Penske Automotive Group NYSE: PAG reported what Chairman and CEO Roger Penske called a “solid and productive” first quarter of 2026, as the dealership group navigated difficult year-over-year comparisons and weather-related disruption while posting record first-quarter service and parts performance.
Quarterly results included dealership sale gain
Penske said the company delivered more than 123,000 new and used vehicles and nearly 3,600 new and used commercial trucks during the quarter, generating about $7.9 billion in revenue. The company reported $324 million in earnings before taxes and $235 million in net income, with earnings per share of $3.56.
Results included a $60 million gain on the sale of a dealership, partially offset by $13 million in disposals and other charges tied to portfolio optimization. Excluding those items, Penske said adjusted earnings before taxes were $276 million, adjusted net income was $201 million, and adjusted EPS was $3.05.
Retail auto: weather, tariffs and EV dynamics weighed on unit comparisons
On a same-store basis, Penske said retail automotive new units declined 5% while used units increased 1%. Penske attributed results to “weather-related challenges” and a difficult comparison to March 2025, when “tariffs caused pull-ahead sales,” as well as lower battery-electric vehicle (BEV) sales tied to the elimination of a BEV tax credit in the U.S.
COO of North American Operations Rich Shearing provided additional detail, saying two major winter storms led to delayed openings and closures across a wide swath of the U.S. He estimated the weather reduced fixed gross by roughly $4 million to $5 million and created “in total overall, about a $6 million impact to our earnings in Q1.”
Shearing also said BEV sales were down 61% year over year in the first quarter and described demand as stable at roughly “4% to 5% of the overall…retail sales market” after the tax credit expiration. He said he did not expect a material change in BEV demand for the balance of the year, citing consumer concerns around range and charging infrastructure.
Despite unit pressure, gross profit per unit improved sequentially. Penske said gross profit per new vehicle retailed was $4,783, up $94 from the prior quarter, and gross profit per used unit was $2,076, up $306 sequentially.
Service and parts hit a Q1 record; technician capacity improved
Penske said service and parts revenue and gross profit set a first-quarter record, with same-store revenue up 4.6% and gross profit up 5.7%. Service and parts gross margin increased 60 basis points.
In the U.S., Shearing said same-store service and parts revenue rose 3.2% and gross profit increased 3.4%. He noted customer pay was up 4% and warranty was up 5%, while collision repair declined 4%. The company’s U.S. technician count increased 3% compared to the end of March last year, and bay utilization was 84%.
Asked why utilization is not higher, Shearing said bay utilization is constrained by technician-to-bay ratios and parts availability, and that reaching 100% is unrealistic given repair complexity and workflow. Penske added that larger repair jobs can require multiple bays.
Commercial trucks: weak Q1, but management pointed to improving order trends
In the retail commercial truck segment, Penske said first-quarter unit sales declined by 953 units, driven by reduced order intake in the second half of 2025 amid tariffs and freight market weakness. Still, he said the company is “encouraged” by trends in new truck orders, with expected deliveries in the second half of 2026.
Shearing said Premier Truck Group retailed 3,583 new and used trucks, generated $695 million in revenue, and delivered $128 million in gross profit. New unit sales fell 26% and tracked the broader North American Class 8 market. He said Class 8 orders rose 91% year over year and industry backlog increased 33% to 175,000 units in the first quarter, which management expects to translate to higher new unit sales in the back half of the year.
On sustainability of demand, Shearing said a portion of orders reflected greater clarity on EPA 2027 guidelines and a near-term effect from a tariff-related ordering window. He also cited what he described as structural tightening in capacity from enforcement actions against illegal carriers and non-domiciled CDL holders, pointing to higher spot rates and improved parts and service trends in the truck business.
PTS equity income rose; international operations expanded and tested Chinese brands
Penske said equity income from its Penske Transportation Solutions (PTS) investment increased 24%. Shearing reported PTS operating revenue declined 4% to $2.5 billion, with lease revenue up 2%, rental revenue down 17%, and logistics revenue down 3%. PTS sold 9,319 units and ended the quarter with a fleet size of 387,500 units, down from 435,000 at the end of December 2024. Gain on sale declined by $26 million compared with the prior year, but management said higher utilization and lower costs helped lift earnings.
During Q&A, Penske said rental utilization improved to 76% from 71% and indicated additional fleet reductions of 3,000 to 4,000 units were possible during the year. He also said the company is seeing increased customer willingness to enter long-term lease agreements after a period of pause related to emissions and cost uncertainty.
Internationally, COO Randall Seymore said revenue increased 6% to $3.3 billion, with new units up 2% and used up 3%. Same-store service and parts revenue rose 7%, driven by a 10% increase in customer pay that more than offset a 3% decline in warranty. Seymore said that excluding foreign exchange, service and parts growth was “slightly up” in the U.K., while Italy was up 11% and Germany up 20%, reflecting a focus on customer pay mix.
Seymore also discussed Chinese OEMs gaining share across Europe and Australia. He said Penske has “11 locations between the U.K. and Germany right now” representing four Chinese brands and is placing them into existing facilities—particularly Sytner Select sites in the U.K.—to limit incremental fixed expense. He described early results as positive but said the company will take a “walk before run” approach and remain cautious about over-inventorying and over-dealing. Penske said gross margins in the big-box format were currently “a couple thousand GBP more” on Chinese brands than on used vehicles sold in the same stores, while warning conditions could change.
On capital allocation, CFO Shelley Hulgrave said the company generated $215 million in operating cash flow and $397 million in EBITDA, invested $63 million in capex, and completed acquisitions of two Lexus dealerships representing $450 million in estimated annualized revenue. Penske highlighted the February acquisition of Lexus of Orlando and Lexus of Winter Park, and said those stores complement four Lexus and Toyota dealerships acquired in November 2025; collectively, the six dealerships are expected to generate $2 billion in estimated annualized revenue.
The company repurchased 170,000 shares for $26 million and raised its quarterly dividend to $1.40 per share, which Hulgrave said marked the 21st consecutive quarterly increase. She said $221 million remained available under the repurchase program as of March 31, 2026, and that since the beginning of 2023 the company has returned approximately $1.6 billion to shareholders via dividends and buybacks.
Looking ahead, Penske said retail automotive gross profit remains strong, service and parts continues to grow, and diversification remains “our key strength,” adding that “the recovery in the commercial truck market is underway.”
About Penske Automotive Group NYSE: PAG
Penske Automotive Group, Inc NYSE: PAG, headquartered in Bloomfield Township, Michigan, is an international transportation services company primarily focused on automotive and commercial truck dealerships. The company retails new and pre-owned vehicles across a broad spectrum of brands, while offering parts, maintenance, collision repair and reconditioning services. In addition, Penske provides financing and insurance products through its integrated finance and insurance operations, supporting both retail customers and commercial clients.
Formed in 1990 as United Auto Group and publicly traded since 1999, Penske Automotive Group has grown through organic expansion and strategic acquisitions to establish a network of dealerships and service centers across the United States and Europe.
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