Asbury Automotive Group(US:ABG)2025-04-30 21:11Financial Performance - Consolidated revenue for Q1 2025 decreased to $4.15 billion, down from $4.20 billion in the prior year[105]. - Consolidated gross profit for Q1 2025 decreased to $724.2 million, compared to $750.0 million for the prior year[105]. - Total revenue for the three months ended March 31, 2025 decreased by $52.8 million (1%) to $4,148.5 million compared to the same period in 2024, primarily due to a $121.1 million (9%) decrease in used vehicle revenue[109]. - Net income for the three months ended March 31, 2025 decreased by $15.0 million (10%) to $132.1 million, with diluted net income per share falling to $6.71[111]. - Total gross profit decreased by $25.8 million (3%) to $724.2 million, with a notable $19.8 million (12%) decrease in new vehicle gross profit[109]. - Operating income decreased by $28.4 million (11%) to $234.3 million, primarily due to a decrease in gross profit and an increase in asset impairments[110]. - Selling, general, and administrative expenses decreased by $12.2 million (3%) to $456.4 million, contributing to the overall reduction in operating expenses[110]. - Total other expenses, net decreased by $8.0 million (12%), primarily due to a decrease in floor plan interest expense and other interest expense[111]. - Income tax expense decreased by $5.4 million (11%) due to a $20.4 million (10%) decrease in income before income taxes, with an effective tax rate of 24.7% for the three months ended March 31, 2025[135]. Vehicle Sales and Revenue - The decrease in consolidated revenue was primarily due to a decrease in used vehicle units sold, offset by an increase in new vehicle units sold[105]. - New vehicle revenue increased by $73.8 million (4%) to $2,138.1 million, driven by a 2% increase in new vehicle units sold[113]. - Used vehicle revenue decreased by $121.1 million (9%) to $1,235.8 million for the three months ended March 31, 2025, compared to $1,356.9 million in the same period of 2024[116]. - Used vehicle retail revenue fell by $112.5 million (9%) to $1,078.9 million, while wholesale revenue decreased by $8.6 million (5%) to $156.9 million[116]. - Total used vehicle retail unit sales decreased by 10% on an all store basis and by 8% on a same store basis[116]. - The revenue mix for new vehicles increased to 51.5% from 49.1% year-over-year, while used vehicle retail revenue decreased to 26.0% from 28.4%[109]. Gross Profit and Margins - The gross profit margin for new vehicles decreased to 6.7% from 7.9% in the prior year, reflecting a decrease in gross profit per new vehicle sold by $555 (14%) to $3,448[113]. - The gross profit per vehicle sold for both new and used vehicles declined, contributing to the overall decrease in gross profit[105]. - Used vehicle retail gross profit margins decreased from 5.5% to 5.2% for all stores and on a same store basis[117]. - Parts and service gross profit experienced growth, partially offsetting the declines in vehicle gross profit[105]. - Total parts and service gross profit increased by $8.5 million (3%) to $342.7 million, driven by increased customer pay and warranty volume[122]. Acquisitions and Expansion - The company is expected to acquire the Herb Chambers automotive group for approximately $1.34 billion, including $750 million for goodwill[103][104]. - The acquisition includes 33 dealerships, 52 franchises, and three collision centers, anticipated to close in Q2 2025[104]. - The company operates 196 new vehicle franchises across 150 dealership locations, representing 31 brands within 14 states as of March 31, 2025[94]. Economic and Market Conditions - The company’s vehicle sales are influenced by economic conditions, consumer confidence, and availability of desirable vehicles from manufacturers[98]. - The automotive retail industry is facing challenges from macroeconomic factors such as rising interest rates and inflation, which may impact demand[100]. - The seasonally adjusted annual rate (SAAR) for new vehicle sales in the U.S. increased to approximately 16.5 million, up from 15.4 million in the same period last year, indicating higher inventory supply and consumer demand[115]. Cash Flow and Liquidity - Net cash provided by operating activities was $225.0 million for the three months ended March 31, 2025, compared to $177.1 million for the same period in 2024[148]. - Adjusted cash flow provided by operating activities decreased by $21.3 million to $187.4 million for the three months ended March 31, 2025, primarily due to changes in working capital[149]. - For the three months ended March 31, 2025, total available liquidity was $963.7 million, consisting of cash and cash equivalents of $87.4 million, available funds in floor plan offset accounts of $116.7 million, and $485.9 million under the revolving credit facility[136]. Expenses and Impairments - Asset impairment charges recognized during the three months ended March 31, 2025, totaled $14.3 million, compared to no impairment charges in the same period of 2024[130]. - Floor plan interest expense decreased by $2.1 million (9%) to $20.7 million for the three months ended March 31, 2025, primarily due to higher balances in floor plan offset accounts[131]. - Other interest expense decreased by $1.8 million (4%) to $42.3 million, attributed to a $2.1 million decrease in credit facility interest expense due to lower interest rates[132]. Capital Expenditures - Capital expenditures, excluding real estate purchases, were $21.4 million for the three months ended March 31, 2025, down from $25.7 million in the same period of 2024[150]. - The company expects capital expenditures of approximately $260.3 million in 2025 for facility upgrades and technology investments[155].