ABG

Techion DMS Rollout

• 70% of stores have completed conversion to the new Techion DMS platform as of Q2 end, with full rollout on track to complete by October 2026
• Stores 5+ months post-conversion show consistent operational improvements: mature converted markets saw 12% higher average units per salesperson and 10% higher revenue per technician in June; Kuhn's stores saw 14.2% QoQ productivity growth for sales managers and 15.2% QoQ growth for F&I managers
• The rollout is creating short-term frictional, duplicate system, and one-time implementation costs that will ease as conversion completes and stores gain proficiency
• The unified single-ecosystem platform eliminates multiple logins for technicians and advisors, streamlining workflow, improving communication across departments, and enhancing the guest experience, which drives higher service approval rates

Strategic Priorities (Five Pillars)

• Increase new vehicle market share; re-establish consistent customer paid gross profit growth; drive profitable used vehicle volume growth; manage SG&A costs; leverage technology across the business
• No change in long-term strategic direction, just sharpened execution to drive shareholder growth and returns

Capital Allocation

• Continued aggressive share repurchases, as management views Asbury stock as an attractive long-term investment; 7% of 2025 ending share count has been repurchased in the first half of 2026, with 1.35 million shares repurchased year-to-date for $278 million, including 668,000 shares for $131 million in Q2
• Temporary higher leverage (3.4x net leverage at quarter-end) is strategic; the 3.0x target leverage ratio remains a priority, with achievement expected in early to mid-2027
• Full year 2026 CapEx is expected to be ~$250 million, in line with prior plans
• M&A activity is currently deprioritized; management views share repurchases as higher returning for shareholders than available acquisition targets at current valuations, with focus remaining on Techion rollout and same-store operational improvements

Used Vehicle Strategy Update

• Prior strategy prioritized gross profit over volume; in May 2026, management began a gradual shift to growing volume while maintaining healthy PVRs
• The shift is timed to align with growing off-lease supply, which allows Asbury (as a franchise dealer) first access to off-lease vehicles at better acquisition prices than open auction purchases; additional inventory comes from retiring loaner fleet vehicles, most of which can be sold as certified pre-owned
• Volume increases are being rolled out gradually to avoid overbuying inventory ahead of typical fall used vehicle price declines in September/October

Operational Efficiency

• Q2 all-store adjusted SG&A as a percentage of gross profit was 66%, in line with expectations and a 260 basis point improvement over Q1 2026
• The company continues to invest in AI across all departments to improve efficiency, support team members, and enhance the guest experience

• Full Techion DMS rollout across all remaining 30% of stores will be completed by October 2026, with cost savings starting to be realized in late 2026 and accelerating into 2027
• SG&A as a percentage of gross profit is expected to see gradual quarterly improvement through 2026 and 2027, reaching the low 60% range by the end of 2027
• Used vehicle volume is expected to increase meaningfully by Q4 2026 as the new volume-focused strategy rolls out across the organization
• Customer paid parts and service growth is expected to return to low to mid-single digit levels in H2 2026 as more stores exit the 5-6 month post-conversion transition window
• Long-term normalized customer pay parts and service growth is expected to remain in the single digits
• 3.0x net leverage target will be reached in early to mid-2027
• Full year 2026 CapEx is maintained at ~$250 million

Overall Q2 2026 revenue was $4.4 billion, with gross profit of $753 million, gross margin of 17.2%, adjusted operating margin of 5.3%, adjusted net income of $125 million, adjusted EBITDA of $235 million, and adjusted EPS of $6.82.

• New vehicles: Same-store unit sales were down 6% YoY. Same-store PVR was $2,896, all-store PVR was $3,124. Sequential declines have flattened, approaching normalized levels. Quarter-end new vehicle day supply was 53 days, a healthy level. By segment, luxury same-store volume was down 10% YoY, imports were flat, domestic was down 16% YoY.
• Used vehicles: Retail PVR was $1,927, a 5% sequential increase on roughly flat same-store volume versus Q1. Quarter-end day supply was 37 days, up from 30 days in Q1, with 70% of inventory less than 30 days old.
• F&I: F&I PVR was $2,214, bringing total front-end yield per vehicle to $4,698.
• Parts and service: Customer-paid business was flat YoY, with total gross profit slightly down. June same-store fixed gross profit was up 4% YoY. 5-6 months post-Techion conversion is required for full operational improvements, so most transition stores are still within the improvement window.

• Short-term operational disruptions and productivity dips occur during the Techion conversion window, particularly for parts and service operations, which have delayed the return to consistent customer paid growth
• Unexpected market volatility can impact vehicle pricing, inventory values, and consumer demand for both new and used vehicles
• Consumer affordability concerns could potentially impact service traffic, though management has not seen material impact to date
• Used vehicle prices typically decline in the fall, creating risk of markdowns if inventory is accumulated too aggressively ahead of this seasonal shift
• Negative consumer equity can prevent some trade-ins and vehicle purchases, though management notes this has not risen above historical norms

Q: What portion of the 6% same-store new vehicle sales decline is tied to Techion conversion versus market factors? How do you explain the larger decline in used vehicle sales versus new?

A: Techion conversion creates a short-term productivity dip for sales teams while they learn the new system, but sales recover much faster than in service. Additional factors impacting new vehicle sales include ongoing inventory mix adjustments at Stellantis stores (which are down 28% QoQ) and last year's pull forward of EV demand ahead of expiring incentives. For used vehicles, the larger decline is intentional: the company maintained a volume-restrictive, profit-focused strategy through Q2, and is only now gradually increasing volume in preparation for Q4 growth, with intentional disciplined inventory sourcing to avoid pre-fall overbuying.

Q: Given that the converted Georgia and Florida stores have had 5+ months to mature, what SG&A and operational improvements are you seeing, and will SG&A continue to decline through H2 2026?

A: Management does not have exact SG&A figures for the mature converted stores, but has measured large productivity improvements across roles: Kuhn's stores saw 14.2% QoQ growth in units per sales manager and 15.2% QoQ growth in units per F&I manager. While Q3 will see higher frictional costs due to the high volume of remaining conversions, SG&A as a percentage of gross profit is expected to decline steadily each quarter through the end of 2027, when it will reach the guided low 60% range.

Q: What is driving the slower pace of Techion rollout in Q2, and what operational efficiencies from the new DMS drive technician productivity gains?

A: The slower Q2 rollout was planned: the large Herb Chambers acquisition was converted in March/April, so the company paused new rollouts in May to help that group absorb all concurrent changes, and will complete the full 30% remaining conversion by October as originally planned. The key efficiency gain comes from Techion's unified ecosystem: legacy systems required multiple logins across separate DMS and third-party bolt-on tools, which slowed technicians and advisors. The unified platform streamlines workflow and communication, cuts down on system switching, and speeds up service estimate sharing with guests, leading to higher approval rates and higher revenue per technician.

Q: What is your outlook for M&A given the attractive market for dealer assets and your current leverage above target?

A: Management continues to evaluate potential deals, but near-term priorities are completing the Techion rollout and improving same-store operations. At current Asbury share prices, management calculates that share repurchases deliver higher returns for shareholders than most available acquisition targets, so M&A is deprioritized for the near term. The relative attractiveness of M&A versus buybacks may shift if share prices return to more normalized levels.