AutoCanada Inc. reported a return to profitability in the third quarter of 2026, with revenue from continuing operations rising 3.1 per cent to $1.24 billion as the Edmonton-based automotive dealership group continued restructuring its business and reducing debt.
The company recorded net income from continuing operations of $40.3 million for the three months ended Sept. 30, compared with a loss of $2.9 million in the same period last year. However, adjusted EBITDA declined 16.7 per cent to $48.4 million from $58.1 million.
The results come as AutoCanada continues to streamline its operations, divest its U.S. dealership portfolio and pursue growth in its Canadian dealership and collision repair businesses.
Company focuses on simplifying operations
AutoCanada CEO Samuel Cochrane said the company is continuing to focus on its core operations and capital allocation.
“We are focused on simplifying the business, strengthening our core operations, and disciplined capital allocation,” said Cochrane.
“The third quarter reflects continued progress toward this goal. We are seeing year over year unit growth, improving inventory efficiency, making sequential gains in new vehicle market share, reshaping our dealership portfolio, building value in our collision business, continuing to shut down or sell underperforming businesses, and reducing debt.”
Gross profit increased 4.9 per cent to $196.7 million, compared with $187.4 million a year earlier. Gross profit margin improved to 15.9 per cent from 15.6 per cent.
Operating expenses before depreciation were relatively unchanged at $148.9 million, up 0.1 per cent year-over-year. Adjusted EBITDA margin, however, declined to 3.9 per cent from 4.8 per cent.
Used retail vehicle sales increased 7.4 per cent to 10,791 units, while new retail vehicle sales edged up 0.6 per cent to 7,948 units. The company reported continued pressure on new vehicle profitability, with gross profit per retail unit declining 19.8 per cent to $3,354.
Collision business under strategic review
AutoCanada’s collision operations continued to record growth, with revenue increasing 21.3 per cent to $45.5 million in the quarter, compared with $37.5 million a year earlier.
Gross profit rose 44.3 per cent to $25 million, while the gross profit percentage increased to 55 per cent from 46.2 per cent.
The company acquired ACX Southgate in Edmonton during the quarter, expanding its collision repair capacity in the market. Since the third quarter of 2025, AutoCanada has acquired 10 collision centres that it expects will contribute an additional $7.1 million in annual post-rent EBITDA once they reach maturity.
The company is also evaluating strategic options for its collision operations.
Its board of directors initiated a strategic review during the third quarter and established a special committee of independent directors to assess alternatives intended to maximize value for the company and shareholders.
Options could include separating the collision business from AutoCanada or selling all or part of the operations. TD Securities Inc. has been retained as the company’s exclusive financial adviser for the review.
The board believes the value and growth potential of the collision operations may not be fully reflected in AutoCanada’s current public market valuation.
U.S. dealership sales expected to reduce debt
AutoCanada also provided an update on the planned sale of its U.S. dealership portfolio, which operates under the Leader Automotive Group name.
The company said it had received approximately $106 million in gross proceeds, excluding working capital, from the divestiture program and remains on track to generate between $115 million and $130 million.
It has entered into a definitive agreement for the remaining nine dealerships, representing two individual storefronts. Additional proceeds of up to $19 million are expected from related land dispositions.
AutoCanada intends to use proceeds from the transactions to reduce debt and reinforce its focus on Canadian dealership and collision operations.
The company reported a total net funded debt-to-bank EBITDA ratio of 3.40 times at Sept. 30, 2026, and is targeting a range of 2.0 to 3.0 times following completion of its divestiture program.
The transactions remain subject to customary closing conditions, including manufacturer approvals.
More from Retail Insider:
