Core Insights - Asbury Automotive (ABG) reported fourth-quarter 2024 adjusted earnings per share of $7.26, exceeding the Zacks Consensus Estimate of $6.07 and increasing from $7.12 in the previous year [1] - Total revenues for the quarter reached $4.5 billion, an 18% year-over-year increase, surpassing the Zacks Consensus Estimate of $4.13 billion [1] Segment Performance - New vehicle revenues increased by 19% year over year to $2.45 billion, beating the Zacks Consensus Estimate of $2.18 billion, driven by higher units sold and better pricing [3] - Retail units sold in the new vehicle segment totaled 47,255, an 18% increase year over year, exceeding the consensus estimate of 42,938 units [3] - Used vehicle retail revenues rose 14% year over year to $1.1 billion, surpassing the Zacks Consensus Estimate of $957 million [4] - Retail used vehicle units sold totaled 35,328, a 15% increase year over year, outpacing the consensus mark of 33,574 units [4] - Revenues from the used vehicle wholesale business jumped 55% to $160 million, exceeding the consensus estimate of $138 million [5] - Net revenues from the finance and insurance business amounted to $198.5 million, a 16% increase from the previous year, beating the Zacks Consensus Estimate of $189 million [6] - Revenues from the parts and service business rose 15% year over year to $590.4 million but missed the Zacks Consensus Estimate of $599 million [7] Financial Metrics - Gross profit from new vehicles was $172.1 million, up 1% year over year, surpassing the Zacks Consensus Estimate of $145 million [3] - Gross profit from used vehicles was $51.2 million, down 2% year over year, but exceeded the Zacks Consensus Estimate of $49.1 million [4] - Gross profit from the finance and insurance segment rose 13% year over year to $184.6 million, exceeding the Zacks Consensus Estimate of $170 million [6] - Selling, general & administrative expenses as a percentage of gross profit increased to 63.6%, up 208 basis points year over year [8] Share Repurchase and Cash Position - In full-year 2024, ABG repurchased 830,000 shares for $183 million, with $276 million remaining under its share repurchase authorization as of December 31, 2024 [9] - As of December 31, 2024, the company had cash and cash equivalents of $69.4 million, up from $45.7 million as of December 31, 2023 [8] - Long-term debt decreased to $3.14 billion as of December 31, 2024, down from $3.2 billion as of December 31, 2023 [8]

A B G | A s b u r y A u t o m o t i v e Investor Relations Presentation 2024 Fourth Quarter Forward-Looking Statements This press release 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, c ...

