Good morning. Thank you for attending the AutoNation 2Q 2024 earnings call. My name is Alyssa, and I will be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I would now like to pass the call to our host, Derek Fiebig, with AutoNation. Please go ahead. Thank you, Alyssa, and good morning, everyone. Welcome to AutoNation's second quarter 2024 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer, and Tom Szlosek, our Chief Financial Officer. Following their remarks, we'll open up the call to questions. Before beginning, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued today and in our filings with the SEC. Certain non-GAAP measures, as defined under SEC rules, will be discussed on this call. Reconciliations are provided in our materials and on our website located at investors.autonation.com. With that, I'll turn the call over to Mike. Thank you, Derek, and good morning, everyone. Thanks for joining us today. As I mentioned in today's press release, the CDK outage masked what was developing into a very positive quarter for AutoNation. April and May, new unit sales were up about 5%. Used unit sales were flat but accelerating in June. After-sales growth was consistent with first quarter trends, and margin trends in many of our business lines were moving positively. I was certainly encouraged with where the quarter was sitting when the CDK outage hit us on June 19th. Now, as usual, Tom is going to take you through more details of our performance during the quarter in his section, but I did want to give you a summary of the scope of the impact on our business. Before I do that, however, I think it's important to state that as of the last week of July, the incident with regard to its operational impact on our business is now behind us. Now, to give you a sense of scope, virtually all of our business processes, including CRM, deal processing, financial services, inventory management, after-sale systems, and accounting, are tied in one form or another to the CDK backbone and therefore were all immediately impacted. Now, naturally, we worked with each of our business units to put in place interim solutions, some of which were off the shelf and some of which had to be developed. Now, each solution, based upon the discipline involved, returned our business to some level of functionality and productivity, but the workaround processes were in large part manual. For example, we manually processed close to 60,000 repair orders during the outage, and you can imagine this slowed things down tremendously. Now, main functionality of CDK was brought back online in late June. However, there were some ancillary integrations which have only recently been restored. Now, as a direct outcome, our second quarter results were adversely impacted by approximately $1.55 per share, which includes the lost revenue and margins during the outage, as well as the impact of certain one-time costs incurred, including a pay guarantee for our variable compensation-based associates. Now, notwithstanding the aforementioned, there were a number of really encouraging areas in our performance in the second quarter, which I'm going to highlight. Let me start with new vehicles. You can see that margins are stabilizing and following two quarters of sequential margin decline of more than $300 per quarter, second quarter margins declined to $3,108, or $220 during the period, and were basically flat May to June. Now, although for the quarter, new vehicle sales were down 2%, even with the outage, we grew units of our import brands by 6%. In used vehicles, total used vehicles for the quarter decreased by 8% from a year ago on a same-store basis, and total units were 5% lower, and that benefited from the growth of our AN USA footprint. And to date, as you know, we've opened four new AN USA stores. Used car demand remains relatively strong, certainly through the quarter, although demand by price point changed to move into lower price bands, but total demand volume is healthy. Our pace of used car inventory sourcing slowed significantly in the second half of June, now improving, and I expect it to return to normal levels of used car inventory in the second half of August. Our PVRs continued to recover in the quarter, increasing by $165 on a sequential basis. You'll recall that earlier this year, we discussed the actions our operating teams are taking to better align inventory and increase turns. I'm pleased to note the continued recovery in margins, which is not coming at the expense of a slowing turn rate. Customer Financial Services, or CFS, continued to deliver in the quarter. We did see some moderation in products sold per unit sale, which dropped approximately 10% from last year. Now, we progressively took actions to address this, and I'm saying we've seen an increase throughout July back to what we consider normalized levels. Now, as part of our CFS strategy, we remain focused on driving penetration of AutoNation Finance. ANF originated over $240 million of loans during the quarter, almost four times higher than the second quarter of 2023, and the portfolio balance now exceeds $700 million. Now, for our shareholders, this means a shift to a model that, on a lifetime basis, is 2.5x-3x more profitable than that of the traditional third-party finance offering. While this focus can have a short-term adverse impact on CFS PVRs and cash flows-... We're pleased with the enhanced long-term value creation by the more regular contact with our customers that this model naturally provides. After-sales delivered another good quarter, tracking around 10% growth for the quarter through