Financial Data and Key Metrics Changes - The company generated $4.4 billion in revenue, with a gross profit of $752 million and a gross profit margin of 17.2% [11] - Adjusted operating margin was 5.8%, and adjusted earnings per share (EPS) was $7.43, with adjusted EBITDA at $256 million [12][19] - Adjusted net income for the quarter was $146 million, with a non-cash deferral headwind of $0.43 per share due to TCA [19][20] Business Line Data and Key Metrics Changes - Same store revenue for new vehicles increased by 9% year over year, with units up by 7% and average gross profit per vehicle at $3,611 [12][12] - Used vehicle unit volume decreased by 4% year over year, with retail gross profit per unit at $17,290, marking the fourth quarter of sequential growth [13][14] - Parts and service gross profit increased by 7%, with a gross profit margin of 59.2% and a fixed absorption rate over 100% [16][17] Market Data and Key Metrics Changes - The same store new day supply was 59 days at the end of June, while the used day supply of inventory was 37 days [12][14] - The company noted strong demand in the second quarter, although a decline was observed as the quarter progressed due to tariff impacts [8] Company Strategy and Development Direction - The company is focused on integrating the Herb Chambers acquisition and optimizing its portfolio by divesting nine stores, which generated proceeds of $250 million to $270 million [11][25] - The transition to Techeon is a key investment aimed at improving operational efficiency and guest experience, with full conversion expected by 2027 [10][60] - The company aims to reduce leverage over the next 12 to 18 months while remaining opportunistic with share repurchases [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing the resilience of the automotive retail business despite potential headwinds from tariffs and market conditions [81][82] - The company anticipates that the second half of the year will depend heavily on tariff decisions and their impact on consumer pricing [8][19] Other Important Information - The average age of passenger cars on the road is 14.5 years, indicating a strong potential for service growth in the parts and service business [18] - The company has a transaction-adjusted net leverage ratio of 2.46 times, which is expected to be above the target range following the Chambers acquisition [23][24] Q&A Session Summary Question: Can you walk through the cadence of GPU and units as the quarter progressed? - Management noted that GPUs started strong but adjusted as the quarter progressed, with expectations for GPUs to fall into the $2,500 to $3,000 range [27][30] Question: What initiatives are keeping SG&A under control? - The focus is on productivity per employee and maintaining discipline on headcount, with some costs related to Techeon conversion impacting the SG&A numbers [34][35] Question: What opportunities for improvement exist with the Herb Chambers acquisition? - Management highlighted the luxury mix and market presence of Herb Chambers, indicating potential for operational efficiencies and improved metrics [39][41] Question: How does the company plan to maintain parts and service growth amid tougher comparisons? - Management expressed confidence in maintaining mid-single-digit growth in parts and service, despite anticipated headwinds from warranty work [42][45] Question: What is the strategy regarding used GPUs and inventory? - The strategy remains focused on maximizing gross profit rather than volume, with continuous assessment of market conditions [54][56] Question: What are the implementation costs for Techeon? - Implementation costs for Techeon were approximately $2 million in the quarter, split between duplication and third-party audit costs [62]

Financial Data and Key Metrics Changes - The company generated $4.4 billion in revenue for Q2 2025, with a gross profit of $752 million and a gross profit margin of 17.2% [11] - Adjusted operating margin was reported at 5.8%, with adjusted earnings per share (EPS) at $7.43 and adjusted EBITDA at $256 million [12][19] - Adjusted net income for the quarter was $146 million, with a non-cash deferral headwind of $0.43 per share due to TCA [19][20] Business Line Data and Key Metrics Changes - Same store revenue for new vehicles increased by 9% year over year, with units sold up by 7% and average gross profit per vehicle at $3,611 [12][13] - Used vehicle unit volume decreased by 4% year over year, but used retail gross profit per unit increased to $17,290, marking the fourth quarter of sequential growth [13][14] - Parts and service gross profit increased by 7%, with a gross profit margin of 59.2% and a fixed absorption rate over 100% [16][17] Market Data and Key Metrics Changes - The same store new day supply was 59 days at the end of June, while the used day supply of inventory was 37 days [12][14] - The company noted strong performance in the Stellantis brand, with a 15.6% increase in volume compared to a national sales decline of 11.5% [12][13] Company Strategy and Development Direction - The company is focusing on integrating the Herb Chambers acquisition and optimizing its portfolio by divesting nine stores, which generated proceeds of $250 million to $270 million [11][25] - The transition to Techeon is a key investment aimed at improving operational efficiency and guest experience, with full conversion expected by 2027 [10][62] - The company aims to reduce leverage over the next 12 to 18 months while remaining opportunistic with share repurchases [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, despite potential headwinds from tariffs and market conditions, emphasizing the resilience of the automotive retail business [81][72] - The company anticipates that the second half of the year will depend heavily on tariff decisions and consumer pricing [8][19] - Management highlighted the importance of maintaining productivity per employee to control SG&A expenses amid potential volume declines [34][35] Other Important Information - The average age of passenger cars on the road is 14.5 years, indicating a growing opportunity for service growth [18] - The company ended Q2 with $1.1 billion in liquidity and a transaction-adjusted net leverage ratio of 2.46 times [23][24] Q&A Session Summary Question: Can you walk through the cadence of GPU and units as the quarter progressed? - Management noted that GPUs started strong but adjusted as the quarter progressed, with expectations of falling into the $2,500 to $3,000 range [27][28] Question: What initiatives are keeping SG&A under control? - The focus is on employee productivity and managing outside services, with some costs related to Techeon conversion impacting the SG&A ratio [34][35] Question: What opportunities exist for improving metrics post-Herb Chambers acquisition? - Management sees opportunities in luxury vehicle sales and operational efficiencies, emphasizing the strategic importance of the New England market [40][42] Question: How does the company plan to maintain parts and service growth amid tougher comparisons? - Management is confident in maintaining mid-single-digit growth, leveraging customer pay work to offset warranty headwinds [43][46] Question: What is the impact of tariffs on inventory and production? - Management indicated that while inventory is lean, it has not been negatively affected beyond normal operating levels, and OEMs have been preparing for tariff impacts [66][67] Question: Is California a potential market for future expansion? - Management stated that California is not currently a focus due to franchise laws and better investment opportunities in other states [69][70]

Core Insights - Asbury Automotive Group reported $4.37 billion in revenue for Q2 2025, a 3% year-over-year increase, with an EPS of $7.43 compared to $6.40 a year ago, indicating an EPS surprise of +8.94% against the consensus estimate [1] Financial Performance - Revenue of $4.37 billion was below the Zacks Consensus Estimate of $4.45 billion, representing a surprise of -1.73% [1] - Unit sales for new vehicles were 44,437, slightly below the average estimate of 45,291 [4] - Unit sales for used vehicle retail were 36,233, compared to the average estimate of 36,382 [4] - Average selling price for new vehicles was $51.85 billion, slightly lower than the average estimate of $52.01 billion [4] - Revenues from new vehicles were $2.3 billion, a 6.4% year-over-year increase, compared to the average estimate of $2.31 billion [4] - Revenues from used vehicles were $1.29 billion, a -1.7% change year-over-year, below the average estimate of $1.32 billion [4] - Revenues from parts and service were $601.5 million, a 3.6% year-over-year increase, below the average estimate of $624.93 million [4] - Revenues from finance and insurance net were $182 million, a -5.4% change year-over-year, below the average estimate of $203.25 million [4] - Revenues from used vehicle retail were $1.13 billion, a -3.2% change year-over-year, below the average estimate of $1.15 billion [4] - Revenues from used vehicle wholesale were $156.3 million, a 10.9% year-over-year increase, above the average estimate of $153.27 million [4] Stock Performance - Asbury Automotive shares returned -3.9% over the past month, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Highlights - Asbury's revenue has increased by 138% since 2019, with a Compound Annual Growth Rate (CAGR) of +19%[13] - Adjusted Earnings Per Share (EPS) has increased by 188% since 2019, with a CAGR of +24%[13] - The number of new car dealerships has increased by 73% since 2019[13] - Total revenue reached $173 billion[17], with 320118 new and used vehicles retailed[18] Financial Performance (2Q25) - Total company revenue increased by 3%, with same-store revenue up by 5%[34] - New vehicle revenue increased by 6%, with same-store revenue up by 9%[34] - Used vehicle retail decreased by 3%, with same-store retail down by 1%[34] - Parts & Service revenue increased by 4%, with same-store revenue up by 6%[34] Total Care Auto (TCA) - TCA standalone pre-tax income is estimated to be $75 million in 2025[53] - Consolidated TCA pre-tax income is estimated to be $35 million in 2025[53] Herb Chambers Acquisition - The acquisition is valued at approximately $145 billion[77] - Herb Chambers generated $29 billion in revenue in FY2024[69] - The acquisition is expected to increase Asbury's luxury brand mix from 30% to 35%[81]

Asbury Automotive Group (ABG) came out with quarterly earnings of $7.43 per share, beating the Zacks Consensus Estimate of $6.82 per share. This compares to earnings of $6.4 per share a year ago. These figures are adjusted for non-recurring items. While Asbury Automotive has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the ...