Financial Data and Key Metrics Changes - The company generated a record revenue of $4.5 billion in Q4 2024, up 18% year-over-year [16] - Gross profit reached $750 million, an increase of 11%, with a gross profit margin of 16.6% [16] - Adjusted earnings per share (EPS) was $7.26, and adjusted EBITDA was $254 million [29][16] - Same-store adjusted SG&A as a percentage of gross profit was 62%, with an all-store adjusted operating margin of 5.7% [16][30] Business Line Data and Key Metrics Changes - Same-store new vehicle volume increased by 7% year-over-year, with gross profit per new vehicle at $3,661 [10][19] - Used vehicle volume was flat, but gross profit per unit increased for the second consecutive quarter, reaching $1,584 [11][21] - Parts and Service gross profit was up 11% on a same-store basis, with the Customer Pay segment growing by 13% [13][24] Market Data and Key Metrics Changes - The same-store new day supply was 47 days at the end of December, while used DSI was 37 days [20][21] - The company retailed approximately 12,000 sales through Clicklane in Q4, a 6% increase year-over-year [26] Company Strategy and Development Direction - The company is focused on cost discipline, with SG&A costs as a percentage of gross profit falling for the second consecutive quarter [14] - A pilot program with Tekion aims to improve efficiency and guest experience, with early feedback being positive [15][51] - The company anticipates inventory challenges to persist throughout 2025, impacting used vehicle pricing [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, citing a stable market and potential improvements from Stellantis [50][88] - The average age of cars serviced is increasing, indicating a strong demand for parts and service [49][87] - Management noted that January has been mixed due to weather impacts but remains optimistic about parts and service performance [58] Other Important Information - The company expects adjusted SG&A as a percentage of gross profit to be in the mid-60s for 2025 [30] - TCA generated $20 million of pre-tax income in Q4, with expectations for a deferral impact in 2025 [31][33] Q&A Session Summary Question: How much of the new GPU strength is due to seasonality versus market stabilization? - Management indicated that the new GPU strength is influenced by both seasonality and improvements in brand performance, particularly with luxury brands [40][44] Question: Can you elaborate on the efficiency improvements with Tekion? - Management highlighted a significant reduction in plug-on costs and improved onboarding efficiency, leading to better productivity [51][52] Question: What are the expectations for January sales momentum? - Management noted mixed results in January due to weather but observed an increase in parts and service sales compared to the previous year [56][58] Question: Can you unpack the SG&A improvements? - Management attributed the improvements to cost reductions and increased gross profit, with potential for further efficiency gains [64][66] Question: What is driving the higher TCA deferral headwinds for 2025 and 2026? - Management explained that the deferral headwinds are due to a combination of increased expectations for unit growth and the rollout of new platforms [70][72] Question: How does inventory growth impact GPU? - Management acknowledged that higher inventory levels typically lead to lower margins, emphasizing the need for balanced inventory management [81][82] Question: What are the key factors that could lead to variance in 2025 expectations? - Management pointed to strong demand, the average age of vehicles, and potential improvements from Stellantis as key factors [85][88] Question: How is the company preparing for potential tariff impacts? - Management indicated that discussions with OEMs are premature, but they remain optimistic about the overall market dynamics [138] Question: Has consumer sentiment regarding affordability changed post-election? - Management noted a positive sentiment shift post-election, although affordability remains a concern for many consumers [141][143]

Core Insights - Asbury Automotive Group (ABG) reported a revenue of $4.5 billion for the quarter ended December 2024, reflecting an 18.2% increase year-over-year and an 8.96% surprise over the Zacks Consensus Estimate of $4.13 billion [1] - The earnings per share (EPS) for the quarter was $7.26, up from $7.12 in the same quarter last year, with a surprise of 19.60% over the consensus EPS estimate of $6.07 [1] Financial Performance Metrics - Unit sales for new vehicles reached 47,255, exceeding the two-analyst average estimate of 42,938 [4] - Unit sales for used vehicle retail were 35,328, surpassing the two-analyst average estimate of 33,574 [4] - The average selling price for new vehicles was $52 billion, compared to the $50.60 billion average estimate [4] - Same-store unit sales for used vehicles retail were 28,357, above the average estimate of 27,998 [4] - Average gross profit per unit for total new vehicles was $3.64 billion, exceeding the average estimate of $3.45 billion [4] - Average gross profit per unit for used vehicle retail was $1.45 billion, slightly below the average estimate of $1.47 billion [4] Revenue Breakdown - Revenues from new vehicles were $2.46 billion, compared to the four-analyst average estimate of $2.19 billion, representing a year-over-year change of 19.4% [4] - Revenues from used vehicles were $1.26 billion, exceeding the four-analyst average estimate of $1.13 billion, with a year-over-year change of 17.8% [4] - Revenues from parts and service totaled $590.40 million, slightly below the four-analyst average estimate of $598.88 million, with a year-over-year change of 15% [4] - Revenues from finance and insurance net were $198.50 million, surpassing the average estimate of $189.35 million, reflecting a 16% year-over-year change [4] - Revenues from used vehicle retail were $1.10 billion, exceeding the average estimate of $956.82 million, with a year-over-year change of 13.8% [4] - Revenues from used vehicle wholesale were $159.60 million, above the average estimate of $137.84 million, representing a significant year-over-year change of 55.1% [4] Stock Performance - Asbury Automotive shares have returned +12.9% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Asbury Automotive Group reported quarterly earnings of $7.26 per share, exceeding the Zacks Consensus Estimate of $6.07 per share, and showing an increase from $7.12 per share a year ago, resulting in an earnings surprise of 19.60% [1] - The company achieved revenues of $4.5 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.96%, compared to $3.81 billion in the same quarter last year [2] - Asbury Automotive shares have increased approximately 12.9% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $7.07 on revenues of $4.35 billion, and for the current fiscal year, it is $27.01 on revenues of $17.31 billion [7] - The Zacks Industry Rank for Automotive - Retail and Whole Sales is currently in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8] Group 3 - The estimate revisions trend for Asbury Automotive is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] - AutoNation, another company in the same industry, is expected to report quarterly earnings of $4.26 per share, reflecting a year-over-year decline of 15.1% [9]

