Prepared remarks
Good morning, everyone. Welcome to the Boyd Group Services Inc. 2026 First Quarter Results Conference Call. Listeners are reminded that certain matters discussed in today's call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's annual information form and other periodic filings and registration statements, and you can access these documents at SEDAR's database found at sedarplus.ca and EDGAR at www.sec.gov. We released our 2026 first quarter results before markets opened today. You can access our news release as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com. Our news release, financial statements, and MD&A have also been filed at SEDAR+ and EDGAR this morning. On today's call, we will discuss the financial results for the quarter ended March 31, 2026, and provide a general business update. We will then open the call for questions. I'd like to remind everyone that this conference call is being recorded today, Wednesday, May 13, 2026. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of Boyd Group Services Inc. Please go ahead, Mr. Kaner.
Thank you, operator. Good morning, everyone, and thank you for joining us for today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer. Building on the strong foundation that we established in 2025, I'm pleased to report we delivered all-time record first quarter results. We achieved both all-time record revenue and adjusted EBITDA, grew our location footprint by 33%, recorded our third consecutive quarter of positive same-store sales growth, achieved an incremental $20 million in Project 360 and synergy cost savings, and expanded our adjusted EBITDA margins by 200 basis points. We also successfully closed our Joe Hudson's acquisition, the largest MSO transaction in the company's history, with the integration successfully completed subsequent to quarter end. This success would not have been possible without the hard work and dedication from the entire Boyd team, including our new Joe Hudson's team members. I want to thank all of our employees for their meaningful contributions. Turning to our financial performance. In the first quarter, we generated all-time record revenue of $997 million, an increase of 28% compared to the first quarter of last year, and increased adjusted EBITDA by 52% to an all-time record of $122 million. Adjusted EBITDA margins expanded by 200 basis points to 12.3%, driven by benefits from Project 360 and acquisition synergies as well as the inclusion of Joe Hudson's, which is accretive to our adjusted EBITDA margins. To date, we have realized over $60 million in cost savings from the combination of Project 360 and acquisition synergies. This is up from $40 million at the end of 2025. We remain on track to realize an additional $30 million in 2026, and the remaining $50 million expected to be achieved between 2027 and 2029, for a total anticipated savings of $140 million. Same-store sales increased 1.7%. However, adjusting for the weather impact in the South, same-store sales growth would have been approximately 2.6%. Our same-store sales performance has benefited from continued market share gains and the improvement in repairable claims volumes throughout 2025 and Q1 2026. In the first quarter of 2026, based on repairable claims processing data, we estimate that repairable claims volumes declined between 0% and 2%, which is now back in line with our long-term growth framework. This framework contemplates average same-store sales growth of 3% to 5%, supported by continued incremental market share gains driven by ongoing consolidation within the highly fragmented collision repair industry, strong performance with insurance clients and disciplined operational execution. This framework also assumes 3% to 4% annual growth in average total cost of repair and approximately 1% growth in miles driven, partially offset by an approximate 2% decline in repairable claims due to the impact of collision avoidance systems. It is important to note that this framework represents long-term averages. As a result, performance may vary outside of these ranges over shorter periods of time without impacting our confidence in achieving our long-term growth objectives. During recent quarters, the growth in average total cost of repair has fallen below the expected range required to support our long-term growth framework. We expect total cost of repair will return to levels outlined in our framework, driven by lower total losses from rising vehicle prices, increasing vehicle complexity, and continued inflation in parts and labor costs. The positive same-store sales trends we experienced in our business over the past three quarters has continued thus far in the second quarter with same-store sales in April approaching the low end of our long-term range. Complementing same-store sales growth, new location growth remains an important driver of our long-term performance as we continue to target 5% to 7% average annual unit growth over the long term. Same-store sales growth generates strong cash flows that we reinvest to expand our footprint through acquisitions and start-up locations. Funding expansion through internally generated cash flow has proven to be highly accretive over the long term. In the first quarter, we saw strong contributions from new locations. We increased our location footprint by 33% to 1,312 locations at