AutoCanada Q1 2026 Earnings Report

AutoCanada EPS Results

• Actual EPS: C$0.21
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

AutoCanada Revenue Results

• Actual Revenue: $1.19 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

AutoCanada Announcement Details

• Quarter: Q1 2026
• Date: 5/13/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, May 13, 2026
• Conference Call Time: 6:00PM ET

AutoCanada (TSE:ACQ) Inc operates car dealerships in Canada. The company offers new and used vehicles, spare parts, maintenance services, and customer financing. AutoCanada retails brands such as Chrysler, Dodge, Jeep, Ram, Cadillac, Chevrolet, Buick, GMC, Audi, Volkswagen, BMW, Mini, Infiniti, Nissan, Hyundai, Kia, Fiat, Mitsubishi, and Subaru. The majority of revenue is generated in the new-vehicles sales segment.

AutoCanada Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: AutoCanada reported Q1 adjusted EBITDA from continuing operations of CAD 31 million, down from CAD 43 million a year ago, with results described as largely in line with expectations but below long-term targets.
• Positive Sentiment: Management said it is seeing early signs of operational improvement in the dealership business, especially in used vehicle volumes and profitability, with March through May trends improving sequentially.
• Negative Sentiment: Used vehicle profitability remained the main pressure point, with Q1 used gross profit per unit at CAD -48 as the company worked through aged inventory in a highly competitive market.
• Positive Sentiment: The collision segment continued to grow, with gross profit up year over year, and management highlighted strong underlying demand, OEM certifications, insurer relationships, and the acquisition of Modern Auto Body in Edmonton.
• Positive Sentiment: AutoCanada made progress on balance sheet improvement through U.S. dealership divestitures, with about CAD 65.8 million in gross proceeds received so far and roughly CAD 130 million expected in total, mostly for debt reduction; it also extended its credit facility through 2028.

Presentation

[Operator]

Thank you for joining AutoCanada's Conference Call to discuss the financial results for the first quarter of 2026. I'm Ludy, your moderator for today's call. Before we begin, I'd like to remind everyone that today's discussion may include forward-looking statements, which are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. I encourage you to review AutoCanada's filings on SEDAR+ for a discussion of these risks, the first quarter news release, financial statements, and MD&A. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. I'd now like to turn the call over to Mr. Samuel Cochrane, Chief Executive Officer and Interim Chief Financial Officer of AutoCanada Inc You may begin.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Good evening, everyone, and thank you for joining us. Before discussing our quarter, I want to begin with a few comments on the broader operating environment. As we move through the first quarter and into the early part of the second quarter, the Canadian automotive market remains soft. Industry demand for new light vehicles continued to decline year-over-year as consumers faced elevated vehicle pricing, persistent affordability concerns, rising fuel costs, and broader macroeconomic uncertainty. Fuel prices are an important factor to monitor closely. Higher fuel costs can influence consumer appetite for vehicle purchases, impact discretionary spending on service and maintenance, which can sometimes be deferred, and even affect kilometers driven, which has implications for collision demand over time. While collision remains a resilient business, we are mindful that consumer behavior can shift in this type of environment.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Against that backdrop, our first quarter results were largely as expected, with adjusted EBITDA from continuing operations of CAD 31 million compared to CAD 43 million in the prior year. The CAD 31 million in adjusted EBITDA included a CAD 5 million forfeiture of share-based compensation expense related to departing executives. These results are below our long-term expectations for the business. That being said, we saw meaningful progress towards rebuilding sales productivity in our dealership business late in the quarter and into April, and I am encouraged by the momentum being built by Fade and his team. We also continue to see growth in our core collision business despite the hail business lagging due to reduced storm activity and are set up well for continued collision expansion. In the automotive retail business, the largest area of pressure continued to be used vehicle profitability.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Used vehicle gross profit per unit was CAD -48 in the quarter as we worked through aged inventory and operated in a broader used market that remained highly competitive and margin-challenged. We expect used gross profit per unit to improve sequentially over the year as we enhance the tools and analytics available to our buyers, which will improve sourcing, build better merchandising habits, and increase the speed of our reconditioning. At the same time, there were several important positives and areas of progress during the quarter that reinforce why we believe the automotive retail business is moving in the right direction operationally. The key theme for Q1 was restoring operational adequacy and stability. Since the leadership changes implemented in mid-February, we have taken decisive actions to simplify the organization and get closer to our core operations, improve accountability, strengthen operational oversight, and refocus the business on execution fundamentals.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

This work is still early, but we are beginning to see encouraging signs. March and April showed sequential improvement in used vehicle profitability trends supported by stronger sales productivity and better inventory pricing and management. We also added regional and functional leadership during the quarter who are both experienced Canadian automotive executives. They will focus on strengthening performance management and accountability at the dealerships. Our view is straightforward. While macro conditions are outside of our control, operational execution is not. Our automotive retail priorities remain centered on the key controllable drivers of the business, improving sales productivity and conversion, rebuilding used vehicle margins, increasing fixed operation absorption and service bay utilization, improving inventory discipline and working capital efficiency, and maintaining expense discipline while we grow our top line. We believe these actions are establishing a stronger operational foundation that will allow the business to perform more consistently.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Turning to collision operations, this continues to be a strategically important part of the company. Collision gross profit increased year-over-year and margins remained strong despite a challenging comparison related to elevated hail activity in the prior year. In the first half of 2025, we worked through a significant backlog of hail-related repairs stemming from the catastrophic Calgary storm in July 2024. The quarter was also impacted by the recent opening of three new collision centers, which are still ramping towards full utilization. Together, the difficult hail comparison and the added costs associated with these new facilities account for approximately CAD 2.5 million of the year-over-year decline in collision EBITDA this quarter. The underlying traditional collision business continues to perform well, supported by strong insurance-related demand, expanding OEM certifications, and growing insurer relationships.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

During the quarter, we completed the acquisition of Modern Auto Body in Edmonton, which expands our regional density and enhances OEM certifications in an important market. Modern Auto Body did not have any insurance partners at the time of closing, which is one of the areas of synergies we are focused on post-closing. We continue to view collision as a highly attractive long-term growth platform due to its resilient margin profile, fragmented market structure, and strong consolidation opportunities. Importantly, our strategy here remains disciplined, and we intend to continue pursuing targeted accretive collision acquisitions focused on regional density, OEM certification capabilities, and long-term margin expansion. Art and the team have demonstrated an ability to meaningfully improve both cost and revenue post-acquisition.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Operationally, several important initiatives are also underway within collision, including expanding OEM certifications, increasing insurance DRP partnerships, scaling apprenticeship and technician development programs, advancing a national operating model, expanding higher margin services such as diagnostics, calibrations, and coatings, and continuing the rollout of our national collision brand strategy. These initiatives are intended to improve long-term operating leverage, margin stability, and referral volumes across the platform. Turning to the balance sheet, strengthening financial flexibility and reducing leverage remained a major priority during the quarter. We continued to make meaningful progress on the divestiture of our U.S. dealership portfolio. To date, we have received approximately CAD 65.8 million in gross proceeds from completed transactions and continue to expect total proceeds of approximately CAD 130 million upon completion of the remaining divestitures.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

These proceeds are expected to be directed primarily toward debt reduction, further strengthening the balance sheet. Subsequent to quarter end, we also completed an amended and extended syndicated credit facility that improves our financial flexibility, extends maturity through 2028, simplifies the structure of the facility, and provides additional operating flexibility while we continue executing our initiatives. Our capital allocation philosophy is grounded in maximizing long-term shareholder value while protecting balance sheet flexibility. In the near term, this means prioritizing debt reduction, high return operational investments, selective collision acquisitions, and opportunistic share repurchases where appropriate. We are approaching all capital decisions with a strong emphasis on return thresholds, liquidity preservation, and strategic fit. As we look ahead, we expect 2026 to remain a transitional year for the dealership business and growth focus for our collision business.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Near-term market conditions are likely to remain challenging, and consumer affordability pressures continue to impact demand trends. However, we also believe the company is approaching an operational inflection point. The actions taken during Q1 to stabilize operations, improve leadership accountability, streamline costs, strengthen the balance sheet, and sharpen strategic focus are beginning to create momentum inside the organization. Our focus remains squarely on creating value by stabilizing and improving the automotive retail business. We believe the automotive retail business is beginning to stabilize, and we are seeing early signs of improvement, especially in used volumes and profitability, and therefore are cautiously optimistic about the quarters ahead. Pursuing disciplined inorganic and organic growth in our collision business. Our core collision business continues to grow, and even though we have seen reduced hail activity, we are well-positioned for the hail season to start.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

