グループ1・オートモーティブ (GPI) 2026年第3四半期決算説明会：ヘネシー買収とアフターサービス部門の成長

要点

• グループ1・オートモーティブが発表した2026年第3四半期の継続事業からの売上高は54億ドル、売上総利益は8億5500万ドル、調整後純利益は1億1200万ドル、調整後希薄化後EPSは9.36ドルとなった。
• 全米の既存店新車販売台数は4.6%減少した一方、1台当たりの新車売上総利益は前四半期の3,260ドルから3,084ドルへ減少した。全米の既存店中古車販売台数は10%減少したものの、1台当たりの売上総利益は前年同期比で改善した。
• 全米の顧客負担アフターサービス売上高は、修理注文数の4%を超える増加に支えられ、約3%増加した。また、グループ1は全米における顧客負担売上高および修理注文数で過去最高を記録した。
• ヘネシー・オートモーティブ・カンパニーズの買収により、10店舗のディーラー、年間換算で約17億ドルの売上高、および500のサービス作業ベイが追加される。買収したポートフォリオの約75%が高級車ブランドで占められており、調整後EBITDAマージンは約7%となっている。
• グループ1は、11億ドルから12億ドルの売上高に相当する計画済みの事業売却により、2027年半ば頃までに6億2500万ドルから6億7500万ドルの売却収入を生み出すと見込んでいる。ヘネシーの買収と併せて、これらの取り組みにより調整後EBITDAマージンは約30ベーシスポイント上昇する見通しである。
• ヘネシー買収および10月に公表された売却完了後のプロフォーマ賃料調整後レバレッジ比率は約4倍となった。経営陣は、自社株買いを再開する前に、2027年半ばから後半までにレバレッジ比率を約3倍に戻す計画である。

主要財務データ

事業および営業業績

全米の自動車販売およびアフォーダビリティ

全米の既存店新車販売台数は4.6%減少した。1台当たりの新車売上総利益は、主として年度モデル切り替えの時期に起因して、前四半期の3,260ドルから3,084ドルへ減少した。

全米の既存店中古車販売台数は10%減少したが、前四半期比では改善傾向を示した。グループ1は中古車の平均取引価格を第2四半期から300ドル引き下げ、4万ドルを超える価格帯の車両構成比を下げた。中古車在庫の80%以上が下取りまたは直接買い取りによって調達され、オークション経由はわずか10%にとどまった。

経営陣は、新車、中古車、アフターサービスのいずれの分野においても、価格の購入しやすさ（アフォーダビリティ）が引き続き制約要因となっていると述べた。これ以上の値上げの余地はないとみており、整備・修理費用における価格競争力を維持する方針である。

アフターサービス

グループ1は全米における顧客負担売上高および修理注文数で過去最高を記録した。既存店の顧客負担修理注文数は4.2%増加し、修理注文1件当たりの作業時間は1.4%減少したものの、1件当たりの売上高は0.5%増加した。

17.76ドルのオイル交換キャンペーンにより3万6,000人以上の顧客を獲得した。それらの来店における平均修理注文額は180ドルであった。高額な修理費用に対するファイナンス申し込みは、前年同期比7%増の1万2,200件となった。

同社は年初来累計で6万2,000件近くの「ONE Care」割引メンテナンスプランを販売し、2026年通期では約10万件に達すると見込んでいる。整備士の生産性は7.2%向上し、サービスアドバイザーの離職率は前年同期比で6%低下した。

保証売上高は、前年同期に16%増を記録した比較対照に対して横ばいとなった。事故修理の売上高および売上総利益は、グループ1が設備・要員を従来の整備作業に再配分し、目標収益率に届かない拠点を取り壊し・閉鎖したため、それぞれ14%減、12%減となった。

F&Iおよびリブランディング

バーチャルF&Iは全米70店舗で運用されている。売上総利益に対するF&I報酬の割合は前年同期比で100ベーシスポイント低下した。また、グループ1は一部のメンテナンス商品やF&I商品に自社ブランドを付与し始めており、引き受けリスクはサードパーティの管理会社が引き続き負っている。

ブランド統一を実施した地域市場において、既存顧客におけるグループ1のブランド認知度は従来の店舗名と同水準に達した。それらの市場における新車販売実績は、ブランド未統一の市場よりも前年同期比で約2ポイント良好であった。全店舗の約3分の1が引き続きリブランディングを控えている。

ヘネシー買収およびポートフォリオ最適化

ヘネシーの買収は2026年第4四半期初頭に完了した。これにより、10店舗のディーラー、約2万2,000台の自動車販売台数、年間換算で17億ドルの売上高、および約7%の調整後EBITDAマージンが追加される。

この買収により500のサービス作業ベイと280人の整備士も加わり、グループ1の全米におけるサービスベイ数は10%以上増加する。経営陣は、買収したサービスベイの約40%が現在未稼働であり、アフターサービス売上高を拡大する余地があるとしている。

