Company: GPI
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0001031203-25-000049
Chunk: 89

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 2
Chunk 89
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 been finalized or implemented.

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Table of Contents

While the possibility exists for delays, reductions, or exemptions of the automotive and reciprocal tariffs, the potential impacts of the tariffs described above, as well as the reaction of the OEMs to such tariffs, remain uncertain and could significantly increase the price of our products as well as the future mix and demand for vehicles provided by our manufacturers. Additionally, reciprocal tariffs, tariffs on steel, aluminum, copper and other materials, and the elevated tariffs against China and other countries could negatively impact the global economy, demand for our products and our manufacturers’ global supply chains. Our manufacturers’ supply chain dependencies and production facility locations vary by OEM, and as a result, certain manufacturers, vehicle models, vehicle model variations and parts could be affected more significantly by the imposition of tariffs than others. We will continue to monitor the impact of the Trump Administration’s policies and the response of U.S. trading partners on our results of operations in future periods. 

We continue to monitor the uncertain macroeconomic and industry conditions in the U.K., including the impact of the tariff agreement between the U.S. and the U.K. outlined above. Although the effect of the macroeconomic environment on our results of operations cannot be predicted with certainty, future negative impacts may require us to assess the goodwill and intangible franchise rights associated with our U.K. reporting unit for impairment, which could result in material impairment charges in future periods.

Critical Accounting Policies and Accounting Estimates

For discussion of our critical accounting policies and accounting estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 Form 10-K. There have been no material changes to our critical accounting policies or accounting estimates since December 31, 2024.

Results of Operations

The “same store” amounts presented below include the results of dealerships and corporate headquarters for the identical months in each comparative period, commencing with the first full month in which we owned the dealership. Amounts related to divestitures are excluded from each comparative period, ending with the last full month in which we owned the dealership. Same store results provide a measurement of our ability to grow revenues and profitability of our existing stores and also provide a metric for peer group comparisons. For these reasons, same store results allow management to accurately manage and monitor the underlying performance of the business and is also useful to investors. 

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-G