May. We ended basically flat as a result of the loss of productivity in the second half of June. During the quarter, we improved service effectiveness and delivered a positive mix shift, which enabled a year-over-year 60 basis point increase in gross margin to 48% for the quarter. Now, this business represents close to half of our profitability and is a key part of our continued engagement with our customers. We continue to focus on technician development, productivity, and retention, as well as capacity utilization to support the continued growth of the business, which we expect to deliver increasingly in the second half. Importantly, our total technician workforce increased 3% from a year ago, and this was achieved in a labor market that remains very competitive. We also joined forces with the U.S. Army to create job opportunities for soldiers through the Partnership for Your Success program. The strength of our balance sheet and cash generation continued to give us optionality for capital deployment. As planned, we're spending more modestly on CapEx, and to date, through the second quarter, we purchased $350 million of AutoNation shares at an average price of $159 per share. This reduced share count by more than 5% since the beginning of the year. Our leverage remains within our targeted range. Inventory levels of new vehicles are almost fully restored to pre-COVID levels, and I'm happy with where we're positioned in our new vehicle business, and as such, I'm expecting to recover market share in the second half of the year. As you know, while new vehicle sales generate a small portion of our gross profit, around 16%, they start the flywheel for all our other businesses, something which we're acutely focused on. We acquire trade-in to sell as used, we attach product penetration and finance offerings, and it leads to the after-sales business. So these continued strong trends for new vehicle sales are encouraging for that. With that, I'm going to hand over to you, Tom. Okay, thanks, Mike. I'm turning to slide four to discuss our second quarter P&L. Our total revenue of $6.48 million was nearly identical to the first quarter, despite the outage. And as Mike mentioned, we were tracking above expectations across the enterprise when the outage hit during one of the highest volume periods of the quarter. When you combine this with the expected year-over-year normalization in vehicle selling prices, our revenue decreased 6% from 2023. Gross profit of $1.2 billion was 18% of revenue and decreased 3% on a sequential basis, reflecting the productivity drag from the outage. Mike mentioned the encouraging margin rate trends. Gross margin rates improved 60 basis points from the first quarter in both the used and aftersales businesses, and the rate of PVR moderation in the new business, as Mike mentioned, was also encouraging. Adjusted SG&A was relatively stable at $782 million, compared to $786 million in the first quarter. This results in adjusted operating income of $319 million, just under 5% of revenue. Now, below the operating line, our second quarter results were impacted by higher interest expense, mainly for floor plan debt, and benefited from lower income tax expense. The second quarter floor plan interest expense of $54 million was up $21 million from a year ago, as expected, which is a reflection mostly of higher inventory levels and to a lesser degree, higher interest rates. As a reminder, we reflect floor plan assistance received from OEMs in gross margin, and assistance was down slightly from the second quarter last year. So net of OEM incentives, the new vehicle floor plan expense changed from a benefit of $3 million in 2023 to a cost of $21 million in 2024. Our second quarter adjusted net income excludes the $43 million of direct costs associated with the CDK outage, and last year's second quarter adjusted net income excludes $16 million of losses from hailstorms and natural catastrophes. All in, this resulted in an adjusted net income of $163 million compared to $285 million a year ago. Mike talked about our share repurchase activity. This helped to partially offset the EPS effects of the net income decline. Total shares repurchased over the past year have decreased our average outstanding share count by 10% to 40.7 million shares in the second quarter. This was a benefit for our adjusted EPS, which was $3.99 for the quarter. Let me move to slide five for some more color on new vehicle performance for the quarter. New vehicle unit volumes were tracking at approximately 5% growth through May, but ended the quarter down 2%, including an increase of 6% for imports, a 5% decrease in domestics, and a 10% decline in premium luxury. The outage disrupted vehicle sales, inventory, and customer relationship management functions in June. We are encouraged by customer demand indications, vehicle supply, and manufacturing support, including manufacturing incentives such as low-interest financing and rebates. On average, new vehicle unit revenue decreased 3% in the quarter, while new vehicle unit costs increased modestly, resulting in moderation of new vehicle PVR. As Mike mentioned, we are encouraged with the stabilization of our new PVRs and the $220 sequential decline is more modest on an absolute and relative basis than we've experienced over the last several quarters. The new vehicle supply dynamics have significantly improved. New vehicle inventory levels sit at 47,000 units at the end of June. This represents 67 days of sales, up from 44 days at the end of the first quarter... excluding the impact of the outage, we estimate that we