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1%20Second%20Quarter%202025%20Financial%20Highlights) The company reported strong Q2 2025 results with significant net income growth driven by revenue and gross profit increases Second Quarter 2025 Key Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | | Net Income | $153M | $28M | 443% | | Adjusted Net Income (non-GAAP) | $146M | $129M | 13% | | Diluted EPS | $7.76 | $1.39 | 458% | | Adjusted Diluted EPS (non-GAAP) | $7.43 | $6.40 | 16% | | Revenue | $4.4B | $4.246B | 3% | | Gross Profit | $752M | $730.7M | 3% | - Achieved an all-time record **Parts & Service gross profit of $355 million** in Q2 2025[4](index=4&type=chunk) - Reported **fourth consecutive quarter of sequential improvement** in same store Used Retail gross profit per unit[4](index=4&type=chunk) [Strategic Business Updates](index=1&type=section&id=1.2%20Strategic%20Business%20Updates) The company advanced its portfolio optimization through a major acquisition and several store divestitures - Completed the acquisition of The Herb Chambers Automotive Group, which was the sixteenth largest privately-owned dealership group with approximately **$3 billion in annual revenue**[3](index=3&type=chunk)[4](index=4&type=chunk) - Divested nine stores between April 1, 2025, and July 28, 2025, generating net proceeds of **$250 - $270 million** as part of ongoing capital allocation and portfolio optimization[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=2.%20Consolidated%20Financial%20Results) [Income Statement Overview](index=6&type=section&id=2.1%20Income%20Statement%20Overview) Q2 2025 net income grew significantly due to higher revenue, gross profit, and a sharp reduction in asset impairments Consolidated Statements of Income (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Total Revenue | $4,373.1 | $4,246.2 | 3% | | Gross Profit | $751.9 | $730.7 | 3% | | Income from Operations | $257.4 | $100.5 | NM | | Income Before Income Taxes | $203.8 | $38.0 | NM | | Net Income | $152.8 | $28.1 | NM | | Diluted EPS | $7.76 | $1.39 | NM | Consolidated Statements of Income (Six Months Ended June 30, 2025 vs. 2024) | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | % Change | | :-------------------------- | :------------------ | :------------------ | :--------- | | Total Revenue | $8,521.6 | $8,447.4 | 1% | | Gross Profit | $1,476.1 | $1,480.7 | NM | | Income from Operations | $491.7 | $363.3 | 35% | | Income Before Income Taxes | $379.2 | $233.9 | 62% | | Net Income | $284.9 | $175.2 | 63% | | Diluted EPS | $14.46 | $8.64 | 67% | - Asset impairments **significantly decreased from $135.4 million in Q2 2024 to $0 in Q2 2025**, contributing to the improved income from operations[24](index=24&type=chunk) [Balance Sheet and Liquidity](index=3&type=section&id=2.2%20Balance%20Sheet%20and%20Liquidity) The company maintained strong liquidity and an improved net leverage ratio while effectively managing inventory levels Selected Balance Sheet Data (June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :-------------------------- | :----------------------- | :---------------------- | :---------------- | | Cash and cash equivalents | $54.8 | $69.4 | $(14.7) | | Inventory, net | $1,942.2 | $1,978.8 | $(36.6) | | Total current assets | $3,129.6 | $3,137.9 | $(8.3) | | Floor plan notes payable | $1,288.6 | $1,694.7 | $(406.1) | | Total current liabilities | $2,403.1 | $2,836.3 | $(433.3) | | Long-term debt | $3,045.0 | $3,138.6 | $(93.6) | | Shareholders' equity | $3,777.0 | $3,502.1 | $274.9 | Inventory Days Supply | Category | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :-------------------- | :------------ | :----------- | :------------ | | New vehicle inventory | 59 | 49 | 72 | | Used vehicle inventory | 37 | 37 | 38 | - Total liquidity as of June 30, 2025, was **$1.1 billion**, comprising $318 million in cash and floorplan offset accounts and $798 million availability under the used vehicle floorplan line and revolver, with a transaction adjusted net leverage ratio of **2.46x**[10](index=10&type=chunk) [Detailed Operating Performance](index=9&type=section&id=2.3%20Detailed%20Operating%20Performance) Q2 2025 operating performance showed growth in new vehicle and parts & service, with mixed results in used vehicles [Revenue and Gross Profit by Category](index=9&type=section&id=2.3.1%20Revenue%20and%20Gross%20Profit%20by%20Category) Revenue growth was driven by new vehicles and parts & service, with the latter being the largest gross profit contributor Revenue