Business Description

Sonic Automotive, Inc. was incorporated in Delaware in 1997. References to “Sonic,” the “Company,” “we,” “us” or “our” used throughout this Annual Report on Form 10-K refer to Sonic Automotive, Inc. and its subsidiaries. We are one of the largest automotive retailers in the United States (the “U.S.”) (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of December 31, 2025: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of December 31, 2025, we operated 111 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment, and 14 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 134 new vehicle franchises (representing 24 different brands of cars and light trucks) and 16 collision repair centers in 18 states. The EchoPark Segment consists of 18 stores and operates in 10 states. The Powersports Segment consists of 41 franchises at 14 locations (11 full-service dealerships and three authorized retail outlets) in three states. Reportable Segments The Franchised Dealerships Segment provides comprehensive sales and services, including: (1) sales of both new and used cars and light trucks; (2) sales of replacement parts and performance of vehicle maintenance, manufacturer warranty repairs, and paint and collision repair services (collectively, “Fixed Operations”); and (3) arrangement of third-party financing, extended warranties, service contracts, insurance and other aftermarket products (collectively, “F&I”) for our guests. The EchoPark Segment sells used cars and light trucks and arranges third-party F&I product sales for our guests in pre-owned vehicle specialty retail locations, and does not offer customer-facing Fixed Operations services. The Powersports Segment offers guests: (1) sales of both new and used powersports vehicles (such as motorcycles, personal watercraft and all-terrain vehicles); (2) Fixed Operations activities; and (3) third party F&I services. All three segments generally operate independently of one another, with the exception of certain shared back-office functions and corporate overhead costs. The majority of our revenue is related to our Franchised Dealerships Segment. In 2025, Franchised Dealerships Segment revenue represented approximately 85.0% of total revenue (compared to 83.9% in 2024). In 2025, EchoPark Segment revenue represented approximately 13.7% of total revenue (compared to 15.0% in 2024). In 2025, Powersports Segment revenue represented approximately 1.3% of total revenue (compared to 1.1% in 2024). See Note 14, “Segment Information,” to the accompanying consolidated financial statements for additional financial information regarding our three reportable segments. 1 SONIC AUTOMOTIVE, INC. Our Business The following charts depict the multiple sources of revenue and gross profit for the year ended December 31, 2025: As of December 31, 2025, we operated in the following states: Market Number of Stores in Franchised Dealerships Segment Number of Stores in EchoPark Segment Number of Stores in Powersports Segment Percent of 2025 Total Revenue Texas 27 6 7 26.2 % California 23 1 — 24.6 % Colorado 7 3 — 7.8 % Tennessee 9 1 — 7.4 % Florida 9 — — 5.9 % Alabama 7 1 — 4.6 % North Carolina 3 2 2 4.2 % Georgia 5 1 — 4.0 % Idaho 3 — — 3.3 % Maryland 4 — — 1.8 % Virginia 1 — — 1.8 % Nevada 2 1 — 1.8 % South Carolina 2 — — 1.4 % Indiana 3 — — 1.1 % Missouri 3 1 — 1.1 % New Mexico 1 — — 0.7 % New York 1 — — 0.3 % Arizona — 1 — 0.5 % South Dakota — — 5 0.4 % Louisiana 1 — — 0.4 % Disposed stores and holding companies — — — 0.7 % Total 111 18 14 100.0 % 2 SONIC AUTOMOTIVE, INC. In the future, we expect to acquire dealerships and open new stores that we believe will strengthen our brand portfolio and divest dealerships or close stores that we believe will not yield acceptable returns over the long term. The retail automotive industry remains highly fragmented, and we believe that further consolidation may occur. We believe that attractive acquisition opportunities continue to exist for dealership groups with the capital and experience to identify, acquire and integrate new dealership acquisitions.…