would have been closer to 50 days sales at the end of the second quarter, which continues to track below the mid-60-day levels pre-COVID. Turning to slide six, used vehicles. We were tracking at flat year-over-year volumes through May, but ended with a unit volume decrease of 8% same store from a year ago, and 5% decline on a total store basis. This reflects the outage disruption on our vehicle sales, inventory, and CRM functions. Average used vehicle selling prices moderated year- over- year by 5%, reflecting the shift to lower priced used vehicles. Demand for those lower priced used vehicles remains resilient. Total unit sales of vehicles priced under $20,000 increased by 4% from a year ago. Mid-priced vehicles were down 5%, and vehicles over $40,000 were down more significantly. With the OEMs taking actions to improve the affordability of new vehicles, there has been some shift away from higher priced used vehicles. Mike discussed the encouraging outcomes in used vehicle PVRs in the quarter, reflecting the actions we took to better align used vehicle inventory with market demand and to optimize pricing. While unit profitability was down year-over-year as a result of a mix shift to lower-priced used vehicles, these actions helped to increase unit profitability by $165 on a sequential basis. Used vehicle inventory levels are at 30,000 units at the end of June, down 15% from a year ago. This represents 34 day sales, up from 31 day sales at the end of the first quarter. Excluding the impact of the outage, we estimate that we would have been closer to mid-20s day sales, which is less than we would prefer. Used vehicle sales and profitability continue to be a big area of focus for us as we emphasize effective sourcing, pricing, and speed, while optimizing customer satisfaction. I'm on now slide seven, Customer Financial Services. The outage not only reduced new and used vehicle sales, but further limited our ability to attach CFS product and finance offerings to the vehicles we did sell, as Mike mentioned. So a little bit of a double whammy in an environment where high interest rates are already consuming more of our customers, monthly budgets. However, our outage workarounds were, very effective, in this area, and we were able to restore our product attachment rates and finance penetration and kept CFS unit profitability within 3% of the first quarter rates. We are encouraged by our continued strong performance, in this portion of the business. We continue to grow AN Finance business, as Mike mentioned, which did serve to shift about $85 away from CFS PVRs in the quarter. This is done with purpose, however, as the profitability to AutoNation over the course of a, of an AutoNation Finance loan is expected to be more than 2.5x-3x that of a non-AutoNation Finance loan. Mike gave you some of the other numbers for AutoNation Finance. The business is on track to exceed our original expectation of, of over $700 million in originations in 2024. Now, as a reminder, AN Finance now only underwrites AutoNation loans and targets a higher credit quality than it did prior to AutoNation ownership. It is already the number one lender across the AutoNation enterprise. Its credit profiles and profitability also continue to improve, and delinquency, delinquency rates on the business underwritten since the acquisition have been in line with our expectations. We're also finding that AN Finance is deepening the relationship we have with our customers. So far, this acquisition is proving out with attractive cash-on-cash returns on equity. Moving to slide eight on aftersales. We grew at 9% same-store pace through May. Gross profit in June was down about 20% year-over-year, reflecting the challenges from the outage, and for the quarter, total store gross profit declined approximately 1% from a year ago. Our gross margin rate once again increased, reaching 48% for the quarter. This is up 60 basis points from both a year ago and sequentially, as the value per repair order has improved, and we had a favorable mix shift to higher margin categories within after sales. To slide nine, adjusted free cash flow for the first half of the year was $519 million, compared to $530 million a year ago. And as you can see, the conversion relative to our income improved. The timing of payments during the second quarter were affected by the CDK outage, although conversion would still have been higher than 2023, even without this timing impact. We remain focused on our cash cycles across the business, which, you know, has helped us to achieve these results. We closely monitor our metrics for our key operating cycles and have resources and programs in place to drive efficiency in each. Capital investments were slightly below 2023 levels, and consistent with the expansion of AN Finance, our auto loans receivable related to the loans originated at our own stores increased by approximately $370 million in the first half of the year. And as I mentioned, we expect continued growth in this portfolio. Slide 10 shows our capital allocation for the first half of 2024, compared to the same six months in 2023. Now, being a strong generator of cash provides us nice optionality in terms of capital allocation. To me, the debt and M&A lines stand out for the first half of 2023. We were net borrowers by over $400 million to support M&A. In 2024, we've significantly moderated our borrowing activity in light of the lower M&A activity to date and lower share repurchases. We do remain committed to the efficient allocation of our capital to both M&A and share repurchases. This will be balanced with