Financial Data and Key Metrics Changes - The company generated a record revenue of $4.8 billion in Q3 2025, with a gross profit of $803 million and a gross profit margin of 16.7% [7] - Adjusted earnings per share (EPS) was $7.17, with adjusted EBITDA at $261 million [7][16] - Adjusted net income for the quarter was $140 million, excluding various non-cash and one-time expenses [16] Business Line Data and Key Metrics Changes - Same-store revenue for new vehicles increased by 8% year-over-year, with unit sales up by 7% [9] - Used vehicle unit volume decreased by 4% year-over-year, but used retail gross profit per unit (GPU) increased to $1,551 [10] - Parts and service gross profit rose by 7% year-over-year, with a gross profit margin of 58.8% [13] Market Data and Key Metrics Changes - The company experienced strong demand for electric vehicles (EVs), with EV unit sales doubling from Q2 to Q3 [25] - Same-store new vehicle day supply was 58 days at the end of September, indicating a stable inventory level against consumer demand [10] Company Strategy and Development Direction - The company is focused on deleveraging its balance sheet and optimizing its portfolio while being opportunistic with share repurchases [6][20] - The integration of the Chambers Group is expected to enhance operating metrics and contribute positively to gross profits [4][26] - The strategy emphasizes large, transformative acquisitions in desirable markets [6] Management's Comments on Operating Environment and Future Outlook - Management noted that the fourth quarter is traditionally strong for luxury vehicle sales, with expectations for margins to hold up well [25] - There are anticipated headwinds in the used vehicle market due to a softening labor market and vehicle affordability challenges [10] - The company expects to see efficiency gains from the rollout of Tekion, with significant savings projected by early 2027 [60][61] Other Important Information - The company divested four stores in July, generating annualized revenue of $300 million, as part of its disciplined portfolio management [6] - The adjusted SG&A as a percentage of gross profit was 64.2%, with expectations for reduction as the Tekion rollout progresses [17] Q&A Session Summary Question: Impact of Chambers acquisition on new GPUs - Management confirmed that the Chambers acquisition is expected to have a slightly accretive effect on new GPUs in Q4 [26] Question: Changes in TCA outlook and EPS impact - Management explained that the revised TCA outlook reflects changes in the SAR assumption and the impact of acquisitions and divestitures [31][33] Question: Capital allocation priorities - Management indicated a focus on share repurchases and debt reduction, with M&A remaining a consideration depending on market conditions [44] Question: Trends in luxury vehicle sales - Management noted that luxury vehicle sales remain strong, with no material changes in consumer demand observed [51] Question: Strategies for increasing used vehicle volume - Management highlighted the use of digital marketing tools and a focus on service drives to acquire more used vehicles [65]

Financial Data and Key Metrics Changes - The company generated a record revenue of $4.8 billion in Q3 2025, with a gross profit of $803 million and a gross profit margin of 16.7% [7] - Adjusted earnings per share (EPS) was reported at $7.17, with an adjusted EBITDA of $261 million [7][16] - Adjusted net income for the quarter was $140 million, excluding various non-cash and acquisition-related expenses [16] Business Line Data and Key Metrics Changes - Same-store revenue for new vehicles increased by 8% year-over-year, with unit sales up by 7% [9] - The parts and service business saw a same-store gross profit increase of 7%, with customer pay gross profit up by 8% [6][13] - Used vehicle unit volume decreased by 4% year-over-year, but used retail gross profit per unit (GPU) increased to $1,551 [10][11] Market Data and Key Metrics Changes - The company experienced elevated consumer demand for electric vehicles (EVs), with EV unit sales doubling from Q2 to Q3 [25] - Same-store new day supply was reported at 58 days, indicating a slight improvement in inventory management [10] - The company anticipates headwinds in the used vehicle market due to a softening labor market and vehicle affordability challenges [10] Company Strategy and Development Direction - The company is focused on deleveraging its balance sheet and optimizing its portfolio while being opportunistic with share repurchases [6][20] - The integration of the Herb Chambers Group is expected to enhance operating metrics and contribute positively to gross profits [4][26] - The company aims to continue its transition to the Techyon platform, which is expected to improve operational efficiency and reduce costs in the long term [57][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining margins in Q4, particularly in the luxury vehicle segment, despite macroeconomic uncertainties [25] - The company expects to see a recovery in the used vehicle market starting in 2026, with improved inventory levels anticipated in the following years [11][66] - Management acknowledged the challenges posed by the current economic environment but remains confident in the company's ability to generate cash and reduce leverage [20] Other Important Information - The company divested four stores in July, generating annualized revenue of $300 million, as part of its disciplined portfolio management strategy [6] - The adjusted SG&A as a percentage of gross profit was reported at 64.2%, with expectations for potential reductions as the Techyon rollout progresses [17] Q&A Session Summary Question: Insights on new GPUs for Q4 - Management indicated that Q4 is traditionally strong for luxury vehicles, and they expect margins to hold up well despite the lower gross profit from EVs compared to traditional vehicles [25][26] Question: Impact of Chambers acquisition on new GPUs - The acquisition is expected to have a positive effect on new GPUs, as the Herb Chambers Group has historically performed well in generating growth [26] Question: Updates on TCA and EPS projections - Management revised TCA projections due to changes in the SAR estimates, indicating a delay in achieving previous EPS targets [30][32] Question: Capital allocation priorities - Management indicated a focus on share repurchases and debt reduction, with a balanced approach to portfolio management [43] Question: Trends in luxury vehicle performance - Management noted that luxury performance is more brand-specific than region-specific, with expectations for a strong luxury end to the quarter [49] Question: Strategies for increasing used vehicle volume - The company is leveraging digital marketing tools and focusing on service drives to acquire more used vehicles, while balancing volume and profitability [64][66]