quarter end, including 258 locations acquired through the Joe Hudson's transactions, three single shop acquisitions, and eight new start-ups. We remain focused on market densification through acquisition and new location growth, aiming to be a number one or number two player in the markets we serve. Market density provides the foundation for market share gains, same-store sales growth and increased profitability. We continue to have an active pipeline of new start-ups and development and expect to open five new start-up locations in the second quarter of 2026 with an additional 17 new start-up locations currently under development for the remainder of the year. We expect start-up activity to be complemented by acquisitions of both single shops and small MSOs as we continue to build on the strong momentum we established last year. Turning to Joe Hudson's. We successfully closed the acquisition on January 9, and I'm pleased to report that the integration and synergy realization remains on track. Subsequent to quarter end, we have completed the conversion of all Joe Hudson's locations to our systems and have begun to realize expected synergies. We continue to expect to generate approximately $40 million in synergies from the combination of the Boyd and Joe Hudson's businesses with approximately 50% realized in 2026. Although Joe Hudson's locations experienced some sales disruptions from the storms in Q1 as well as from the store conversion process through the end of April, the conversions are now complete, which allows sales to return to normal projections shortly. We remain on track to realize 50% of the synergies in 2026 and the balance by 2028. I will now turn it over to Jeff to go through the first quarter financial results in more detail. Jeff?
Thanks, Brian. As Brian highlighted, we delivered all-time record first quarter performance with positive same-store sales growth, significant growth from new locations, and strong margin improvement, as we continue to execute on Project 360 and began to realize expected synergies from the Joe Hudson's acquisition. During the first quarter, our sales increased by 28.1% year-over-year to an all-time record $996.7 million, with same-store sales, excluding foreign exchange, increasing by 1.7%. Without the negative impact of storm activity in the South, we estimate that same-store sales growth of 2.6% would have been achieved in the first quarter. In addition, $203.3 million in incremental sales were generated from 339 new locations that were not in operation for the full comparative period. The acquisition of Joe Hudson's, which closed on January 9, 2026, contributed $168 million in sales, while other new location growth contributed an incremental $35.3 million. As mentioned on our fourth quarter 2025 results conference call, same-store sales and Joe Hudson's sales early in the first quarter were negatively impacted by unusual winter storm activity in the U.S. South region, with activity levels returning to normal as the quarter progressed. Gross profit increased 29.1% year-over-year to $463.7 million. Gross margin was 46.5% in the first quarter of 2026 compared to the 46.2% achieved in the same period of 2025. The gross margin percentage benefited from increased parts and paint margins from Project 360 and Joe Hudson's synergy realization, partially offset by a lower mix of glass sales and variability in performance-based pricing. The gross margin was also impacted by lower gross margins inherent in Joe Hudson's business. Turning to operating expenses. For the first quarter of 2026, operating expenses as a percent of sales were 34.2% compared to 35.8% of sales for the same period in 2025. Operating expenses were positively impacted by Project 360, the inclusion of the Joe Hudson's acquisition, which had a lower operating expense ratio, and the mitigating effect of same-store sales growth, which partially offset typical cost increases. Adjusted EBITDA increased 51.9% year-over-year to an all-time record $122.4 million. Adjusted EBITDA margin improved 200 basis points to 12.3% in the first quarter, up from 10.3% in the same period of the prior year. The increase was primarily the result of Project 360 and synergy realization as well as the acquisition of Joe Hudson's, which is accretive to adjusted EBITDA margin. During the quarter, the company realized an incremental $20 million in cost savings from Project 360 and Joe Hudson's synergies, bringing the total savings achieved to date to over $60 million. Net loss for the first quarter of 2026 was $7.9 million compared to a net loss of $2.6 million in the same period of 2025. The net loss was negatively impacted by acquisition and transformational cost initiatives. These costs are expected to decline as integration finalizes. Excluding fair value adjustments, acquisition and transformational cost initiatives, and amortization of intangibles arising from acquisitions, adjusted net earnings for the first quarter of 2026 was $16.1 million or $0.58 per share compared to adjusted net earnings of $6.6 million or $0.31 per share in the same period of the prior year. The company expects onetime costs associated with Project 360 and Joe Hudson's synergies to total approximately $50 million, of which $26.5 million have been recorded to date. During 2026, the company plans to make cash capital expenditures, excluding