trying to demonstrate there's value in doing business with us, and we can compete with the aftermarket. And at least based on the results we saw from that, we were really pleased with it.

Bret Jordan

And then I guess a question sort of big picture on brand mix and profitability. Obviously, a lot of headlines around VW and they're your largest brand in the U.K. But obviously, the other side of the coin is great profitability around Toyota Lexus, it's your largest in the U.S. Are you seeing any sort of either changes or big delta in brand profitability, pros or cons?

Daryl Kenningham

Well, I'll let Daniel speak to the U.K. I'm thrilled we're got more luxury in the U.S., and I'm thrilled we're heavy Toyota Lexus in the U.S. Let me just leave it at that. You do see some separation between some brands that are struggling on profits. And I'm happy with our brand mix, and I think that's helping us.

Daniel McHenry

Regarding the U.K., we actually did pretty well in Volkswagen last quarter. Our Volkswagen sales were up over 20% in the quarter. And margin didn't really suffer in the quarter. You saw that actually we had both a sequential and year-on-year increase in new vehicle margin on average. So Bret, against what you might expect, I was pretty pleased with our Volkswagen results.

Operator

And our next question will come from Jeff Lick with Stephens.

Jeffrey Lick

Daniel, great job in the U.K. Those results are looking good. I guess the first question, maybe just dovetails on what Glenn was talking about. The $1.1 billion, $1.2 billion, Daniel, does that include the California divestitures you did in Q1?

Daniel McHenry

That does not include the California divestitures that we did in Q1. That's the divestitures that we would have announced, Bret, at the start of the Hennessy acquisition. So divestitures done through Q3 and into Q4.

Jeffrey Lick

Well, Bret is pretty smart. So I won't take a fence that you called me Bret, but anybody else...

Daniel McHenry

Sorry, gentleman.

Jeffrey Lick

I know, I know -- but -- so you've got $450 million signed either signed or done subsequent to 3Q ending. I guess how much more of them is left if you take that $550 million, is that basically you had about $660 million to get to your $1.2 billion?

Daniel McHenry

Yes, Jeff, I'd say we're about halfway through in terms of deals that are at either APA stage or already closed.

Operator

And our next question will come from Joe Spak with UBS.

Joseph Spak

I'm glad to see the pro forma impact on EBITDA margin, SG&A growth from the Hennessy dispositions. I was wondering if you could help us dimensionalize what the portfolio might look like on some other aspects like new vehicle GPU or P&S margins. And then just also on -- to follow up on the dispositions, is there an opportunity to do even more than you've laid out to help fund this or maybe bring down leverage a little bit quicker? Just wanted to get your sense on the market there.

Daniel McHenry

It's Daniel here. I'll take the first part of the question, and Daryl will take the second part regarding the dispositions. Regarding pro forma, you would expect GPUs to go up for the company as a whole on the basis that the dispositions that we're making generally are performing stores, sometimes with less profitable brands in terms of GPU. What we're adding in on top, the Land Rover is one of our highest GPUs as is Porsche. So by pure math, you would expect the GPUs to go up in terms of profit per unit. Aftersales, it tends to be our margin doesn't really diverge much in terms of brand. So I would expect it to be at similar margins as we grow our parts and service business. Now as Daryl talked about in the call, with 500 service bays added to Hennessey and approximately 40% of those bays unutilized as we continue to utilize those bays, you would expect revenues to go up. But for modeling purposes, I would model the same margin.

Daryl will pick up on the disposition question.

Daryl Kenningham

Yes. There's -- the short answer is, yes, there's opportunity to dispose of more. And we look at it 2 ways. We look at it strategically, does this store fit with us anymore? That's an important part of this. And also, it's disposing of something help us lower our leverage? Yes, that's another point. But I think the strategic piece is the more critical part on those additional stores that you're referring to.

Joseph Spak

Okay. And just affordability, obviously, a big topic in the industry, you mentioned it. I was wondering if you could just remind us like how big is your CPO business? And is that something you can lean more into as consumers are looking for affordable options that could also maybe help use GPU because I'm assuming those are more profitable vehicles.

Daryl Kenningham

Yes. I'm sorry, go ahead, Pete.

Peter Delongchamps

So it's Pete DeLongchamps. I would tell you that 28% of our business is CPO. And actually, on a gross profit basis, they're less profitable because it takes higher reconditioning. So it's a balance of front-end gross profit versus long-term retention. So -- we're focused on it. It's always been around the 28% to 30% penetration rate, but we're pleased with where we are with CPO.

Operator

And our next question will come from Mike Albanese with StoneX.

Michael Albanese

Just I guess a quick clarifying question on the private label financing. And you had mentioned that it dovetails with the rebranding initiatives. If you could just kind of explain that, I guess, elaborate a little bit further? And then where are you seeing the lift? Is this mainly on the front end with conversion or penetration? Or is this mainly an aftersales tool for the higher-priced services?

Daniel McHenry

It's mainly an aftersales tool, and it's really not that complicated. What we've just done is taken the maintenance that we're already offering and white labeling Group 1 on top of it so that we can further the rebrand. But for instance, if we're selling a Ford warranty on a new car, we're not rebranding that. But it's about the maintenance piece of it, we want people to be thinking about going back to Group 1.