by Category (Q2 2025 vs. Q2 2024) | Category | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------ | :----------------- | :----------------- | :--------- | | New vehicle | $2,303.9 | $2,164.9 | 6% | | Used vehicle retail | $1,129.4 | $1,167.2 | (3)% | | Used vehicle wholesale | $156.3 | $140.9 | 11% | | Parts and service | $601.5 | $580.9 | 4% | | Finance and insurance, net | $182.0 | $192.4 | (5)% | | **Total Revenue** | **$4,373.1** | **$4,246.2** | **3%** | Gross Profit by Category (Q2 2025 vs. Q2 2024) | Category | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------ | :----------------- | :----------------- | :--------- | | New vehicle | $160.0 | $155.1 | 3% | | Used vehicle retail | $62.3 | $56.4 | 11% | | Used vehicle wholesale | $6.6 | $4.6 | 43% | | Parts and service | $354.8 | $339.9 | 4% | | Finance and insurance, net | $168.1 | $174.7 | (4)% | | **Total Gross Profit** | **$751.9** | **$730.7** | **3%** | Revenue Mix (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | New vehicle | 52.7% | 51.0% | | Used vehicle retail | 25.8% | 27.5% | | Used vehicle wholesale | 3.6% | 3.3% | | Parts and service | 13.8% | 13.7% | | Finance and insurance, net | 4.2% | 4.5% | | **Total Revenue** | **100.0%** | **100.0%** | Gross Profit Mix (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | New vehicle | 21.3% | 21.2% | | Used vehicle retail | 8.3% | 7.7% | | Used vehicle wholesale | 0.9% | 0.6% | | Parts and service | 47.2% | 46.5% | | Finance and insurance, net | 22.4% | 23.9% | | **Total Gross Profit** | **100.0%** | **100.0%** | [Unit Sales and Average Selling Price](index=11&type=section&id=2.3.2%20Unit%20Sales%20and%20Average%20Selling%20Price) New vehicle unit sales rose while used vehicle sales declined, with modest price increases for both categories Unit Sales (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle: Luxury | 9,318 | 8,719 | 7% | | New vehicle: Import | 22,884 | 22,663 | 1% | | New vehicle: Domestic | 12,235 | 11,297 | 8% | | **Total new vehicle** | **44,437** | **42,679** | **4%** | | Used vehicle retail | 36,233 | 38,534 | (6)% | | Used to new ratio | 81.5% | 90.3% | - | | **Total new vehicle (YTD)** | **85,933** | **83,356** | **3%** | | **Used vehicle retail (YTD)** | **71,648** | **78,023** | **(8)%** | Average Selling Price (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle | $51,846 | $50,725 | 2% | | Used vehicle retail | $31,171 | $30,289 | 3% | | **New vehicle (YTD)** | **$51,691** | **$50,736** | **2%** | | **Used vehicle retail (YTD)** | **$30,822** | **$30,229** | **2%** | [Gross Profit Per Unit and Margins](index=11&type=section&id=2.3.3%20Gross%20Profit%20Per%20Unit%20and%20Margins) Used vehicle GPPU increased significantly while new vehicle GPPU slightly declined, maintaining a stable total gross margin Average Gross Profit Per Unit (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle: Luxury | $7,214 | $6,830 | 6% | | New vehicle: Import | $2,490 | $2,590 | (4)% | | New vehicle: Domestic | $2,927 | $3,260 | (10)% | | **Total new vehicle** | **$3,601** | **$3,633** | **(1)%** | | Used vehicle retail | $1,720 | $1,463 | 18% | | Finance and insurance | $2,084 | $2,151 | (3)% | | Front end yield | $4,840 | $4,755 | 2% | Gross Margin (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | Change (bps) | | :-------------------- | :------ | :------ | :----------- | | Total new vehicle | 6.9% | 7.2% | (22) bps | | Used vehicle retail | 5.5% | 4.8% | 69 bps | | Parts and service | 59.0% | 58.5% | 47 bps | | **Total gross profit margin** | **17.2%** | **17.2%** | **(1) bps** | [Operating Expenses](index=11&type=section&id=2.3.4%20Operating%20Expenses) Stable SG&A expenses led to a significant reduction in SG&A as a percentage of gross profit Operating Expenses (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------------------ | :----------------- | :----------------- | :--------- | | Selling, general and administrative | $475.5 | $476.5 | NM | | SG&A as a % of gross profit | 63.2% | 65.2% | (198) bps | | Adjusted SG&A as a % of gross profit | 63.6% | 64.8% | (119) bps | | Income from operations as a % of revenue | 5.9% | 2.4% | 352 bps | | Adjusted income from operations as a % of revenue | 5.8% | 5.6% | 18 bps | [Same Store Financial Results](index=2&type=section&id=3.