Q2 2026 Penske Automotive Group Inc Earnings Call Transcript
Key Points
- Penske Automotive Group Inc (PAG) reported a strong second quarter with revenue up 6% to $8.5 billion and earnings per share of $3.96.
- The company saw a 5% increase in same-store retail new and used units, with strong gross profit per unit in both new and used vehicles.
- Service and parts revenue grew 2% with a 60 basis point improvement in gross margin, indicating strong aftermarket demand.
- The commercial truck market is recovering, with Class 8 orders up 170% and a strong order book expected to boost retail sales in the second half of 2026.
- Penske Transportation Solutions (PTS) equity income increased 7% to $57 million, driven by higher fleet utilization and lower operating costs.
- The company reduced long-term debt by $141 million and increased its quarterly dividend for the 23rd consecutive quarter.
- International operations, particularly in the UK and Australia, showed resilience with same-store revenue up 10% and strong growth in off-highway and energy solutions.
- The UK automotive market remains challenging due to higher taxes, consumer affordability issues, and government mandates toward electrification.
- PTS rental revenue declined 12% and gain on sale of used trucks decreased by $13 million due to fleet rightsizing.
- SG&A expenses increased 3% and as a percentage of gross profit rose to 71.8% from 69.8% year-over-year, driven by higher personnel and IT costs.
- New vehicle inventory is at a 51-day supply, with premium brands at 58 days, indicating potential overstocking.
- The company faces headwinds from Chinese brands gaining market share in the UK, though this primarily affects lower-cost vehicles.
- Interest expense increased $6 million due to higher borrowing costs from acquisitions, with a 25 basis point rate change impacting expense by $15 million.
Good afternoon. Welcome to the Penske Automotive Group second quarter 2026 earnings conference call. Today's call is being recorded and will be available for replay approximately one hour after completion through August 5, 2026 on the company's website under the investors tab at www.penskeautomotive.com.
I will now introduce Anthony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.
Thank you, Lea. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's second quarter 2026 financial results was issued this morning and is posted on our website along with the presentation designed to assist you in understanding the company's results.
Joining me for today's call are Roger Penske, Chairman's CEO; and Shelley Hulgrave, EVP and Chief
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