Asbury Automotive Group(ABG) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Financial Highlights 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] - Reported fourth consecutive quarter of sequential improvement in same store Used Retail gross profit per unit[4] Strategic Business Updates 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][4] - 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] Consolidated Financial Results Income Statement Overview 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] Balance Sheet and Liquidity 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] Detailed Operating Performance Q2 2025 operating performance showed growth in new vehicle and parts & service, with mixed results in used vehicles Revenue and Gross Profit by Category 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 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 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 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 Same Store Revenue and Gross Profit 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 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 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 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 Dealerships and Total Care Auto (TCA) Performance 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 Non-GAAP Financial Disclosure Principles 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] - 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] - 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] Adjusted Financial Performance 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 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 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 About Asbury Automotive Group 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] - 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] - The company's multi-year plan focuses on increasing revenue and profitability through organic operations, acquisitive growth, and innovative technologies[13] Forward-Looking Statements 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][16] - Key risks and uncertainties include adverse litigation, integration challenges, supply chain disruptions, market factors, competition, and governmental regulations[16] - The company undertakes no obligation to publicly update any forward-looking statement[17] Earnings Call Details 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] - 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] Earnings Call Dial-in Information | Type | Number | | :----------- | :------------- | | Domestic | (877) 407-2988 | | International | +1 (201) 389-0923 | | Passcode | 13754714 |