%20Same%20Store%20Financial%20Results) [Same Store Revenue and Gross Profit](index=2&type=section&id=3.1%20Same%20Store%20Revenue%20and%20Gross%20Profit) Q2 2025 same store results showed robust growth in revenue and gross profit, led by new vehicles and parts & service Same Store Revenue (Q2 2025 vs. Q2 2024) | Category | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------ | :----------------- | :----------------- | :--------- | | New vehicle | $2,268.0 | $2,087.6 | 9% | | Used vehicle retail | $1,114.1 | $1,128.8 | (1)% | | Used vehicle wholesale | $154.3 | $137.4 | 12% | | Parts and service | $590.8 | $559.3 | 6% | | Finance and insurance, net | $180.1 | $187.6 | (4)% | | **Total Revenue** | **$4,307.3** | **$4,100.7** | **5%** | Same Store Gross Profit (Q2 2025 vs. Q2 2024) | Category | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------ | :----------------- | :----------------- | :--------- | | New vehicle | $157.6 | $151.6 | 4% | | Used vehicle retail | $61.6 | $55.7 | 11% | | Used vehicle wholesale | $6.5 | $4.7 | 40% | | Parts and service | $349.5 | $327.9 | 7% | | Finance and insurance, net | $166.2 | $169.9 | (2)% | | **Total Gross Profit** | **$741.5** | **$709.8** | **4%** | [Same Store Unit Sales and Average Selling Price](index=12&type=section&id=3.2%20Same%20Store%20Unit%20Sales%20and%20Average%20Selling%20Price) Same store new vehicle unit sales increased while used vehicle sales decreased, with price growth in both segments Same Store Unit Sales (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle: Luxury | 9,318 | 8,719 | 7% | | New vehicle: Import | 22,306 | 21,174 | 5% | | New vehicle: Domestic | 12,019 | 10,947 | 10% | | **Total new vehicle** | **43,643** | **40,840** | **7%** | | Used vehicle retail | 35,648 | 37,027 | (4)% | | Used to new ratio | 81.7% | 90.7% | - | Same Store Average Selling Price (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle | $51,967 | $51,116 | 2% | | Used vehicle retail | $31,252 | $30,487 | 3% | [Same Store Gross Profit Per Unit and Margins](index=12&type=section&id=3.3%20Same%20Store%20Gross%20Profit%20Per%20Unit%20and%20Margins) Same store used vehicle GPPU rose significantly, offsetting a slight decline in new vehicle GPPU for a stable total margin Same Store Average Gross Profit Per Unit (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | % Change | | :-------------------- | :------ | :------ | :--------- | | New vehicle: Luxury | $7,221 | $6,838 | 6% | | New vehicle: Import | $2,479 | $2,645 | (6)% | | New vehicle: Domestic | $2,914 | $3,284 | (11)% | | **Total new vehicle** | **$3,611** | **$3,711** | **(3)%** | | Used vehicle retail | $1,729 | $1,503 | 15% | | Finance and insurance | $2,096 | $2,182 | (4)% | | Front end yield | $4,861 | $4,844 | NM | Same Store Gross Margin (Q2 2025 vs. Q2 2024) | Category | Q2 2025 | Q2 2024 | Change (bps) | | :-------------------- | :------ | :------ | :----------- | | Total new vehicle | 6.9% | 7.3% | (31) bps | | Used vehicle retail | 5.5% | 4.9% | 60 bps | | Parts and service | 59.2% | 58.6% | 53 bps | | **Total gross profit margin** | **17.2%** | **17.3%** | **(9) bps** | [Same Store Operating Expenses](index=12&type=section&id=3.4%20Same%20Store%20Operating%20Expenses) A slight increase in same store SG&A expenses was offset by improved operational efficiency as a percentage of gross profit Same Store Operating Expenses (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :------------------------------------ | :----------------- | :----------------- | :--------- | | Selling, general and administrative | $466.2 | $459.3 | 2% | | Adjusted selling, general and administrative | $469.0 | $456.2 | 3% | | SG&A as a % of gross profit | 62.9% | 64.7% | (183) bps | | Adjusted SG&A as a % of gross profit | 63.2% | 64.3% | (103) bps | [Segment Reporting](index=14&type=section&id=4.%20Segment%20Reporting) [Dealerships and Total Care Auto (TCA) Performance](index=14&type=section&id=4.1%20Dealerships%20and%20Total%20Care%20Auto%20(TCA)%20Performance) Both Dealerships and TCA segments contributed to revenue and operating income growth, with dealerships as the primary driver Segment Revenue from External Customers (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------ | :----------------- | :----------------- | | Dealerships | $4,293.6 | $4,170.8 | | TCA | $79.5 | $75.4 | | **Total Consolidated Revenue** | **$4,373.1** | **$4,246.2** | Segment Operating Income (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------ | :----------------- | :----------------- | | Dealerships | $232.1 | $193.3 | | TCA | $18.5 | $18.3 | | **Total Segment Operating Income** | **$250.6** | **$211.7** | Segment Revenue from External Customers (YTD June 30, 2025 vs. 2024) | Segment | YTD 2025 (Millions) | YTD 2024 (Millions) | | :------------------------ | :------------------ | :------------------ | | Dealerships | $8,358.0 | $8,297.9 | | TCA | $163.6 | $149.5 | | **Total Consolidated Revenue** | **$8,521.6** | **$8,447.4** | Segment Operating Income (YTD June 30, 2025 vs. 2024) | Segment | YTD 2025 (Millions) | YTD 2024 (Millions) | | :------------------------ | :------------------ | :------------------ | | Dealerships | $440.5 | $413.8 | | TCA | $39.6 | $37.6 | | **Total Segment Operating Income** | **$480.1** | **$451.4** | [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=5.