Financial Data and Key Metrics Changes - The company generated a record $4.8 billion in revenue for Q3 2025, with a gross profit of $803 million and a gross profit margin of 16.7% [7] - Adjusted earnings per share (EPS) was $7.17, with adjusted EBITDA at $261 million [7][15] - Adjusted net income for the quarter was $140 million, excluding various non-cash impacts [15] - Same-store SG&A as a percentage of gross profit was 64.2%, indicating a focus on cost management [16] Business Line Data and Key Metrics Changes - Same-store revenue for new vehicles increased by 8% year over year, with unit sales up by 7% [9] - Used vehicle unit volume decreased by 4% year over year, but used retail gross profit per unit increased to $1,551 [10] - Parts and service gross profit rose by 7% year over year, with a gross profit margin of 58.8% [12] Market Data and Key Metrics Changes - The company experienced elevated consumer demand for electric vehicles (EVs), with new EV unit sales doubling compared to Q2 [9][23] - Same-store new day supply was 58 days at the end of September, indicating inventory management aligned with consumer demand [10] Company Strategy and Development Direction - The company is focused on deleveraging the balance sheet and optimizing its portfolio while being opportunistic with share repurchases [5][19] - The acquisition of the Herb Chambers Group is expected to enhance operating metrics and contribute positively to gross profits [4][24] - The company aims to continue integrating Techyon to improve operational efficiency and customer experience [4][53] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are macroeconomic challenges, they remain optimistic about maintaining margins and performance in the luxury vehicle segment [23][46] - The company anticipates a recovery in the used vehicle market starting in 2026, with expectations for improved inventory levels [11][61] Other Important Information - The company divested four stores in July, generating annualized revenue of $300 million, as part of its disciplined portfolio management strategy [6] - The rollout of Techyon is ongoing, with expectations for efficiency gains and cost savings once fully implemented [54][56] Q&A Session Summary Question: Impact of Chambers acquisition on new GPUs - Management confirmed that the Chambers acquisition will have a positive effect on new gross profits per vehicle [24] Question: Changes in TCA outlook and EPS impact - Management explained that the revised TCA outlook is primarily due to changes in the SAR assumption and the timing of rollouts [28][30] Question: Capital allocation priorities - Management indicated a focus on share repurchases and debt reduction, with M&A remaining a consideration depending on market conditions [40] Question: Trends in luxury vehicle sales - Management noted that luxury vehicle sales remain strong, with no significant changes in consumer demand observed [46] Question: Marketing strategies for used vehicles - Management highlighted the use of digital platforms and service drives to acquire more used vehicles, while balancing volume and profitability [60][61]

A B G | A s b u r y A u t o m o t i v e Investor Relations Presentation 2025 Third Quarter Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, objectives, beliefs, expectations and assumptions, projections regarding Asbury's financial position, liquidity, results of operations, cas ...