On the inorganic side, we continue to build our pipeline with many exciting opportunities, and we expect to be active on the M&A front this year. Improving the services provided by the store support center to our dealerships and collision centers. This will be one of the major priorities of the new CFO who was just hired. I'm looking forward to having Mike join the team. He will add a lot of horsepower. Strengthening our recruitment and retention of top operational leaders across the country. As discussed above, we added seasoned Canadian automotive talent to the team this year, and we will continue to focus on building and retaining the best operating team in the industry. Lastly, maintaining a lean cost structure. We continue to identify and execute on opportunities to downsize our corporate costs while improving service levels to the operating business.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

This relentless focus will build a stronger, more disciplined, and more resilient AutoCanada, one with better operational consistency, a solid balance sheet, growing collision scale, and improved long-term earnings quality. While there is still meaningful work ahead, we believe the foundation being established today positions the company to deliver stronger and more sustainable performance over time. I want to end the call by thanking our employees. You are all AutoCanada, and I thank you for your commitment to our customers, stakeholders, and to each other. Together, we will build an iconic automotive company right here in Canada. With that, operator, please open the line for questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session to ask a question you will press star followed by number one on your telephone keypad, to withdraw your question please press star two. With that, our first question comes from the line of Chris Murray with ATB Cormark Capital Markets. Please go ahead.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah. Thanks, Sam. Good evening. Maybe just starting with some of the unit metrics, both in terms of sales and GPU. You did mention in your script that you thought that Q1 was probably, I don't know if a trough is the right way to describe it, but certainly an inflection point, and you were somewhat cautiously optimistic. A couple pieces of this question. One,

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Sorry.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Should we take we have these numbers as a bit of a flush, if you will, and we'll get back to more normalized numbers? I guess the other piece of this is, at what point would you think you would be at least back at kinda market rates over the coming year?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah. Thanks, Chris. Part of that question cut out for me. I'm not sure if that happened for everyone, but I think you were asking, was this sort of a flush, and when do we get back to sort of normal numbers? I believe that was the essence of the question, right?

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah, that was it. Thank you.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Okay. As we discussed in March at year-end, this quarter was basically as expected. It was a little bit better. Actually, March picked up volumes a little bit better than expected, which is why the sort of even though it was a little bit stronger than I would have thought in mid-March. Those trends, those positive trends, especially on the used GPUs and volumes, are continuing into April and May. That's a very positive sign, which makes us cautiously optimistic. Like I said back in March, what you're gonna see in the short term is volumes pick up. GPUs are gonna remain compressed in the first half of the year, although they're gonna get better from here, right? Q2 will be better than Q1.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

I think used GPUs will start to normalize in the second half. On the new side and the parts and service side, I think it'll be, you know, more, you know, 9-12 months for those to sort of get back to normal conditions. You know, build up the product knowledge. We got to recruit more techs on the fixed ops side. We just hired a new team on the RVP side and on the fixed ops side that are just getting onboarded now. Some time to sort of rebuild the cadence there. You know, going into 2027, you know, we should be on a more normalized basis for sure. You'll see quicker improvement on the used side, like you know, even next quarter. Hopefully that answers your question.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Same as I said in March, basically.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah. Sorry that, the question as I asked it, cut out. The other question was about inventory levels, and do you feel comfortable that, you've kinda right-sized the inventory levels to give you enough inventory for sell-through as we go into Q2 and Q3?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah, great question. The really impressive part of what the team's done, what Shane and the team has done is not only sort of got through sort of problem used cars, aged used cars, basically used cars that don't have enough profit on them. We've actually improved the age at the same time, and now have way better profitability in our used cars in April and in May, and even in late March. Definitely going to see improvements there, and the aging is getting better. In the second half of the year, it's going to be and going into the end of the year, it's going to be clean.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Okay. The other question I had is kind of like a bigger, maybe strategic one. You know, you talked, I think the last, the last call we did, you know, you indicated that you thought it would be about a 12-18 month period for the turnaround, which would sort of put you into kinda later 2027. It sounds like you're still thinking that's going to be the issue, how much of the turnaround is conducive or tied to kind of the broader economy, and how much do you really believe is within your control?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah. Listen, we can't control the macro, right? The macro is soft. You know, coast to coast, volumes are down, we're running uphill. A lot of the improvements we're making internally are things that we can control in execution, right? Bringing in a, for the first time ever, bringing in a leader on the fixed side, who can identify strategies around recruiting more tech, right? Which will, you know, drive better service bay utilization, right? We just don't have enough techs, right? We didn't have the right focus on that. That's a CAD 20 million opportunity on the fixed side, and we control that. Used car side as well, right? We how well we position them for sale and price them.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