%20Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Non-GAAP Financial Disclosure Principles](index=4&type=section&id=5.1%20Non-GAAP%20Financial%20Disclosure%20Principles) The company uses non-GAAP measures to provide insight into core operational performance by excluding non-recurring items - Management evaluates results using non-GAAP measures like 'Adjusted income from operations,' 'Adjusted net income,' 'Adjusted operating margins,' 'Adjusted EBITDA,' 'Adjusted diluted EPS,' 'Adjusted SG&A,' 'Adjusted operating cash flow,' 'Transaction adjusted EBITDA,' and 'Transaction adjusted net leverage ratio' to assess strategic decisions and initiatives[18](index=18&type=chunk) - Non-GAAP measures are not defined under GAAP and may not be comparable to similarly titled measures used by other companies; they are presented for more complete and consistent comparisons of operational performance but should not receive undue reliance[20](index=20&type=chunk) - Transaction Adjusted Metrics are used to reflect the effects of dealership acquisitions and divestitures as if they occurred on the first day of the last twelve-month periods, providing a more meaningful comparison of performance[21](index=21&type=chunk) [Adjusted Financial Performance](index=16&type=section&id=5.2%20Adjusted%20Financial%20Performance) Reconciliations detail adjustments to GAAP metrics, offering a clearer view of underlying operational performance Q2 2025 GAAP to Non-GAAP Adjusted Metrics | Metric | GAAP (Millions) | Adjustments (Millions) | Non-GAAP Adjusted (Millions) | | :------------------------------------ | :-------------- | :--------------------- | :--------------------------- | | Selling, general and administrative | $475.5 | $5.0 (Insurance recovery) - $2.2 (Professional fees) | $478.2 | | Income from operations | $257.4 | -$5.0 (Insurance recovery) + $2.2 (Professional fees) | $254.6 | | Net income | $152.8 | -$5.9 (Divestitures) - $5.0 (Insurance recovery) + $2.2 (Professional fees) + $2.2 (Tax effect) | $146.3 | | Diluted EPS | $7.76 | -$0.23 (Divestitures) - $0.19 (Insurance recovery) + $0.09 (Professional fees) | $7.43 | | SG&A as a % of gross profit | 63.2% | - | 63.6% | | Income from operations as a % of revenue | 5.9% | - | 5.8% | Q2 2024 GAAP to Non-GAAP Adjusted Metrics | Metric | GAAP (Millions) | Adjustments (Millions) | Non-GAAP Adjusted (Millions) | | :------------------------------------ | :-------------- | :--------------------- | :--------------------------- | | Selling, general and administrative | $476.5 | -$3.1 (Hail damage) | $473.5 | | Income from operations | $100.5 | $3.1 (Hail damage) + $135.4 (Asset impairments) | $238.9 | | Net income | $28.1 | -$3.6 (Divestitures) + $3.1 (Hail damage) + $135.4 (Asset impairments) - $33.8 (Tax effect) | $129.1 | | Diluted EPS | $1.39 | -$0.13 (Divestitures) + $0.11 (Hail damage) + $5.02 (Asset impairments) | $6.40 | | SG&A as a % of gross profit | 65.2% | - | 64.8% | | Income from operations as a % of revenue | 2.4% | - | 5.6% | YTD June 30, 2025 GAAP to Non-GAAP Adjusted Metrics | Metric | GAAP (Millions) | Adjustments (Millions) | Non-GAAP Adjusted (Millions) | | :------------------------------------ | :-------------- | :--------------------- | :--------------------------- | | Net income | $284.9 | -$10.1 (Divestitures) + $14.3 (Asset impairments) - $15.0 (Insurance recovery) + $5.1 (Professional fees) + $1.4 (Tax effect) | $280.6 | | Diluted EPS | $14.46 | -$0.38 (Divestitures) + $0.54 (Asset impairments) - $0.57 (Insurance recovery) + $0.19 (Professional fees) | $14.25 | [Adjusted Leverage and EBITDA](index=16&type=section&id=5.3%20Adjusted%20Leverage%20and%20EBITDA) The company's improved adjusted leverage ratio and positive EBITDA trends reflect effective debt and operational management Adjusted Leverage Ratio (June 30, 2025 vs. March 31, 2025) | Metric | June 30, 2025 (Millions) | March 31, 2025 (Millions) | | :------------------------------------ | :----------------------- | :------------------------ | | Long-term debt | $3,045.0 | $3,128.5 | | Cash and floor plan offset | $(352.4) | $(241.2) | | TCA cash | $34.2 | $37.2 | | Availability under used vehicle floor plan facility | $(323.1) | $(273.7) | | **Adjusted long-term net debt** | **$2,403.7** | **$2,650.7** | | **Transaction adjusted net leverage ratio** | **2.46** | **2.75** | EBITDA Reconciliation (Twelve Months Ended June 30, 2025 vs. March 31, 2025) | Metric | June 30, 2025 (Millions) | March 31, 2025 (Millions) | | :------------------------------------ | :----------------------- | :------------------------ | | Net income | $540.0 | $415.4 | | Depreciation and amortization | $76.3 | $75.6 | | Income tax expense | $180.6 | $139.5 | | Swap and other interest expense | $174.0 | $177.5 | | **EBITDA** | **$971.0** | **$808.0** | | Total non-core items | $11.9 | $155.4 | | **Adjusted EBITDA** | **$982.9** | **$963.4** | | Impact of dealership acquisitions and divestitures | $(6.9) | $(1.1) | | **Transaction adjusted EBITDA** | **$976.0** | **$962.4** | [Adjusted Cash Flow from Operations](index=19&type=section&id=5.4%20Adjusted%20Cash%20Flow%20from%20Operations) Adjusted cash flow from operations was $334.0 million for the first half of 2025 after floor plan adjustments Adjusted Cash Flow from Operations (Six Months Ended June 30, 2025 vs. 2024) | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | | :------------------------------------ | :------------------ | :------------------ | | Cash provided by operating activities | $316.4 | $22.7 | | Change in Floor Plan Notes Payable—Non-Trade, net | $(206.7) | $59.9 | | Change in Floor Plan Notes Payable—Non-Trade associated with floor plan offset, used vehicle borrowing base changes adjusted for acquisition and divestitures | $220.8 | $170.7 | | Change in Floor Plan Notes Payable—Trade associated with floor plan offset, adjusted for acquisition and divestitures | $3.5 | $148.7 | | **Adjusted cash flow provided by operating activities** | **$334.0** | **$402.0** | [Company Overview and Outlook](index=3&type=section&id=6.%20Company%20Overview%20and%20Outlook) [About Asbury Automotive Group](index=3&type=section&id=6.1%20About%20Asbury%20Automotive%20Group) Asbury Automotive Group is a Fortune 500 company and one of the largest U.S. automotive retailers - Asbury Automotive Group, Inc (NYSE: ABG) is a **Fortune 500 company** headquartered in Duluth, GA, and one of the largest automotive retailers in the U.S[13](index=13&type=chunk) - As of June 30, 2025, Asbury operated **146 new vehicle dealerships** (189 franchises representing 31 domestic and foreign brands), Total Care Auto, Powered by Landcar, and 37 collision repair centers[13](index=13&type=chunk) - The company's multi-year plan focuses on increasing revenue and profitability through **organic operations, acquisitive growth, and innovative technologies**[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=6.2%20Forward-Looking%20Statements) The report includes forward-looking statements concerning future operations and strategy, subject to significant risks - Forward-looking statements include projections regarding financial position, liquidity, results of operations, cash flows, leverage, market position, and business strategy[15](index=15&type=chunk)[16](index=16&type=chunk) - Key risks and uncertainties include adverse litigation, integration challenges, supply chain disruptions, market factors, competition, and governmental regulations[16](index=16&type=chunk) - The company undertakes **no obligation to publicly update** any forward-looking statement[17](index=17&type=chunk) [Earnings Call Details](index=3&type=section&id=6.3%20Earnings%20Call%20Details) An earnings call to discuss Q2 results is scheduled for July 29, 2025, accessible via webcast and phone - An earnings conference call will be held on **Tuesday, July 29, 2025, at 10:00 a.m. ET**[11](index=11&type=chunk) - The call will be simulcast live on the internet via https://investors.asburyauto.com, where a replay and supplemental materials will also be available[11](index=11&type=chunk) Earnings Call Dial-in Information | Type | Number | | :----------- | :------------- | | Domestic | (877) 407-2988 | | International | +1 (201) 389-0923 | | Passcode | 13754714 |

Wall Street expects a year-over-year increase in earnings on higher revenues when Asbury Automotive Group (ABG) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on July 29, might help the stock move higher if these key numbers are better than e ...