Group 1: Earnings Performance - Asbury Automotive Group reported quarterly earnings of $7.17 per share, exceeding the Zacks Consensus Estimate of $6.8 per share, and up from $6.35 per share a year ago, representing an earnings surprise of +5.44% [1] - The company posted revenues of $4.8 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.37%, compared to year-ago revenues of $4.24 billion [2] Group 2: Stock Performance and Outlook - Asbury Automotive shares have declined approximately 3.6% since the beginning of the year, while the S&P 500 has gained 16.9% [3] - The current consensus EPS estimate for the upcoming quarter is $6.65 on revenues of $4.87 billion, and for the current fiscal year, it is $27.31 on revenues of $18.09 billion [7] Group 3: Industry Context - The Automotive - Retail and Whole Sales industry is currently ranked in the bottom 23% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Record third quarter 2025 net income of $147 million ($7.52 per diluted share), up 16% from $126 million ($6.37 per diluted share) in Q3 2024[2] - Adjusted net income for Q3 2025 was $140 million ($7.17 per diluted share), an increase of 11% from $126 million ($6.35 per diluted share) in Q3 2024[2][5] - Net income for Q3 2025 reached $147.1 million, a 16% increase from $126.3 million in Q3 2024[25] - Diluted EPS for the three months ended September 30, 2025, was $7.52, compared to $6.37 in the same period of 2024, representing a growth of 18.1%[40] - For the nine months ended September 30, 2025, net income was $432.0 million, a decrease of 45.8 million compared to the previous year[41] - Diluted EPS for the same period was $21.99, down from $23.74, reflecting a decrease of 1.75[41] Revenue Growth - Total revenue reached $4.8 billion, representing a growth of 13% year-over-year[5] - Total revenue for Q3 2025 was $4,800.9 million, a 13% increase from $4,236.7 million in Q3 2024[25] - New vehicle revenue increased by 17% to $2,528.9 million in Q3 2025, compared to $2,163.5 million in Q3 2024[25] - Used vehicle retail revenue grew by 7% to $1,226.8 million in Q3 2025, while wholesale revenue surged by 27% to $185.5 million[25] - Total revenue for the three months ended September 30, 2025, was $4,800.9 million, a 13% increase from $4,236.7 million in 2024[31] - New vehicle revenue reached $2,528.9 million, up 17% from $2,163.5 million year-over-year[31] Profitability Metrics - Gross profit for Q3 2025 was $803 million, a 12% increase compared to the previous year[5] - Total gross profit for the company remained stable at 100.0% year-over-year[29] - Total gross profit increased to $802.5 million, a 12% rise compared to $718.0 million in the same period last year[31] - Parts and service gross profit rose by 15% to $389.1 million, compared to $337.1 million in 2024[31] - The company reported a total gross profit margin of 16.7%, slightly down from 16.9% year-over-year[31] Operating Expenses - Operating expenses for the quarter were $527.1 million, a 13% increase from $466.5 million in the same quarter last year[31] - Operating expenses increased by 2% to $453.8 million in Q3 2025, compared to $445.2 million in Q3 2024[33] - Selling, general and administrative (SG&A) expenses for the nine months ended September 30, 2025, were $1,458.9 million, representing 64.0% of gross profit[41] - The company reported a decrease in SG&A as a percentage of gross profit from 64.2% in 2024 to 64.0% in 2025[41] Liquidity and Debt - The company had $687 million in total liquidity as of September 30, 2025[9] - Long-term debt increased to $3,605.3 million as of September 30, 2025, from $3,138.6 million at the end of 2024[26] - Adjusted long-term net debt for September 30, 2025, was $3,467.1 million, compared to $2,403.7 million in 2024[39] - The transaction adjusted net leverage ratio was 3.2x at the end of the quarter[9] - The adjusted leverage ratio as of September 30, 2025, was 3.2, compared to 2.5 in the previous year[39] Share Repurchase and Inventory - Approximately 220,500 shares were repurchased for $50 million during Q3 2025, with $226 million remaining on the share repurchase authorization[11] - Inventory increased to $2,318.9 million as of September 30, 2025, up from $1,978.8 million at the end of 2024[26] - Days supply of new vehicle inventory was 58 days as of September 30, 2025, compared to 72 days in the same period of 2024[27] Vehicle Sales and Market Performance - New vehicle unit volume increased by 13%, with new vehicle revenue rising by 17% and gross profit increasing by 7%[10] - Used vehicle retail sales grew by 25.6% compared to the same period last year[29] - Domestic vehicle sales represented 27% of total sales, a decrease from 29% in the previous year[29] - The used to new vehicle sales ratio decreased to 78.4% from 87.7% year-over-year[31] - The used to new vehicle sales ratio was 79.5% in Q3 2025, down from 88.4% in Q3 2024[33]