Financial Performance - Fourth quarter 2024 net income reached $129 million ($6.54 per diluted share), a 132% increase from $56 million ($2.70 per diluted share) in Q4 2023[2] - Full year 2024 net income was $430 million ($21.50 per diluted share), a 25% decrease compared to $603 million ($28.74 per diluted share) in the prior year[10] - Total adjusted EBITDA for the full year 2024 was $982 million, a 13% decrease from the prior year[13] - Net income for Q4 2024 was $128.8 million, a 132% increase from $55.5 million in Q4 2023[33] - Basic earnings per share increased by 142% to $6.58 in Q4 2024, compared to $2.72 in Q4 2023[33] - For the year ended December 31, 2024, net income was $430.3 million, a decrease of 37.6% compared to $683.6 million in 2023[48] - Diluted EPS for 2024 was $21.50, down from $32.60 in 2023, reflecting a decrease of 34.1%[48] Revenue Growth - Total revenue for Q4 2024 was an all-time record of $4.5 billion, representing an 18% growth year-over-year[5] - Total revenue for Q4 2024 was $4,504.5 million, an 18% increase from $3,811.7 million in Q4 2023[41] - New vehicle revenue increased by 19% to $2,457.1 million in Q4 2024, compared to $2,058.5 million in Q4 2023[41] - Used vehicle retail revenue rose by 14% to $1,098.9 million in Q4 2024, up from $965.8 million in Q4 2023[33] - Total consolidated revenue for the twelve months ended December 31, 2024, was $17,188.6 million, an increase from $14,802.7 million in the previous year, representing a growth of 15.9%[45] Profitability Metrics - Parts & Service gross profit for Q4 2024 was $340 million, a 19% increase, with same store Parts & Service gross profit growth of 11%[5] - Gross profit for Q4 2024 was $749.9 million, an 11% increase from $673.0 million in Q4 2023[33] - Overall gross profit for the company was maintained at 100% year-over-year[39] - The total gross profit margin decreased to 16.6% in Q4 2024 from 17.7% in Q4 2023, a decline of 101 basis points[41] - Segment operating income for the twelve months ended December 31, 2024, was $889.5 million, compared to $1,025.0 million in the previous year, reflecting a decrease of 13.2%[45] Expenses and Cost Management - Adjusted SG&A as a percentage of gross profit was 62.0%, showing improvement for two consecutive quarters[5] - Selling, general and administrative (SG&A) expenses for the three months ended December 31, 2024, were $476.9 million, compared to $410.5 million in the same period last year, an increase of 16.1%[47] - Selling, general and administrative (SG&A) expenses for 2024 totaled $1,888.5 million, representing 64.0% of gross profit, compared to 58.7% in 2023[48] Liquidity and Capital Management - As of December 31, 2024, the company had total liquidity of $828 million, including cash and availability under credit lines[14] - The company repurchased approximately 830,000 shares for $183 million in 2024, with $276 million remaining on its share repurchase authorization[15] - The adjusted long-term net debt as of December 31, 2024, was $2,796.9 million, a decrease from $2,870.6 million in the previous year[46] Vehicle Sales and Inventory - New vehicle unit volume increased by 18% in 2024, with new vehicle revenue increasing by 19%[11] - Days supply of new vehicle inventory decreased to 49 days as of December 31, 2024, down from 63 days as of September 30, 2024[36] - Used vehicle retail sales grew by 24.4%, while wholesale sales increased by 3.5%[39] - The used to new vehicle sales ratio decreased to 70.4% from 76.4% in the previous year[43] Market Trends - Total imports accounted for 40% of new vehicle sales, with domestic sales at 28%[39] - Luxury vehicle revenue growth: Lexus 10%, Mercedes 8%, BMW 3%, Land Rover 2%[39] - Total revenue from luxury brands reached 32% of overall sales, up from 34%[39]

