This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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AutoCanada Inc ( AOCIF ) reported meaningful progress in rebuilding sales productivity in their dealership business towards the end of the quarter.
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The company continues to see growth in its core collision business, despite challenges in the hail business due to reduced storm activity.
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AutoCanada Inc ( AOCIF ) has taken decisive actions to simplify the organization, improve accountability, and strengthen operational oversight.
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The company completed the acquisition of Modern Auto Body in Edmonton, enhancing regional density and OEM certifications.
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AutoCanada Inc ( AOCIF ) made significant progress on the divestiture of its U.S. dealership portfolio, with expected proceeds directed towards debt reduction.
Negative Points
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The Canadian automotive market remains soft, with declining demand for new light vehicles due to elevated pricing and macroeconomic uncertainties.
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Adjusted EBITDA from continuing operations decreased to $31 million from $43 million in the prior year.
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Used vehicle profitability remains a significant pressure point, with negative gross profit per unit as the company works through aged inventory.
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The company faces challenges in the hail business, with a significant year-over-year decline in collision EBITDA due to reduced storm activity.
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Market conditions are expected to remain challenging, with consumer affordability pressures impacting demand trends.
Q & A Highlights
Q: Should we consider Q1 as a low point, and when do you expect to return to more normalized numbers? A: Samuel Cochrane, CEO: Q1 was as expected, with March showing better volumes than anticipated. Positive trends in GPUs and volumes are continuing into April and May, making us cautiously optimistic. We expect used GPUs to normalize in the second half of the year, while new and parts and service will take 9 to 12 months to stabilize. By 2027, we should be on a more normalized basis.
Q: Are inventory levels right-sized for Q2 and Q3? A: Samuel Cochrane, CEO: The team has improved the age and profitability of used cars, with better profitability seen in April and May. We expect continued improvements, leading to a clean inventory by the end of the year.
Q: How much of the turnaround is tied to the broader economy versus what is within your control? A: Samuel Cochrane, CEO: While macro conditions are beyond our control, many internal improvements are within our control, such as recruiting more technicians and improving service utilization. We are confident in our ability to improve the business despite macro challenges, aiming for a 12 to 18-month turnaround.
Q: Has the mix of new vehicle brands improved, allowing AutoCanada to outperform the Canadian market? A: Samuel Cochrane, CEO: We are closer to outperforming the market, but more work is needed to rebuild the team and product knowledge. Improvements in new GPUs and parts and service are expected in the late second half of the year.
Q: What changes have been made in sourcing vehicles to improve GPU? A: Samuel Cochrane, CEO: We have implemented a buy box tool that provides better data to ensure a minimum profit on cars before purchase. This empowers buyers with better information, leading to improved decision-making and GPU.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