those related to acquisition and development within the range of 1.6% to 1.8% of sales. In the first quarter, capital expenditures as a percent of sales were 1.3%, excluding sales achieved by Joe Hudson's locations compared to 1.5% of sales in the same period of 2025. We continue to expect capital expenditures related to the Joe Hudson's acquisition to total $30 million with $2.6 million incurred in Q1, and most of the remainder to be spent in 2026. At the end of Q1 2026, the company had total debt net of cash of $2 billion compared to $488 million at the end of the fourth quarter of 2025 and $1.3 billion at the end of Q1 2025. Before lease liabilities, Boyd exited Q1 2026 with net debt of $946 million compared to net cash of $290.1 million at the end of December 2025. The increase in debt compared to the fourth quarter of 2025 reflects the closing of the Joe Hudson's acquisition on January 9, 2026, which had a total transaction value of approximately $1.3 billion. Boyd continues to have strong liquidity to support future growth with ample room available under our credit facility, complemented by strong cash flow generation from our capital-light business model. At the end of the first quarter, pro forma debt leverage declined to approximately 2.9x, down from 3.1x at the end of the fourth quarter of 2025. We continue to expect leverage to reach 2.6x as early as the end of 2026. I will now pass it back to Brian for closing remarks.
Thanks, Jeff. As we look ahead, we are excited by the significant progress being made across the business through our operational and strategic initiatives. We continue to focus on delivering a high-quality experience for our customers and insurance clients while positioning the company to drive sustainable long-term growth. At the same time, initiatives such as Project 360 and the integration of Joe Hudson's are supporting meaningful operational and cost efficiencies that we expect will contribute to long-term margin expansion. Combined with our proven acquisition capabilities and strong financial position, we believe that Boyd remains well positioned to execute on our strategy and continue to grow in the highly fragmented North American collision industry. With that, I would now like to open the call to questions. Operator?
Questions and answers
Operator Instructions. Your first question comes from Derek Lessard with TD Cowen.
Congrats on the quarter. Just maybe one question for me is, could you maybe highlight the biggest buckets of that $20 million incremental cost savings from Project 360 and the integration?
Yes. One of the largest buckets within there in this quarter is the carryover of the indirect headcount action we took last year in April. So that's probably the largest single bucket that's in there, which obviously rolls off then into the second quarter. Beyond that, it's the procurement savings and the other impact of the initiatives we've talked about previously.
Okay. And good news on the normalization of the claims volumes. It looks like your April same-store sales is getting back towards your targeted range. Just curious if you have or maybe talk about any initiatives that you might have in place that could accelerate that growth?
Yes. The one initiative we've had in place for quite some time is a strong focus on client performance. We've linked our GMs' compensation to the performance of the top three clients. We know strong client performance in this industry drives outsized volume and allows us to take market share. So one of the largest things that we're doing is focusing on how we make sure we're performing with clients and getting more opportunities into our stores. As we get those opportunities into our stores, the stores focus on capturing as many of those opportunities as possible. That all comes down to making sure we have the right staff inside our stores. We've spent a lot of time over the past few years working on staffing models and ensuring stores are prepared when volume comes back. Thus far, that has provided meaningful benefit in an environment where claims have been down, and we've been able to deliver outsized performance against them.
Your next question comes from Sabahat Khan with RBC Capital Markets.
This is Bhaven on the line for Sabahat. Can you give an idea of what the landscape and appetite is for tuck-in M&A throughout the second half of this year and onwards?
Can you say that question again? I'm sorry.
Yes. Can you give an idea of what the landscape is and the appetite for tuck-in M&A throughout the second half of this year and onwards?
We still believe opportunities for tuck-in M&A are plentiful in the marketplace. There are over 30,000 locations in the industry and the largest players comprise only a small fraction of that. Our unit growth strategy is focused on three pillars. One is M&A activity, which can be single-shop acquisitions as well as smaller MSOs of five to ten stores that we can continue to acquire with the balance sheet that we have. The other pillar is our brownfield/greenfield strategy, which is our new-to-industry activity. We did eight of those in this quarter, we have five planned to open in the second quarter already, and 17 planned for the balance of the year. It's a good balance between building new locations in markets to build density and taking advantage of M&A opportunities in the marketplace.
