Group 1 Automotive

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 13 Feb 2026, plus the 10-Q filed 30 Jul 2026 and 13 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Availability and demand for and pricing of our products and services may be adversely impacted by economic conditions, financial developments including rising inflation, high energy prices, increasing interest rates, a potential recessionary environment and other factors.

  Could happen

  While EV sales grew in prior years, EV demand began to stabilize in 2025 in the U.S. Consumers continue to express concerns with respect to access to charging infrastructure, affordability and battery range, which may limit broader adoption of EVs. If EV demand remains uncertain while OEMs continue to shift product strategies and production plans, there could be a material adverse effect on our business and results of operations. In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate and the OBBBA, which was signed into law in July 2025, eliminates multiple credits previously made available for new and used EVs. Significant shifts to increase or decrease EV demand could have material impacts on the operations of our OEM partners, which could lead to a material adverse effect on our dealership business and our results of operations. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA.

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• Increased attention to sustainability matters may adversely impact our business, reputation and access to capital.

  Could happen

  Certain public statements regarding sustainability matters are subject to increasing regulatory, litigation and political scrutiny, including allegations of “greenwashing” or challenges from so-called “anti-ESG” constituencies, which could result in investigations, enforcement actions, litigation or reputational harm. Additionally, certain employment or business practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors. The complex regulatory and legal frameworks applicable to such initiatives continue to evolve. As a result, we may face increased litigation risks from private parties and governmental authorities related to our sustainability efforts. Such sustainability-related matters may also impact our customers or suppliers, which may adversely impact our business, financial condition, or results of operations.

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• Regulatory requirements to reduce emissions in response to climate change, as well as changes in consumer demand towards fuel-efficient vehicles, and shifts in product offerings by manufacturers to meet such demand could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations.

  Could happen

  Changes in fuel prices, changes in customer preferences, government support, improvements in EVs and more EV options have increased the customer demand for more fuel-efficient vehicles and EVs. Significant increases in fuel economy requirements, new federal or state restrictions on emissions of carbon dioxide or new federal or state incentive programs that have or may be imposed on vehicles and automobile fuels could adversely affect demand for certain vehicles, annual miles driven or the products we sell. However, vehicle fuel economy standards, and the ability of federal and state agencies to set fuel economy standards, have recently been subject to significant uncertainty. In August 2025, the EPA issued a proposed rule to rescind the “Endangerment Finding,” which underpins the majority of the EPA’s GHG regulations, and all GHG emission standards for light-duty, medium-duty, and heavy-duty vehicles and engines. We cannot predict whether such efforts will ultimately be successful. Moreover, in December 2025, NHTSA published a proposed rule to amend the fuel economy standards for light-duty vehicles for model years 2022 to 2031. The proposed rule rolls back future model year fuel economy targets, reduces annual increases and removes the consideration of the availability of alternative fuel technology, including EVs, from the fuel economy targets, though the substance and timing of the final rule is uncertain. However, any future standards that result in stricter fuel economy standards could significantly increase our costs of operation as well as reduce our volume of business. Representatives of the U.K. government have committed to a ban on the sale of new gasoline and diesel cars after 2030, with all new cars and vans required to be fully zero-emission by 2035, although proposals have since been made to rescind or dramatically scale back the ban. These and similar proposals may have a significant impact on the future mix of vehicles provided by our manufacturers. Any future impact of these regulations on our operations cannot be predicted with certainty.

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• Increased attention to sustainability matters may adversely impact our business, reputation and access to capital.

  Could happen

  Voluntary sustainability disclosures may be based on expectations, assumptions or hypothetical scenarios that are uncertain, subject to change and difficult to verify over long time horizons. Such expectations, assumptions or hypothetical scenarios are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established approach to identifying, measuring, and reporting on many sustainability matters. Additionally, while we may also announce various voluntary sustainability targets, such targets are often aspirational and may be subject to change depending on changed circumstances, methodologies, business forecasts or other factors. We may not be able to meet or make progress against such targets in the manner or on such a timeline as initially contemplated, including, but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results. Despite these aspirational goals, we may receive pressure from investors, lenders, or other groups to adopt more aggressive climate or other sustainability-related goals, but we cannot guarantee that we will be able to pursue or implement such goals, in whole or in part, because of potential costs or technical or operational obstacles.

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• Existing and potential new trade policies, such as tariffs, could adversely affect our operations, costs and business.

  Could happen

  While the possibility exists for delays, reductions or exemptions of the automotive and reciprocal tariffs, the potential impacts of the tariffs described above remain uncertain and may cause a significant impact on the affordability of our products as well as the future mix of and demand for vehicles provided by our manufacturers, as well as alter the mix of supply and demand for used vehicles. To the extent any such tariffs remain in place for a sustained period of time, or in the event a global or domestic recession results therefrom, the disposable income of our customers could be significantly reduced, which may result in our customers deciding to delay new or used vehicle purchases or vehicle maintenance and repairs, or forego them entirely, each of which could adversely affect our results of operations and financial condition. Additionally, reciprocal tariffs, tariffs on steel, aluminum, copper and other materials and the elevated tariffs against China could negatively impact business or consumer sentiment, demand for our products, our manufacturers’ global supply chains and the U.S. or global economy generally. Manufacturers’ supply chain dependencies and production facility locations vary (and planned facility locations may, in response to threatened tariffs and trade barriers, be changed), and as a result, certain manufacturers could be impacted more significantly by the imposition of tariffs than others.

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