There's a lot of things in our control that we can make better, and that gives me confidence. The macro will be what it is, Chris, but there's a lot that we can control to make the business better. When I say 12-18 months, yeah, that's right. The macro will do what it will do, but we will be operating in our normal teams by then, and we can be judged against the market at that time. Does that make sense?

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah, it does. Thanks. I'll leave it there.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

All right.

[Operator]

Thank you. Once again, if you would like to ask a question, simply press star one on your telephone keypad. Your next question comes from the line of Luke Hannan with Canaccord Genuity. Please go ahead.

[Luke Hannan, Analyst at Canaccord Genuity]

Yeah, thanks. Good evening, Sam. I wanted to follow back the commentary that you had in your prepared remarks. Also, I think you talked about this in the MD&A. The fact that the market was down, speaking on new vehicles, the market was down mid-single digits into April. When it comes to the mix, I know you just talked about it in response to Chris's questions there when it comes to the inventory. I'm thinking specifically when it comes to new vehicles and specifically when it comes to mix. I know in the past that's been a bit of a headwind when it comes to outperforming the Canadian market. How much has that delta changed or collapsed, I guess, since now you've undertaken some measured efforts to clean up that inventory? Hello?

[Operator]

Please stand by for a moment. Thank you.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Hello, can you hear me?

[Luke Hannan, Analyst at Canaccord Genuity]

Yeah. Can you hear me, Sam?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

I don't know what was happening there. Sorry about that.

[Luke Hannan, Analyst at Canaccord Genuity]

All good. I'll just ask my question again, I guess so.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Okay.

[Luke Hannan, Analyst at Canaccord Genuity]

Yeah. What I was asking about is, you talked about in your scripts the market, I'm just talking about new vehicles. The market was down mid-single digits in April. I was just curious to know, I know before in the past when it comes to the mix of brands that you have in new, that had been a bit of a drag for you previously. Has that issue, I guess, been cleaned up? I guess really what the question here is, before AutoCanada has had a history of outperforming the new vehicle market, are you closer to doing that today than you were, let's say, three or six months ago?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

We are closer. There's still more to do, right? We gotta rebuild the team and the product knowledge. A lot was lost in the turnover in the last year. The other thing we need to do is get quite high. That is positive, but the negative side of that is could we have sold more cars if we sort of let go a little bit more of gross, right? Volume on new and hitting our OEM targets with more consistency. Yes, we're closer. I do still think you're not gonna see it overnight on the new side. As I said in the past, you'll see quicker improvements on the used side, used GPUs, and then the new and parts and service more late second half of the year. Yes, we're closer for sure.

[Luke Hannan, Analyst at Canaccord Genuity]

Okay. Also I want to follow up on the U.S. divestitures. I know that there's been a change, or there was a change in the past when it comes to the cadence of when you actually expect that cash to come into the door. Last quarter there was a change. Has there been any change since last quarter on when you actually expect to collect the cash here?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

There should be another deal that happens in the summer, and then the rest should be in the fall.

[Luke Hannan, Analyst at Canaccord Genuity]

Okay. Then just as far as the weighting, you know, how much is most of that gonna be coming in the summer? Most of that gonna be coming in the fall?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

A big chunk is, probably coming in the summer and then, the rest will trail in the fall.

[Luke Hannan, Analyst at Canaccord Genuity]

Yeah. Okay. Then maybe last, used has been it feels like for a long time there's been peaks and valleys, we'll say in used. I realize that there's a lot of moving parts. There's a lot that's changed in the used part of the business. I guess specifically what I'm trying to figure out is what is being done differently now on sourcing that's improved overall GPU. I know there's a lot that's going on when it comes to reconditioning and maybe selling cars at better prices, I'm curious more.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah.