Your next question is from Daryl Young with Stifel.
Just wanted to ask around the industry claims activity and the reference to volumes being down 0% to 2% as normalized and indicative of the environment. But claims have been very weak for the last two years. So are we thinking that the absolute number of claims have just stepped lower now and we're going to settle into that? Or is there an argument that claims could actually increase above that 0% to 2% decline?
As we've discussed in the past, we've seen cycles where claims were depressed and then subsequently came back stronger. We saw that coming out of the financial crisis and coming out of COVID. We're prepared if we see a similar pattern. The timing is harder to predict, but history suggests it's possible. What we've been watching are the drivers that were pushing claims negative; as those drivers improve, we've seen the claims environment recover. That points to this being cyclical rather than structural. It was largely due to insurance premium increases and consumer reluctance to file claims. We still think the growth algorithm is intact. Could there be an outsized year in the future? Certainly.
Okay. And just as a follow-up to that, the volumes within your shops, are you able to share where you're at relative to, say, a 2019 level? Or how much latent capacity exists in the network today that could be filled as either claims come back or market share wins drive more volumes for those shops?
We won't share specific volume numbers versus 2019. Every shop is unique, and shops focus on capturing opportunities as they arise and maximizing their potential. We will fluctuate staffing between stores to ensure capacity is where demand is. As we continue to refine that, we put ourselves in a better position to take advantage of incoming opportunities.
Your next question is from Steve Hansen with Raymond James.
So just really quick, what do you think the key factors are that are still keeping the TCOR or the total cost of repair a little more muted here? I'm still a little surprised we haven't started to see the inflationary costs percolating into same-store sales.
There are a couple of factors. We are seeing labor price movement and labor inflation affect TCOR positively. What mutes it is that total losses were elevated in Q1 of last year compared to Q1 of this year. Over the last couple of months, total losses have started coming down, which is positive. They respond as expected when used car prices and the total cost of a car rise. Another impact on average cost of repair is the aging car park. New car sales were depressed over parts of the past five years, so the car park age is skewing older. Older cars have higher propensity for aftermarket part use and more repair versus replace. Newer cars often have more replace activity and OE parts. Older cars can also require different services and lead to higher average repair costs. As new car sales recover, we'll work through this trough and expect the mix to shift back over time.
That's great. And just one follow-up quickly. Going back to the M&A environment. I just wanted to ask about your perception of sellers out there. I know last year and, to a certain degree, the year prior, there was more deal breakage than ever before given the claims environment. Do you think sellers have started to rebaseline their expectations to more of the current environment that should allow you to accelerate that M&A flywheel? I'm trying to get a sense for the pushback that had been there in getting deals done.
As volume comes back into the marketplace, it tends to come back to bigger players fastest because of DRP relationships and insurers relying on larger operators to help reduce loss adjustment expenses. Smaller single-shop operators and smaller MSOs feel the pain longer and become more susceptible to selling. We're seeing more small MSO activity in the space; we did four such transactions last year. The opportunity to continue consolidating the space is as good as ever. Our balance sheet is well positioned, and we consider ourselves a buyer of choice.
Your next question is from Nathan Po with National Bank Capital Markets.
So it seems like most, if not all, forward-looking indicators are pointing to tailwinds on same-store sales growth. Can you walk us through your expectations or anything related to the timing of that recovery towards your long-term range?
The sequential improvement quarter after quarter in claims environment is the key indicator. As those drivers that had been negative become less negative, it positively impacts the environment. We're now in that 0% to 2% range, which is more normal from a volume perspective. We still expect 3% to 4% growth from total cost of repair. Average labor rates for insurance carriers increase each year, parts prices rise with inflation, and those are pass-throughs for us. The headwind now is the mix effect of total losses; as total losses come down, the muting impact will wane and we expect to be back in the normal range. Our focus is taking as much volume as we can; based on the industry claims environment and our arrivals and vehicle volumes, we know we're taking share and will continue to do so.