グループ1は、計画中の事業売却により、約11億ドルから12億ドルの売上高および2万2,000台の販売台数が減少すると見込んでいる。このプログラムは2027年半ば頃までに6億2500万ドルから6億7500万ドルの売却収入をもたらすと期待されており、取引の約半数はすでに完了しているか、最終合意段階にある。なお、このプログラムには第1四半期に完了したカリフォルニア州での事業売却は含まれていない。

英国事業

英国の既存店新車販売台数は、好調な9月のナンバープレート更新月に支えられ8%増加した。現地通貨ベースの1台当たり新車売上総利益は前年同期比で4%増加した。

現地通貨ベースの1台当たり中古車売上総利益は14%増加した一方、既存店販売台数は5%減少した。アフターサービスの売上高および売上総利益はそれぞれ7%増、4%増となった。年初来累計の調整後販管費比率（売上総利益比）は80.8%であった。

グループ1は英国で吉利（Geely）のフランチャイズを2店舗運営しており、年内に3店舗目を開設する見込みである。また、既存のLeapmotorフランチャイズに加え、2026年後半にはOmoda Jaecooフランチャイズを開設する計画である。

経営陣の見通し

経営陣は、ヘネシーの買収と計画中の事業売却により、プロフォーマベースでグループ1の調整後EBITDAマージンが約30ベーシスポイント上昇し、売上総利益に対する販管費比率が約100ベーシスポイント低下すると見込んでいる。

同社は、手元キャッシュの創出および事業売却による収入を活用し、レバレッジ比率をプロフォーマベースの約4倍から2027年半ばから後半までに目標の約3倍へと低下させる計画である。レバレッジ比率が目標に近づくにつれて自社株買いを再開する見込みである。グループ1の承認済み自社株買いプログラム枠の残額は3億600万ドルである。

経営陣は、2027年前半にヘネシーにおけるオペレーションの改善を見込んでいる。また、リブランディングやアフターサービスプログラムを含むその他の取り組みが、2026年第4四半期および2027年第1四半期に継続的に寄与すると期待している。

全米のアフターサービスについて、経営陣は、販売台数の多かった2023年および2024年に販売された車両がディーラーのサービスチャネルに入り始めるため、今後約12か月間で顧客基盤の再構築が進むと見込んでいる。

リスクおよび注視すべき分野

• 金利、負の株式（ネガティブ・エクイティ）、保有コスト、融資条件などを背景に、購入しやすさ（アフォーダビリティ）への圧力が引き続き重荷となっている。
• 経営陣はアフターサービスにおける追加の値上げ余地はほとんどないとみており、顧客維持、修理注文数の増加、および生産性の重要性が高まっている。
• 全米の中古車販売台数は依然として伸び悩んでおり、仕入れ競争および調達コストが引き続き事業を圧迫している。
• アフターサービスの伸びは、保証修理の伸び悩み、2020～2022年の販売期間の車両のサービスチャネル入庫減少、および中古車販売減少に伴う社内再商品化作業の減少によって制限されている。
• ヘネシー買収に伴いプロフォーマのレバレッジ比率が上昇したため、負債の削減が同社の当面の資本配分における最優先課題となっている。
• 経営陣は、業界全体の販売減少、関税、貿易政策、在庫供給、買収統合、自動車メーカーとの関係など、より広範なリスクを挙げた。

アナリスト質疑応答のハイライト

経営陣は、ヘネシー関連の事業売却プログラムが2027年半ば頃までに11億ドルから12億ドルの売上高減少と6億2500万ドルから6億7500万ドルの売却収入を目指していることを明確にした。追加の事業売却も可能であるが、戦略的適合性が引き続き最優先の考慮事項となる。

アフターサービスについて、経営陣は17.76ドルのオイル交換オファーがサービス価格を全体的に引き下げるためではなく顧客を呼び込むための施策であると説明した。このキャンペーンにより3万6,000件の来店と180ドルの平均修理注文額が創出された。

グループ1によると、認定中古車（CPO）は同社の中古車事業の28%を占めている。CPO車両は再商品化コストが高いため一般的に販売時点の売上総利益は低くなるが、長期的な顧客維持を支える効果がある。

ヘネシーによりランドローバーやポルシェといった高粗利ブランドが追加されるため、経営陣はポートフォリオの変更によって全社的な1台当たり車両売上総利益が増加すると見込んでいる。アフターサービスのマージンは、売上増とともに概ね同水準を維持する見通しである。

英国において、経営陣は売上高の成長と、売上総利益に対する販管費比率を約80%へ引き下げることに引き続き注力している。また、イングランド北部のジャガー店舗は約5000万ポンドですでに売却された一方、業績が好調な南部拠点は維持したことを確認した。

決算説明会 全文文字起こし

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決算説明会の完全なトランスクリプト

経営陣による説明

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.

質疑応答

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.