Company Overview - Asbury Automotive Group (ABG) is expected to report a year-over-year decline in earnings, with a projected EPS of $6.04, reflecting a decrease of 15.2% compared to the previous year [3] - Revenue for the upcoming quarter is anticipated to be $4.13 billion, which represents an increase of 8.5% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 0.28% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4] - The Most Accurate Estimate for Asbury Automotive is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +1.49%, suggesting a likelihood of beating the consensus EPS estimate [10][11] Earnings Surprise History - In the last reported quarter, Asbury Automotive was expected to post earnings of $6.65 per share but only achieved $6.35, resulting in a surprise of -4.51% [12] - The company has not surpassed consensus EPS estimates in any of the last four quarters [13] Industry Context - Group 1 Automotive (GPI), a peer in the automotive retail and wholesale industry, is expected to report earnings of $9.17 per share, reflecting a year-over-year decline of 3.5%, with revenues projected at $5.2 billion, up 16.1% from the previous year [17] - Group 1 Automotive's consensus EPS estimate has been revised down by 0.3% over the last 30 days, and it currently has an Earnings ESP of -1.05%, indicating uncertainty in beating the consensus EPS estimate [18]

Core Viewpoint - Asbury Automotive Group, Inc. (NYSE: ABG) is set to report its full-year results on January 30, before market opening, prompting analysis of expected performance [1]. Financial Expectations - Analysts are preparing for the upcoming earnings report, focusing on key financial metrics and trends that may influence investor sentiment and stock performance [1].

Group 1 - Black Bear Value Partners is an alternative asset management firm focused on a long-term, fundamental, and value-oriented investment approach [1] - The firm is managed by Adam Schwartz, who has 20 years of buy-side investment experience across various themes including equities, structured products, corporate credit, and capital structure arbitrage [1]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Asbury Automotive Group (ABG) and Group 1 Automotive (GPI) as strong value stocks based on their financial metrics and rankings [2][8]. Company Analysis: Asbury Automotive Group (ABG) - ABG has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [3]. - The company's price-to-book (P/B) ratio is 1.39, which is lower than the industry average of 2.29, suggesting it may be undervalued [4]. - ABG's P/CF ratio stands at 9.88, which is attractive compared to the industry's average of 10.07, further indicating potential undervaluation [5]. - Over the past year, ABG's P/B has fluctuated between 1.26 and 1.63, with a median of 1.38 [4]. - The P/CF ratio has ranged from 5.88 to 11.08, with a median of 8.71 [5]. Company Analysis: Group 1 Automotive (GPI) - GPI also holds a Zacks Rank of 2 (Buy) and has a Value score of A, making it another attractive option for value investors [6]. - The Forward P/E ratio for GPI is 10.40, while the PEG ratio is 2.05, compared to industry averages of 8.27 and 1.38 respectively [6]. - GPI's price-to-earnings (P/E) ratio has varied from 6.51 to 10.99, with a median of 7.99 over the past year [7]. - The P/B ratio for GPI is 1.88, which is also below the industry average of 2.29, indicating potential undervaluation [7]. Conclusion - Both Asbury Automotive Group and Group 1 Automotive are highlighted as likely undervalued stocks based on their financial metrics and earnings outlook, making them appealing options for value investors [8].