the need to maintain appropriate leverage levels in this dynamic environment to support our investment grade credit rating. At quarter end, our leverage was 2.5x EBITDA, which is in line with our 2x-3x EBITDA long-term target. Now, let me turn the call back to Mike before we address your questions. Yeah, thank you, Tom. As you can imagine, we are pleased to move on, particularly from the end of Q2. While we do so, I think it's important we do not allow some improvement performance trends we were seeing to be lost in the midst of the outage. Now, I'm encouraged the business delivered reasonably close to what was a strong first quarter, despite the difficult circumstances. Margin and cash were the highlights, as were the pre-outage volume trends. Looking forward, as I mentioned earlier, I view the current levels of vehicle demand we are seeing as positive. With this, coupled with our significantly strengthened supply of new vehicles, I expect to regain any share loss in the coming periods. Now, we have continued work to do in our improving used businesses. As you know, this is a very high-turn business, and its performance is largely in our control. We have strong self-sourcing capabilities, remain focused on turning the inventory quickly, and are pleased with the quarter-over-quarter margin improvement. With that, I'd like to hand it over for any Q&A you may have. Thank you. Alyssa, if you could please open up the lines for Q&A. Certainly. We will now begin the Q&A session. If you would like to ask a question, please press star one on your telephone keypad. The first question is from the line of John Murphy with Bank of America. Please go ahead. Good morning, guys. Just want to ask one very quick one before a second longer one. What was the reaction that your sales folks had to the $43 million that you paid despite the CDK disruption? I'm just curious how much goodwill that may have engendered with folks. Thanks, John. I actually was in the dealerships when we made the announcement. As you can imagine, there was... Given the nature of their pay and obviously their dependency on productivity, there was a lot of concern within the businesses about the impact on them and their families. So, I think the sense of gratitude and the recognition and support from the organization was clearly seen when I was there, and we continue to see it in the business, not just for our sales executives, but also for our technicians. Because, as you know, and I mentioned briefly in my remarks, we've grown our technician base. It's incredibly competitive labor market. Retention of technicians, development of technicians is so important, and given all of the work that we have done, I think it was a very necessary and right investment for us to make. And you saw the impact. These things are not cheap. But at the end of the day, I genuinely believe that the businesses are created and delivered through the people that they employ and the people that they engage. So for me, it was the necessary thing to do. Sorry for the long answer to a quick question. No, I think it will pay dividends for some time to come. Just on cap allocation real quick. I mean, it seems like there might be a slight shift that occurs over time as acquisitions become more realistic on multiples. Might be more capital that goes towards AutoNation USA stores as the zero to six-year-old fleet, you know, eventually grows in one to two years' time. How do you think about sort of the shift in potential cap allocation over the coming quarters and potentially coming years as things shift and maybe your shares are less attractive relative to, I'm sure they're probably, you know, hopefully be less attractive over time as they go up, but to those other incremental opportunities to allocate capital creatively? Well, I'll start, John, and then, Tom, I'll ask you also to comment on this question. There's no change in terms of philosophical approach to capital allocation, and it starts with the best returns we can give our shareholders and will always be centered around our shareholders. And as such, we tend to have a very consistent method of assessing investments we make, whether that's investments in our own stock or investments in dealerships. There is no doubt that we are seeing, and will continue to see it for a period of time, a normalization of asset prices in the marketplace, and as such, they become more attractive than they were, for example, 12 months ago. Because the combination of returning capital to our shareholders and growth in our organization organically or M&A is important. It's those two things working in tandem that I think ultimately deliver the best shareholder return over the period and into the future, and that is our focus. So you're going to see exactly the same view on capital allocation. The resulting allocation of spend may change, but it'll only change because assets are very attractive and synergistic to what we already have in place. Tom, I don't know if you want to add. Yeah, no, I would have been totally answering on the same return-based focus. I don't, I don't see a shift. We, we don't talk about a shift. We're just, you know, basing it on where we get the best returns. I would say that, you know, that we, we still don't think we're, we're at our intrinsic value on the share price, and, and so that- Mm. that does remain, you know, attractive to us. I would definitely agree. Thank you very much, guys. I appreciate it. Thanks, sir. Thank you. The next question is from the line of Rajat Gupta with JP Morgan. Your line is now open. Please go ahead. Great. Thanks for