All right. And for my follow-up, I just want to get some more color on your outlook for April. Was there any carryover backlog from the storm season that was of any benefit to April?
Probably not more than minimal. In Q1 we saw storm activity in the North partially offset by storm activity in the South, with the South negatively impacting the business to a greater extent than the North's positive impact. We're largely through the work that would have come out of that, so I wouldn't read any more into carryover on storm activity, either positive or negative.
Your next question comes from Krista Friesen with CIBC.
Just on the same-store sales growth number for the quarter. Can you give a little bit more color on what changed through the last few weeks of March? Given when you had reported Q4, it sounded like you had expected same-store sales to be in line with Q4. At that point, we already knew about the winter storms in the South.
We do not comment on monthly results. There is some monthly variability in same-store sales, which is normal in our business due to factors like timing of month end, holidays and weather patterns. For example, if the month ended on a Monday or Tuesday, that's typically not favorable for month end results. The difference between 2.2% and 1.7% is about $3 million of sales, and on $1 billion of revenue that's a relatively small difference. That's why we guide to a longer-term objective. Looking back historically, for example in 2008, 40% of quarters were below the 3% to 5% range and 44% were above, but on a five-year basis we're up 8.8%, on a ten-year basis we're up 4.3%, and on a fifteen-year basis we're up 4.6% on same-store sales. Monthly variations happen and are why we focus on the longer-term 3% to 5% guide. In this quarter, new unit growth was a significant part of positive performance; 28% sales growth in the quarter was driven by both Joe Hudson's and new locations, and that is what makes this business' growth algorithm tick.
I appreciate the color there. For my follow-up, any comments or thoughts on how you're thinking about the summer driving season and where gas prices are at the moment?
There are periods historically where elevated gas prices have had varying effects. In 2008, gas prices were elevated and vehicle miles traveled (VMT) came down, but that period also had high unemployment so it isn't a perfect comparison. In 2022, another period with elevated gas prices, average VMT continued to grow slightly. Other factors that historically contribute to reduced driving aren't present now. Also, the cost of air travel is elevated, which may lead some families to drive rather than fly, which could support demand. We haven't seen negative impacts associated with current gas prices.
We have another question.
Just a couple of quick ones here. You reached your 80% internalization of calibration goal. I know you're not targeting 100%, but how should we think about a continued move upward there? And where do you think it finally shakes out?
We've reached the 80% target and are pleased to have achieved it. That doesn't mean we slow down hiring or reduce the objective of continuing to increase internalization. There's a balance between staffing for very high internalization and the idle capacity that can come with it, and the margin benefit associated with internalization. We are focused on keeping technicians productive and will continue to inch up on internalization. Some markets are above 80%, some in the 90s. We're focused on hiring technicians to take care of as much demand as possible. We're also pleased we've beaten the expected time frame for realizing this initiative and the team has done a great job capturing the opportunity.
It's important to remember that the calibration market continues to expand. Even with the targeted level of technicians in place, the market will expand and grow, so we should still see further benefits coming through our gross margin as the market grows.
Perfect. I appreciate the color. Maybe one more quick one on the Joe Hudson's side. Their stores make a little bit less on average than yours. Can you give us any color on the opportunity there, maybe some revenue synergies and the timing that you could see those?
I've spent quite a bit of time in Joe Hudson's locations over the past four months and remain encouraged by the opportunity. We accelerated the conversion process and converted 258 stores in just under a three-month period, which was a significant operational effort and the team did a phenomenal job. That conversion gave us visibility into the business similar to our legacy Boyd and Gerber operations, including more data and focus on client performance. I see the opportunity in those locations to be as good, if not better, than expected when we acquired them. Q1 was impacted by weather and the conversion process, but those impacts work themselves out as we move into Q2. The focus now is driving car count, capture rates, and client experience in those locations, and I expect meaningful top-line benefit as we do that.
Our next question is from Gary Ho with Desjardins Capital Markets.