Michael Albanese

Okay. Got it. And what was the extent of this rollout at this point?

Daryl Kenningham

Well, we've rolled out the prepaid maintenance ONE Care across our footprint in the U.S. And then we did talk a little bit about using financing in our aftersales operation, and we saw some success with a little higher take rate on that in the quarter, which we think helps on the affordability piece for aftersales customers.

Michael Albanese

Got it. And so I guess the crux of, I guess, really what I'm trying to get at is I look at the customer pay performance, RO performance, how much of an incremental driver was this on the quarter or it's still too much in its infancy to play a role in the broader numbers?

Daryl Kenningham

I think you need intense focus on affordability and capturing customers. That's what we're trying to do because those customers coming out of warranty, there's fewer of them, and they are defecting at a higher rate and a lot of that is affordability driven. So -- and we'll continue to focus on that until we see the market change. We -- for the past few years, there's been an ability to price, but there's no ability to do that anymore.

Operator

And our next question will come from Daniela Haigian with Morgan Stanley.

Daniela Haigian

I think double-clicking on that affordability piece, I want to ask about the used vehicle side. U.S. same-store volumes were down year-on-year, but then PRUs were up. So how are you thinking about the mix? I know, Pete, you talked about this a little bit with certified preowned, but anything else on sourcing or optimizing profitability versus share as you go into 4Q and '27?

Peter Delongchamps

Sure. So clearly, affordability is an issue. So we're really focused on trying to drop the acquisition cost and the overall sale price of the pre-owned. Sourcing remains challenging. I was very pleased to see that we are only 10% auction because, as you know, those are usually the highest priced and lowest gross profit units that we merchandise. But we were pleased with the progress we're making on acquisition cost and sourcing. 80-plus percent was through trades or purchases, only 10%, I said was option. So I think sequentially, we made really great progress. But clearly, we're not pleased with the overall volumes, and that is a top priority in the company.

Daniela Haigian

Great. And then just thinking about outlook into the fourth quarter and 2027, the timing of some of these benefits from the Hennessy acquisition and other improvements you're making to the business such as rebranding, when should we start to see that flow through into SG&A, into parts and service, et cetera?

Daryl Kenningham

Well, the Hennessy stores run well today. We see opportunities for improvement, which I expect we'll see over the first half of next year at Hennessy. Some of the other levers that we discussed, you'll see those, I think, on a regular basis in Q4 and into the first quarter of next year.

Operator

And our next question will come from John Babcock with Barclays.

John Babcock

First one, it seems like at least there are initial signs that rates may be rising more sustainably here. I just want to -- because you have a decent bit of variable rate debt, how are you thinking about your capital structure? Are you still comfortable with that 3x target? Or does it maybe make sense to get further below that if rates do rise more? Also, if you could just generally talk about your plans with the capital structure overall, that would be helpful.

Daniel McHenry

Capital structure overall, clearly, we did our bond deal in quarter 3. I would say I was pleased with the rate that we came out there, and it significantly pushes our debt out into the future with those 2 tranches of $625 million each. The 4% bonds are going to come due 2028. We'll start to deal with those shortly, I would say. But clearly, that rate is still a great rate to have out there. But we'll get those paid off with the liquidity that we have in our balance sheet today, and we have about $1 billion in terms of liquidity today. 3x really is our targeted leverage. I think if we get down to 3x, we would like to get back to buying our stock back. You can see that the stock today is super attractive in terms of its price, both for investors and for Group 1. So as soon as we can get down to that 3x leverage, that's where we will be more focused.

John Babcock

Okay. And then my other question is really just -- I was wondering if you could talk about comparing how the consumer generally like how they're reacting both in your new and used vehicle businesses and also just parts and service now relative to how they had been back last quarter. Just want to get some sense as to whether there's been any notable weakening or if there's anything else to call out there.

Daryl Kenningham

I think in the quarter, it's too early to tell. And I think it's -- I haven't seen a discernible difference between where we were and where we are. We do know affordability is an issue and pricing in any place is difficult or impossible. And that's kind of how we're trying to manage the business.

Operator

And our next question will come from David Whiston with Morningstar.

David Whiston

I was just curious on the change with the Jaguar terminations in the U.K., what changed there to have you guys changed your mind?

Daniel McHenry

It's Daniel here. Whenever I look at our Jaguar Land Rover Jaguar portfolio that we had in the U.K., I would have said it was a tale of 2 halves. The stores that we had in the North of England, they really struggled. Generally, the stores that we had in the south of England did quite well, particularly around South London. We had some discussions with Jaguar Land Rover around the dispositions. They were keen for us to remain as a partner. And some of the new models that are coming to that brand, it made it more accretive for us to keep those stores and sell those stores.

David Whiston

You are disposing of the northern ones?

Daniel McHenry

We already have disposed of the Northern stores, and we've already had the proceeds for those Northern stores, which is about GBP 50 million.

Operator

And that concludes our question-and-answer session. I'd now like to turn the call back over to Daryl Kenningham for any closing remarks.

Daryl Kenningham

In summary, we remain committed to our strategic initiatives, local focus, operating excellence, differentiated aftersales and disciplined capital management. Thank you for your time today. We look forward to discussing our fourth quarter results in January.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.