taking the question. Yeah, I had, you know, a question on parts and services. You know, you gave us, you know, the April and May commentary, 9% same-store growth, and clearly, that's well above, you know, what we've seen at, you know, at your peers. But you mentioned the 3% growth in the technician headcount. I'm curious if you could unpack that 9% a bit more, in terms of, you know, how much is coming from price, from mix, and just traffic? And how should we think about, you know, how July is tracking right now and, you know, expectations for during the end of the year? And I have a quick follow-up. Thanks. So, when I reflect back and think about the delivery of that, a large amount came from the incremental capacity that we had, and Christian and all of the after-sales teams in the dealerships really focused on service effectiveness, which, as you know, is a penetration into the vehicle park. It's, it's an area where traditionally, franchise retailers are only getting 50% of what's out there within seven-year park, and for us, that is the, the key focus. So when I think about our 9% growth, some of it did come from mix because we saw a reduction, for example, in some of our wholesale and retail counterparts, and a little bit of reduction in our internal work. But the majority of what we're seeing is incremental revenue and income on a per repair order basis, because some of the technology that we've put in place and the interface that we have with our customers means that we're much more effective at communicating with our customers opportunities for them to preemptively, in many instances, look after the service needs of their vehicles. So it's a combination of mix change on one hand and also incremental revenue per repair order. Tom, any other color to add to that? No, just, you'd asked about July, Rajat- Oh, yeah, yeah. Yeah, well, I think July, I mean, has returned very strongly- Right ... on the after-sales, on the service and parts business. I mean, it may be that some of the unlocking that John mentioned from, from our people. Now, we—I don't think that we will recover, per se, all of the hours that were lost because there is still a capacity limitation that we have. But I think if I look across the various elements of our business, the after-sales teams, I think, have recovered the quickest. And I would say we exited, we exited July on a, on a good pace. Got it. Got it. That's, that's very clear. And just a follow-up, you know, a bit of a long-term question. You know, with the experience you had, you know, with the CDK outage, I, I'm curious, like, what does this mean for, you know, your thinking around, you know, long-term, like, systems that you have in place? You know, are you thinking about, like, maybe adding more redundancy, you know, partnering with other lenders, or if any more, like, cybersecurity, cyber insurance expenses, that might start to flow through? Curious, like, what's... Have you started to think in that direction, and what that would mean, you know, just from, like, an IT expenses or cost structure perspective? Thanks. Let me try and give you a good answer on this. So obviously, what we're able to do, looking back now, is we're able to see which elements and systems had the biggest impact on us across the integrations that we've had. AutoNation has spent a lot of time integrating with our DMS system to drive some productivity levels, enabling us, for example, to provide a large volume back office services from central locations. And that integration, frankly, would have been developed, whether it was Reynolds and Reynolds, CDK or any other DMS provider. So from my point of view, I think that one of the important things as we review that period of time is to see which had the biggest impact in our performance, and what should we do in terms of providing either a backup system or a degree, if you like, of redundancy, that means that impact could be limited. So we've done that work. And as I mentioned, some of the things that we did in response to the initial outage were systems that were on the shelf that needed further development and integration so that we could use them much more productively. So we now understand things that we may want to invest in and have invested in that would protect us in some of those key, let me call, contribution areas that were impacted the highest. For example, CRM. As you know, the speed, the accuracy and the professionalism that we respond to inbound opportunities, particularly digital inbound opportunities, has a significant impact on the conversion rate and the output of those. When you lose your CRM systems, you obviously, your productivity drops dramatically. So that's an area where we can, because of our IT guys and girls, develop a light system that doesn't involve a huge amount of investment, that will not have the full functionality of all the work that we have done with our CDK partners in this area, but will provide a degree of functionality that means the productivity loss that we saw will be mitigated to a certain extent. And obviously, it's incumbent upon us to look at that and strike the right balance between investments that we want to make, recognizing that this event was. I don't want to use the term one time, but that this event was not something that you would completely structure your business around. I would rather structure our business around making sure that we are adequately invested, for example, in cybersecurity. Clearly, there are learnings for everybody involved in this, and we're just trying to extract the most beneficial ones for the