Core Insights - Auto retail ecosystem companies have shown strong performance year-to-date despite the announcement of auto tariffs and weakening industry fundamentals [1] - JPMorgan analyst Rajat Gupta has made several rating changes for key automotive stocks [1] Cars.com - JPMorgan upgraded Cars.com Inc (CARS) from Neutral to Overweight with a price target of $14 [2] - The company has made significant progress in developing new products that integrate into dealers' workflows, which is expected to help retain dealer customers [3] Sonic Automotive - Sonic Automotive Inc (SAH) was downgraded from Overweight to Underweight, with a price target increase from $65 to $72 [4] - Despite a strong luxury brand mix and exposure to key markets like California and Texas, Sonic has underperformed its peers and trades at a premium [4] Group 1 Automotive - Group 1 Automotive Inc (GPI) was downgraded from Overweight to Neutral, with a price target reduction from $435 to $415 [5] - The company's solid execution has been aided by favorable Texas exposure, but regional concentration increases volatility [5] Asbury Automotive Group - Asbury Automotive Group Inc (ABG) was downgraded from Neutral to Underweight, with a price target cut from $235 to $225 [5] - While the company is positioned for long-term growth through strategic acquisitions and digital investments, risks related to integration, execution, and elevated leverage are concerning [6]

Core Viewpoint - Carvana and Asbury Automotive represent two distinct approaches in the auto retail sector, with Carvana focusing on a fully digital used-car buying experience and Asbury blending traditional dealership strengths with digital initiatives [2][3]. Group 1: Carvana (CVNA) - Carvana is the second-largest used car retailer in the U.S., leveraging a digital platform that allows for a leaner operation compared to traditional retailers [4]. - The company has consistently exceeded earnings expectations for four consecutive quarters, selling over 100,000 vehicles per quarter, with a year-over-year EPS increase and a 46% rise in retail unit sales [5]. - Carvana's adjusted EBITDA reached a record $488 million with an 11.5% margin, leading all auto retailers in adjusted EBITDA margin [6]. - Rising tariffs on new vehicles may drive more consumers to the used car market, where Carvana is well-positioned [7]. - Despite over $5 billion in long-term debt, Carvana's scalable model and growth targets present a compelling narrative for investors [7]. Group 2: Asbury Automotive (ABG) - Asbury combines traditional dealership operations with a growing digital presence, selling both new and used vehicles and generating additional revenue from finance and insurance products [10]. - The Clicklane platform has shown growth, selling over 51,000 units in 2024, a 13% increase year-over-year [11]. - Strategic acquisitions have been a key growth strategy, with the latest acquisition expected to add $3 billion in annualized revenues [12]. - Asbury faces near-term challenges, including deferred revenues impacting earnings and rising SG&A costs, which reached 63.9% of gross profit [14]. - The company's adjusted EBITDA margin is below 6%, significantly lower than Carvana's, and high capital expenditures could limit free cash flow [14]. Group 3: Market Performance and Valuation - Year-to-date, Carvana shares have increased by over 70%, while Asbury's stock has gained 7% [16]. - Carvana's forward sales multiple is 3.67, significantly above its five-year median of 1.95, reflecting high growth expectations [18]. - Asbury's forward sales multiple stands at 0.27, indicating a more conservative valuation [18].

Group 1 - The automotive retail market has shown a mixed performance, with some calls being successful while others have not yet proven effective [1] - Crude Value Insights focuses on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] - The service offers a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] Group 2 - Subscribers can engage in live chat discussions about the oil and gas sector, enhancing community interaction and information sharing [2] - A two-week free trial is available for new subscribers, promoting access to insights in the oil and gas industry [3]