First question, wondering if we can get an update on the Mitchell platform onboarding. Are you seeing early benefits and market share gains with the key insurer? I believe you mentioned Joe Hudson's is on that platform already. Anything you've learned or conversations with them?
We continue to have conversations. There has been no meaningful benefit in results to date, which I view as good news because there is still a tailwind potential as we work the relationship. We have implemented Mitchell in every location and are on a pathway to get our teams trained. In many stores we already use Mitchell, so training is not required everywhere. Where there are gaps, we are training estimators to use it and making sure that when the opportunity is unlocked we are ready to take advantage of it.
Okay. Great. And then my follow-up is more of a capital allocation question. I get that you plan to deleverage back down to 2.6x as early as the end of this year. But given the shares are down 30% year-to-date, is there a path where you'd consider buybacks over slowing down the deleveraging or slowing down M&A and greenfield/brownfield build-out perhaps?
No, I don't think that's in the cards in the near term. We have many opportunities to expand the footprint and take advantage of growth opportunities, and in the long term we feel expansion is the best use of capital.
Your next question is from Chris Murray with ATB Capital Markets.
Maybe turning back to the margin profile we've seen over the last couple of quarters. We've seen some meaningful improvement — you called out about 200 basis points this quarter. A couple of pieces of this question: related to the storms, was there any unusual costs we should be thinking about? I know Q1 is historically a bit lower, but just anything to think about there. And more importantly, as we go through the year, you called out synergies and other improvements, guiding to about 150 basis points over the full year, but it looks like we're a little ahead of that pace at this point. Any thoughts around how you'll be able to improve margins on a go-forward basis would be helpful.
The objective is to continue working toward the 14% plus range. Historically Q1 can be about 100 basis points lower due to resetting accruals and excess costs that sit in the first quarter. We saw a number consistent with that this quarter. We also had benefits from incremental projects and the mix effect from bringing Joe Hudson's in, which put us at 12.3% this quarter. Typically, Q1 to Q2 we see that 100 basis point bounce back, so you might expect a rebound in Q2 consistent with historical patterns. Looking at year-over-year comparisons, those dynamics explain much of the movement. We realized $40 million of Project 360 savings last year, expect $30 million of incremental Project 360 savings this year, and now expect $20 million of Joe Hudson's synergies for a total of $90 million of realized benefit over that period. Those savings should push us closer to the 14% target by the fourth quarter.
Okay. That's helpful. One other question: about your mobile calibration services. You have operations in the U.S. and Canada. As the market needs more scanning and calibration, how do you think those mobile services will play out? How do you see them working across your networks and any benefits they bring outside of incremental growth?
In the future, I expect a large collection of mobile assets that can be deployed to do external work. As calibration penetration increases and calibrations per shop increase, the need for in-shop calibration techs will grow, and we'll likely perform almost all calibrations internally. Mobile teams can then be deployed externally to support single-shop operators that may not be able to invest in equipment for calibrations. Today, the focus is internalizing our own work and driving profitability from that. In the long term, we expect mobile calibration to be a revenue stream that grows at an outsized rate, perhaps 20% to 25% a year, which we can take advantage of externally.
Your next question is from Mark Jordan with Goldman Sachs.
First, a follow-up on total cost of repair. You made comments about seeing more repair versus replace given the age mix. Can you share anything you're seeing in terms of parts inflation and how that might be impacted by the mix of OEM and aftermarket parts you're using?
We continue to see a normal environment of parts inflation. There has been some slight competitive activity in the aftermarket parts space that could put pressure on aftermarket parts, but we still have tariff considerations and general inflation. Elevated gas prices can increase the cost of transporting parts, which can push pricing. Right now the bigger challenge muting TCOR is the car park age and mix. As the mix shifts back and new car sales recover, we'll expect higher-dollar tickets to manifest more prominently in TCOR.
As a follow-up, how do you feel about your current labor levels and ability to meet demand if volumes continue to improve throughout the remainder of the year? And what are you seeing in terms of technician wage inflation?
Technician wage inflation is roughly in line with normal CPI levels. We're always hiring technicians; the advantage we have is that technicians want to go where there's work because they are paid for hours produced. Having work makes recruitment easier. We focus on hiring technicians every day and remain focused on placing capacity where it's needed.