company. Yeah. I mean, the thing that I would add is that. It's a great question, Rajat. I mean, we're early days in trying to get to, you know, what this means for us. And obviously, we've been trying to restore, you know, continuity over the last about six weeks, which, as Mike said, we—they were pretty much there. When you look at the, you know, the overall profitability of the business, I mean, obviously, 75% of it is in service and CFS, and you would want those two platforms to be, you know, trouble-free and any kind of disruption, particularly on a short-term basis. So, So, you know, some of our thinking will, you know, revolve around that as well. But, you know, the ability to, you know, handle repair orders and maintenance, be able to, you know, have continuity in our spare parts supply, to be able to process, you know, customer tickets, all of that, you know, really, really important. And, you know, our workarounds were, you know, pretty effective, but, I think we, you know, we see some opportunity there as we, as we move forward. Same thing with CFS, in terms of being able to, you know, have continuity around, you know, presentation of alternatives and, you know, helping your customers understand the product and finance offerings that we have. Got it. Got it. That's very clear. Thanks for all the color. I'll jump back in the queue. Thank you. The next question is from the line of Douglas Dutton with Evercore. Your line is now open. Hey, morning, team. Thanks for taking my question here. Just wanted to ask first on SG&A normalization in Q3. You know, are there still some latent effects from the lost productivity and lack of continuity early in July? And do we expect that percentage to stay elevated, or do we head back toward the more normal, you know, mid-66% range as a percent of gross profit? Yeah, great question, Doug. I mean, I'd encourage you to look at the overall spend on SG&A. We do think that, you know, the impacts that we mentioned, the roughly $0.76 of lost profit, mostly, you know, at the gross margin level, do distort the ratio of SG&A to gross profit. So, you know, when you look at just the SG&A itself, it's almost identical from, you know, Q1 to Q2, which, you know, kind of says that we are able to understand the mix. You know, probably 70% of it is variable, you know, and 30% is fixed. The fixed piece, we've done a very good job of, you know, holding the line on, and we do see further opportunities for productivity as we get into more densification and more centralization of some of our, you know, back office activities. So as the volume returns and we're able to, you know, keep those costs flat and continue to drive the productivity in them from our initiatives, I think you'll see ongoing improvement in the ratio. Let me just, let me just jump in there a bit, Tom, and, and also add some color for Doug. You're gonna see elevated percentages of SG&A for the period of, I would say, 80% of July, as we were returning to levels of productivity, that were still being impacted from the AutoLoop systems and services that were being integrated. I view, I view that now behind us as we get into, as we get into all this, but it will have a residual effect on that percentage. Tom is exactly right on the dollar amount, but your ask, your question was around, the percentage, so just, just my color on that point. Okay. That's super helpful. I appreciate that, guys. And then, just on PVRs, you know, they continue to look better on sort of a deceleration basis. Have you had any internal change in thesis on where these could land once we get to some fully normalized level and USR grows back above, say, you know, 16.5 million? Has there been any sort of internal discussion on that? Yeah, we always have internal discussion on our, you know, on our PVRs. And I think you'll—you guys will recall on the call when I was asked this question coming into the year. I think many of you thought I was relatively pessimistic when I said our expectations are they'll be fully normalized back to 19 at the end of the year. I have to say, I'm moderating that... I'm moderating that view on our experience over recent months. I still think that there will be some continued moderation for the year, but probably not at the pace that I saw before. You even look at the difference in mix, for example, of BEVs now, compared to what it was expected to be. And I think, as you all know, the margin on full battery electric vehicles for the OEMs and for us is significantly lower than their combustion and their hybrid counterparts. So, you know, you're gonna see a moderation on our outlook for BEVs, I think, in the year, which will also moderate our outlook on PVR. So in summary, you're still gonna see some moderation, in my view, on those, but not to the level I'd anticipated early in the year. Excellent. Thanks, team. Thank you. The next question is from the line of Bret Jordan with Jefferies. Please go ahead. Hey, good morning, guys. On that PVR question, I guess the moderation, how much is mix driven? If you think about the outperformance of import versus domestic, are you seeing maybe a Stellantis still deteriorating at that prior rate, but those products, like Toyota, that are in shorter supply, are outperforming and supporting PVR, or is everything generally stabilizing? Well, I think there is a mix impact, for sure, because if I look just year over year in the quarter, I think mix, and Tom, you got to... You moderate what I say, but my estimate of mix is somewhere between $70 and $80 year- over- year quarter in Q2. But I expect that to largely wash back out the system as we recover market share, particularly in our premium luxury. Yeah, there's been a lot of discussion and debate about different OEMs and their volumes in the marketplace and inventory build. The reality is inventory. There are many OEMs that recognize they are where they want to be and maybe a bit higher on their inventory, and they're gonna have to step into the marketplace to address that. Because dealers in and of themselves are not gonna be able to get to the net transaction price that will create the volume momentum that they need and they're looking for as well. So my answer to the question is, I do think that there's potentially mixed improvements as we get into Q3 and beyond that impacted us year- over- year in Q2. But I think generally, you've got a number of things going on in the marketplace, including higher levels of lease, for example, that just lead us to believe that you're gonna see a moderation in the reduction we're seeing on, on margins. Tom, do you wanna add? Yeah, you got it, right. Okay. Then I guess the question is, you're seeing stability in used profits. Does that make you think about reaccelerating AutoNation USA? We didn't really talk about it much in the prepared remarks, but how does that look on the next couple of years from a growth strategy? Well, one of the things that I think we're comfortable with is the revised pace of openings, because particularly through last year, I think we were opening too many. And our capacity to operationalize those, get the right level of inventory into those businesses, really does mean we have to be, I think, more paced in terms of how many we bring on stream. I would anticipate another maybe four or five this year, max. So 10, 11 coming on stream, I think that's something that we can easily absorb into our system, connect into our processes, and make sure that we have the sourcing in place to give them what they need in terms of used vehicle inventory. There are still interesting dynamics in the used market as I mentioned in my remarks. You're seeing mixed changes in terms of price buckets, which are important for us, and you still see certain availability issues for different price categories, and that's gonna continue through the year. Our used vehicle inventory, Tom mentioned, dropped particularly due to that last period of June. We're in the process of recovering inventory levels, so our used vehicle sales volume will fully recover once we get our inventory levels up to what I would consider a normal amount, and they're probably 15% below where they need to be at this moment in time, but closing that gap. I don't know if that fully answered your question, Bret, but let me know if it did or not. No, that was good. Thank you. Appreciate it. Thank you. Our final question will be from the line of Adam Jonas with Morgan Stanley. Please go ahead. Hi, this is Daniela Haigian on for Adam Jonas. So my question is on vehicle affordability, which continues to be a problem for many Americans, higher for longer ASPs and also rates. What is your view on the state of the consumer, and is there anything you're seeing on the auto credit side that gives you concern? Well, I think there's no doubt that, affordability, is top of mind for many of the consumers that come into this marketplace, whether it's on new or used vehicles. I mentioned the fact that if you look at our CFS performance, it's moderated very slightly. That was about product attachment rates, and that is all about, not desire for the product per se, but it's all about managing to a monthly budget. So I think that there are impacts in the marketplace. You're also beginning to see increases, I think, in delinquency rates that, I think are manageable and not where they were a year ago. But I do think there are signs in the marketplace that the consumers continue to feel the pressure from the current environment. In response to that, you have already talked about the mix shift that we are facilitating and seeing in our used vehicle business. We're also seeing, I think, from the OEM side, increase in leasing, which helps affordability, and I think you'll continue to see OEMs responding in an appropriate way with managing net transaction price to help that situation and keep momentum in new vehicle sales, because in my view, there's still quite a large pent-up demand on new vehicle sales that will get released over the coming periods with the right pricing in the marketplace. Got it. Thank you. Well, that concludes our Q&A portion. Mike, if you wanna make closing comments here? Yeah. Thank you. And again, thank you for for all your questions and, and for being on the call today. You know, when we came into this year, I said I was certain that it would continue, the year would continue to bring a normal mix of headwinds and tailwinds. And while the CDK, CDK outage was far from a normal headwind, as I said in my early comments, I consider the operational impact of the CDK incident is now behind us as we exit, July. And obviously, our daily focus is on fully rebuilding the momentum that we lost and regaining, any share that we lost, particularly in that last period of, of June. I'd like to thank all of our associates and employees in the business, not just for their response to the outage, but also for the work that they've done creating the momentum that we saw through May. It's a pleasure to be in the same organization as you. Thank you for what you do every day. Thank you, everyone. This concludes today's AutoNation second quarter call. Thank you all for your participation. You may now disconnect your lines.