AN
#<UNK>.
Yes, if you think about it from an SG&A perspective I'd say one of the bright spots for us and an area that we really focused on when we began to see the plateau in the fourth quarter of last year was on compensation.
So we've made really good headway on compensation year over year.
So that's an area that you definitely see that leverage in.
Advertising has remained in good order as well.
Certainly when you have growth compression it does impact on a percentage basis some of the store and overhead cost but we've worked hard to offset that.
So if you exclude the hail and the timing of the stock-based compensation you have the 70% SG&A that remains around our target level.
You'd like to see lower than that but in this growth pressure environment it's going to be a little more difficult.
I would say digital continues to be a medium- to longer-term exercise.
So we had made great headway with respect to the third-party lead generators that we had previously used.
So we brought that below the 9% mark from 15%-plus historically.
So continue to see great traction there, and it really helps us deliver on the brand promise.
So as we've talked about we don't see separate callouts for the exact impact of digital, but I will tell you that all of the indicators continue to be very positive from those efforts.
Well I'm not so sure the overall economy is as robust as you would have just described it.
If I take GDP growth the last ---+ well, we don't have it the first quarter yet, but I'm not ---+ nobody's real bullish on it.
It's certainly going to be I expect less than 2%, significantly less than 2% and the fourth quarter was tough.
You certainly saw the Federal Reserve pullback on its plans to increase its interest rates around its concerns on the economy.
So I think it's not as strong out there as you might necessarily think.
And we're at a high level, don't forget we're at a high level for vehicle purchases.
And is it really realistic to continue those types of increases.
I would also point out I have concerns going into an election year.
I have observed in the past when there's very controversial elections and it looks like we're on the road to having one of those this year that consumers sometimes hesitate around big purchases.
Usually pick it up after the election but leading up to election it can be a little bit soft.
So I think the economy has had a hesitation or a rough patch.
We will have to see if it resumes its stride.
That would be very supportive of vehicle sales to get that.
So I think my sense that I called out at the beginning of the year, and I clearly was the odd man out at the party at the Detroit Motor Show to say hey everybody I don't think things are going to just to zoom along here, was a correct call.
So we're adjusting.
I hope the industry adjusts and it's still an environment where you can be very profitable.
We get better pricing and better penetration.
<UNK>, you're leading the effort at the store level.
Could you talk about it please.
Yes, it's a combination of things.
So having our branded products is definitely a contributing factor.
We've always been able to get leverage because of our size as it comes to the products but obviously taking them in-house gives us 100% of the margin versus splitting it with a third-party as well as our stores still continue to execute at a high level and we still have opportunity in select stores and select brands for continued growth.
So we feel very strongly with the performance of our team in the field on driving the numbers and we continue to see upside.
<UNK>, could you take that please.
Yes, it's definitely driven on the PVR side of the equation.
The market is extremely competitive as well as a large percentage of our domestic stores are in the energy markets of Colorado and Texas.
So we kind of got a double hit there between being in those markets and the compression we had on that side as well as the compression in the PVRs due to a more competitive marketplace.
And just to add, too, on the revenue side that reflects the acquisition of the Texas group which was heavily domestic as well.
<UNK>, do you have those numbers there or <UNK>.
So on a same-store basis our inventory on I guess a day supply is the best way to look at it.
We went from 55 days to 66 days.
As far as overall inventory that's approximately 1,000 units but it was mainly ---+ or did I pulled the run number.
Sorry.
It was 63,657 last year or 68,000 this year.
So it's about a 5,000 unit increase.
<UNK>, you called it out earlier.
A lot of it is just based on the exit rate coming out of March.
One more time.
Couldn't hear you.
You know, we're going to have to get that ---+ get to the exact numbers and either Robert, <UNK> or myself can reach out to you and get you a more detailed response.
So we are not using price to try to get volume.
We're more just moving with where the market is.
We're not lowering price aggressively below-market and therefore taking the market down further.
So we're just sort of at market as far as pricing.
And I think our volume results are very much a reflection of the economic stress that's in the markets we're in, particularly energy which we've talked about a lot and premium luxury which is going through this challenge with overdependence on cars and trying to shift the mix to trucks.
This is <UNK> <UNK>.
We have 15% of our pre-owned inventory on sales hold.
And I would say what has happened is that's been the same number since even into last year is that gradually the non-Takata situation has got under control, but the Takata challenge has increased to the point where I called out 60% of the vehicles on hold are Takata.
So Takata is the reason the number hasn't budged.
And I already talked about the steps we're taking to deal with that going forward.
I haven't heard the report.
Are you saying we're getting more sooner or slower.
Yes, well, that's not good news.
That means it's going to take longer to get the replacement parts.
You know, we really need the parts as soon as possible and that would make life more complicated if the parts availability expectation has slowed.
<UNK>, do you want to take that please.
I'd have to get the exact number for you on that.
But traditionally the vast majority of the customers do not buy out their leases and a high, high majority my gut would tell me it's in excess of 80% lease another vehicle.
Thank you for joining us today.
Very much appreciate all your questions.
Thank you very much.