Your next question is from Bret Jordan with Jefferies.
On total loss rates, could you tell us what the number was for the first quarter? And it sounds like you expect it to continue to come down. Could you give color as to where we should expect total loss rate ranges to be in the next year or two, in the intermediate term?
I won't try to predict the future trend precisely. The industry total loss rate was 23.6% as of the end of Q1 2026. Internally we tend to be below the industry total loss rate because many total losses never reach a shop. Our internal numbers were slightly elevated year-over-year from Q1 of last year, but I've seen those come down. From the peak around September of last year, we have seen declines of roughly 200 to 300 basis points, so there has been meaningful change as used car prices have increased.
Okay. And then contribution from scanning and calibration — is that comparable to labor margin? Or are you effectively charging insurers a better return because of the technology and equipment involved?
I think of calibration as more akin to a labor operation that carries labor margin associated with it.
Your next question is from William Staudinger with BMO Capital Markets.
Beyond the weather headwinds you highlighted in your southern markets, can you comment on trends you saw across your other regions and if there are any pockets of relative strength you want to call out?
A pocket of relative strength was the North, where we saw more snow events. As we exited winter and moved into spring, we started to see hail events impacting both the South and the North, even affecting some of our Western markets. Weather was impactful in the South in Q1 because snow in the South curtails driving while snow in the North increases accidents. We had more snow events in the North than historically, which benefited the North, but that was more than offset by a three-day storm affecting Texas, Oklahoma and the Carolinas. At one point nearly 100 locations were shut down because people couldn't get into work, which negatively impacted the business. The good news is that event is behind us. Such temporal events can affect a given quarter but don't indicate anything structural about the underlying business.
Okay. And can you give an update on used car prices and insurance premiums within the quarter?
Manheim data for April suggests used car prices were up 1.8% in April. Insurance premiums are essentially flat; the last data I saw suggested they were up 0.8% overall, and they were up 0.2% in the month of April, so auto insurance premiums are largely flat relative to CPI at this point.
Your next question is from Jonathan Goldman with Scotiabank.
Maybe first, it looks like the outperformance gap relative to the industry narrowed in Q1. You had been tracking 500 basis points plus; this quarter looked more like 250 basis points. Even normalizing for weather it seems like around 350 basis points. Any color on that trend?
I don't see anything particularly notable. You'll see quarter-to-quarter fluctuations, including storm impacts, and our concentration of stores in the South can affect us differently than others. As we begin to lap benefits associated with compensation changes that increased focus on performance, you'll also see variation. In the long run, we expect 100 to 300 basis points of market share gains to support our 3% to 5% same-store sales target. Being in the 300 to 500 basis point outperformance range is still positive.
Okay. And maybe one more: you had said last year it could be conceivable to be above the 3% to 5% range early this year as comps ease. You offered color earlier about TCOR being held back a bit, which fills in the delta. Is there anything else that was different versus your expectations back then to how things played out this quarter?
No, that explanation about TCOR and mix effects fills in and more than fills the delta. If we had the normal price movement historically, we would be outside the range.
And one more: thinking about the long-term growth algorithm, does baking in the 3% to 4% increase in average cost of repair come at the expense of repairable claims volumes? One headwind has been insurance inflation affecting claims volumes. What gives you confidence that we can get back to this 3% to 4% inflation and still maintain historical claims volume ranges?
The 3% to 4% is driven not only by pure inflation but also by complexity of repair. For example, calibrations average just north of $500 per calibration and are increasing in prevalence, which drives cost up. So it's not pure inflation; complexity plays a major role. The algorithm calls for claims volume to be down about 2%, partially offset by 3% to 4% of price and complexity growth. The price piece might be half of that and complexity the other half, including increased hours and calibration services, while labor rate increases track normal CPI.
At this time, there are no further questions. I'll now turn the call back over to Brian for any closing remarks.
Thank you. I want to again thank the team for all the hard work and efforts in the quarter. With that, I thank you, operator, and thank you all once again for joining the call today. We look forward to reporting our second quarter results in August. Thanks again, and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.