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Core Insights - New vehicle sales remained strong in Q3 2025, driven by electric vehicle (EV) sales, but affordability issues and the expiration of EV tax credits may impact future demand [1][4] - The Federal Reserve's rate cuts are expected to gradually lower auto financing costs, providing relief to buyers and retailers [1][5] - Leading players are leveraging digitization, strategic acquisitions, cost management, and shareholder-friendly actions to maintain competitiveness [1][6][7][8] Industry Overview - The auto retail and wholesale industry is crucial for delivering vehicles and parts to consumers, operating through dealership networks and retail chains [3] - Economic conditions significantly influence the industry's performance, with consumer spending on vehicles typically increasing during economic upturns and declining during downturns [3] - The COVID-19 pandemic accelerated the industry's shift towards online tools and e-commerce, a trend expected to continue [3] Key Themes - Vehicle sales are anticipated to soften as EV demand cools and affordability issues persist, with average vehicle prices exceeding $50,000 [4][5] - The Federal Reserve's interest rate cuts may help lower auto loan costs, potentially bringing buyers back into the market [5] - Auto retailers are pursuing strategic acquisitions to expand their market reach and improve operational efficiency [6] Digitization and Customer Experience - Dealers are investing in digital platforms to enhance the buying experience, which is crucial for maintaining competitiveness in a tech-savvy market [7] - The shift towards digitization is expected to broaden customer reach and improve margins [7] Investor-Friendly Actions - Several auto retailers are committed to rewarding shareholders through buybacks and dividend increases, supported by healthy cash flow from acquisitions and cost-efficiency programs [8] Industry Performance - The Zacks Auto Retail & Wholesale industry ranks 18, placing it in the top 7% of around 245 Zacks industries, indicating positive near-term prospects [9][10] - The industry has underperformed the S&P 500 and the broader Auto, Tires, and Truck sector over the past year, returning 8.2% compared to the S&P 500's 14.7% and the sector's 40.8% [12] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 8.5X, significantly lower than the S&P 500's 18.12X and the sector's 22.41X [15] - Historical trading ranges for the industry have been between 4.78X and 10.79X over the past five years [16] Company Highlights - Asbury Automotive is expanding rapidly through acquisitions and digital innovation, with a projected annualized sales increase of around $3 billion from recent deals [19][20] - Sonic Automotive's balanced business model supports steady profitability, with significant growth expected from its EchoPark used car segment [23][24] - Penske Automotive is expanding its global footprint and maintaining a strong balance sheet, with a low debt-to-capital ratio of 14% [27][28][29] - AutoNation is enhancing its digital capabilities and expanding through acquisitions, with a focus on strengthening its market presence [32][33]

Core Insights - LRT Capital Management's "LRT Global Opportunities Strategy" reported a net return of -8.00% for September 2025 and a year-to-date return of -0.17%, indicating a challenging month amid a market surge driven by overvalued mega-cap stocks [1] Company Overview - Asbury Automotive Group, Inc. (NYSE:ABG) is highlighted as a premier operator and strategic consolidator in the U.S. automotive retail sector, managing a diverse portfolio of dealerships [3] - The company offers a comprehensive range of services, including new and used vehicle sales, financing, insurance products, and parts and service operations [3] Performance Metrics - Asbury Automotive Group, Inc. experienced a one-month return of -2.69% and an annual gain of 8.08% over the last 52 weeks, with its stock closing at $247.51 on October 6, 2025, and a market capitalization of $4.866 billion [2]

Core Viewpoint - Asbury Automotive Group (ABG) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is primarily based on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Asbury Automotive reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [4][6]. Impact of Earnings Estimate Revisions - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly due to institutional investors' reliance on these estimates for fair value calculations [5]. - Rising earnings estimates and the subsequent rating upgrade for Asbury Automotive suggest an improvement in the company's underlying business, which should encourage investors to drive the stock price higher [6]. Zacks Rank System - The Zacks Rank stock-rating system categorizes stocks into five groups based on four earnings estimate-related factors, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [8]. - The upgrade of Asbury Automotive to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate Revisions for Asbury Automotive - For the fiscal year ending December 2025, Asbury Automotive is expected to earn $27.39 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.2% over the past three months [9].