[Luke Hannan, Analyst at Canaccord Genuity]

Yeah, go ahead. I'm just curious more specifically, what has changed when it comes to sourcing vehicles that's allowed you to realize improvements in GPU?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah, no, great question. For example, in the past, there was our buying, our used buyers, whether they were GMs or other people at dealerships, they were buying cars without the right analytics and tools to be able to ensure a minimum profit on the car, like a minimum standard of profit. We've been rolling out buy box to all the stores that basically, you know, shows them the minimum acceptable profit that you can make on the car before you buy it. Really we're empowering the people buying cars with better data so they can make better decisions. That's helping a lot, right? There's other tactics that we're looking at, whether it's through, you know, Throttle or increasing trade-ins with, you know, service lane acquisitions.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

A lot of it is really just better information to help them make better decisions.

[Luke Hannan, Analyst at Canaccord Genuity]

Is there any change also when it comes to incentives, either there or elsewhere in the organization that's helped bring in new talent?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Not incentives, no. Just people for sure are joining the team to help, but no big change in incentives, no.

[Luke Hannan, Analyst at Canaccord Genuity]

Okay. Okay, I'll leave it there. Thanks.

[Operator]

Thank you. The next question comes from the line of Ty Collin with CIBC. Please go ahead.

[Ty Collin, Analyst at CIBC]

Hey, good evening, Sam. Thanks for taking my question. Maybe just to start off, can you maybe give a little bit more color on what was behind the improvement in new vehicle GPU in the quarter, both sequentially and year-over-year? I think the MD&A references higher pricing as a factor, was there anything else to call out, anything, you know, mix related or quarter specific? Is this kind of a, you know, a decent run rate for the rest of the year?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

No, Ty, on the new side, on the GPUs, I actually think they're a bit too high. I think probably if we let go a bit more of that number, we could have driven a lot more volume. I wouldn't take that as a run rate. I would expect that to come down over the year, and I expect our volume to increase. I think we gotta capture more of the market and be a bit more aggressive on our pricing.

[Ty Collin, Analyst at CIBC]

Okay, that's helpful. Maybe on used GPU, you know, I know earlier in the call you laid out your expectation that you know, you see some sequential improvement in Q2 and throughout the rest of the year. You also called out just some general market related pressures on used vehicle profitability. Is there sort of an absolute level of used vehicle GPU that you're striving to get back to? What would that be and when do you think you can get there?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Yeah, listen, I think, I think on the front we gotta get back to around thousands at least, the minimum acceptable standard. I expect, you know, market depending, can't control the macro all the time, but I expect to be there in the, in the late second half of the year. You know, it's not like there'll be progression along the way, right? You'll see improvements in Q2 and then improvements again in Q3.

[Ty Collin, Analyst at CIBC]

Okay, that's really helpful. Yeah, and then maybe just last thing. Can you clarify the comment earlier in the call? I think you'd made a reference to the hail event representing around two and a half million CAD worth of the year-over-year decline in collision repair. Can you maybe just clarify that comment?

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Sure. There was a catastrophic storm in July of 2024 in Calgary, there was a huge backlog of work for our hail business. That carried us all the way almost through 2025, honestly, to the point where our revenue was a record in hail. We had to give a bit back on margin because we actually had to outsource some of the repairs because the volume was too high. Now the storms have been really light in 2025 and so far in 2026. There's a drastic decrease in hail revenue. Like just for example, Q1 last year was around CAD 8 million in hail revenue, this year was around CAD 1 million for the quarter. Hail was a big headwind.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

The other headwind is we have three new facilities, beautiful facilities that we've opened up. We're really excited about them, but we're ramping them up to full utilization. There's a bit of drag on margin as we ramp up those new facilities. That's that two and a half I was talking about.

[Ty Collin, Analyst at CIBC]

Okay, great. Thank you so much.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Our actual core collision business continues to grow, which is fantastic.

[Ty Collin, Analyst at CIBC]

Yeah. Yeah. Okay, got it. All right. Thanks, Sam. All the best.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Thank you.

[Operator]

Thank you. I'm showing no further questions at this time. I would like to turn it back to Mr. Samuel Cochrane for closing remarks.

[Samuel Cochrane, CEO and Interim CFO at AutoCanada]

Thank you everyone for joining the call and looking forward to updating you next quarter. Have a good one.

[Operator]

Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Samuel Cochrane, CEO and Interim CFO

Analysts

• Chris Murray, Analyst at ATB Cormark Capital Markets
• Luke Hannan, Analyst at Canaccord Genuity
• Ty Collin, Analyst at CIBC