Asbury Automotive Group(US:ABG)2024-10-30 20:17Revenue and Profitability - Consolidated revenue for the nine months ended September 30, 2024, was $12.68 billion, compared to $10.99 billion for the prior year, reflecting a significant increase [122]. - Consolidated gross profit for the nine months ended September 30, 2024, was $2.20 billion, compared to $2.08 billion for the prior year, indicating a slight growth in profitability [122]. - The increase in revenue and gross profit is primarily attributed to the acquisition of the Jim Koons Dealerships, which included 20 new vehicle dealerships and six collision centers [121][124]. - Total revenue for the third quarter of 2024 increased by $570.5 million (16%) to $4,236.7 million compared to $3,666.2 million in the same period of 2023 [128]. - New vehicle revenue rose by $301.6 million (16%) to $2,163.5 million, while used vehicle revenue also increased by $183.0 million (16%) to $1,294.7 million [128]. - Gross profit increased by $44.5 million (7%) to $718.0 million, driven by a $46.0 million (16%) increase in parts and service gross profit [128]. - Total revenue for the nine months ended September 30, 2024, increased by $1,693.1 million (15%) compared to the same period in 2023, driven by a $820.4 million (15%) increase in new vehicle revenue and a $614.1 million (18%) increase in used vehicle revenue [164]. - Gross profit for the nine months ended September 30, 2024, increased by $116.0 million (6%), primarily due to a $145.9 million (17%) increase in parts and service gross profit [164]. Expenses and Income - Income from operations decreased by $32.1 million (12%) to $232.7 million, primarily due to a $74.8 million (19%) increase in selling, general, and administrative expenses [129]. - Total other expenses, net increased by $24.2 million (63%) to $63.0 million, largely due to a $22.3 million increase in floor plan interest expense [130]. - Net income decreased by $42.9 million (25%) to $126.3 million, with net income per diluted share falling to $6.37 from $8.19 [130]. - Selling, general, and administrative (SG&A) expenses increased by $208.3 million (17%) during the nine months ended September 30, 2024, contributing to a decrease in income from operations by $233.0 million (28%) compared to the prior year [165]. - Floor plan interest expense increased by $64.7 million, resulting in total other expenses, net, rising by $89.1 million (86%) for the nine months ended September 30, 2024 [166]. - Net income decreased by $245.5 million (45%) during the nine months ended September 30, 2024, compared to the same period in 2023, with income before income taxes decreasing by $322.1 million (44%) to $403.6 million [166]. Vehicle Sales and Inventory - The company operates 202 new vehicle franchises and 37 collision centers across 14 states as of September 30, 2024 [108]. - New vehicle units sold increased by 5,761 (16%) to 42,607 units compared to 36,846 units in the prior year [132]. - The revenue mix for new vehicles accounted for 51.1% of total revenue, up from 50.8% in 2023 [128]. - New vehicle revenue increased by $301.6 million (16%) for the three months ended September 30, 2024, driven by a $135.2 million (18%) increase in import brands revenue, a $108.5 million (21%) increase in domestic brands revenue, and a $57.9 million (10%) increase in luxury brands revenue [134]. - The company’s ability to sell vehicles has been affected by supply chain disruptions and production slowdowns, impacting inventory levels and availability [114]. - Same store new vehicle revenue decreased by $132.7 million (2%) due to a 3% decrease in new vehicle units sold [169]. Gross Profit Margins - The gross profit margin decreased to 16.9% from 18.4% year-over-year [128]. - The gross profit margin for the nine months ended September 30, 2024, was 17.3%, down from 19.0% in the prior year, reflecting declining new and used vehicle margins [164]. - The gross margin for new vehicles decreased to 7.3%, down 228 basis points from the previous year, attributed to easing inventory constraints [170]. - Used vehicle retail gross profit margins decreased from 6.4% to 5.1% for all stores and from 6.4% to 5.2% on a same store basis compared to the prior year [174]. Parts and Service Revenue - Parts and service revenue increased by $66.6 million (13%) to $593.1 million, driven by an $47.9 million (18%) increase in customer pay revenue and a $15.8 million (22%) increase in warranty revenue [145]. - Total parts and service gross profit rose by $46.0 million (16%) to $337.1 million, with same store gross profit increasing by $10.6 million (4%) to $298.1 million [146]. - Total parts and service revenue increased by $196.1 million (13%) to $1.76 billion, primarily due to a $137.0 million (17%) increase in customer pay revenue [177]. - Total parts and service gross profit increased by $145.9 million (17%) to $1.01 billion, with same store gross profit increasing by $36.8 million (4%) to $889.0 million [179]. Share Repurchase and Capital Expenditures - The company repurchased 826,340 shares for $182.1 million during the nine months ended September 30, 2024, as part of its capital allocation strategy [122]. - Capital expenditures, excluding real estate purchases, were $104.5 million for the nine months ended September 30, 2024, up from $76.5 million in 2023 [208]. - The company expects capital expenditures for 2024 to total approximately $180.0 - $200.0 million for facility upgrades, new constructions, and technology investments [214]. Tax and Liquidity - The effective tax rate for the three months ended September 30, 2024, was 25.6%, compared to 25.1% in the prior year, with an estimated effective tax rate for the year ending December 31, 2024, at 25.4% [159]. - Total available liquidity as of September 30, 2024, was $768.2 million, consisting of cash, floor plan offset accounts, and credit facility availability [193]. - The effective income tax rate for the nine months ended September 30, 2024, was 25.3%, compared to 24.6% for the same period in 2023 [191].