Asbury (ABG) Stock Declines 11.2% Since Q2 Earnings Miss

Core Insights - Asbury Automotive (ABG) shares have dropped 11.2% following the release of second-quarter 2024 results, with adjusted earnings per share at $6.40, a 28.5% decline year over year, missing the Zacks Consensus Estimate of $7.31 due to lower gross profit across all business segments [1] Revenue Performance - Total revenues for the quarter reached $4.25 billion, reflecting a 13% year-over-year increase but falling short of the Zacks Consensus Estimate of $4.36 billion [1] - New vehicle revenues increased by 11% year over year to $2.16 billion, yet missed the consensus estimate of $2.27 billion, attributed to lower units sold despite higher average selling prices [2] - Used vehicle retail revenues rose 15% year over year to $1.17 billion, surpassing the Zacks Consensus Estimate of $1.15 billion, although retail used vehicle units sold fell short of expectations [3] - Finance and insurance business net revenues amounted to $192.4 million, a 16% increase year over year, but missed the consensus estimate of $203 million [4] - Parts and service business revenues grew by 10% year over year to $580.9 million, yet also missed the Zacks Consensus Estimate of $629 million [4] Segment Performance - Retail units sold in the new vehicle segment totaled 42,679, up 12% year over year but below the consensus mark of 45,557 units [2] - Retail used vehicle units sold reached 38,534, a 22% increase year over year, but missed the consensus mark of 39,470 units [3] - Gross profit from new vehicles was $155.1 million, down 16% year over year, missing the consensus estimate of $167 million [2] - Gross profit from used vehicles fell to $56.4 million, down 14% year over year, missing the consensus estimate of $62 million [3] - Gross profit from finance and insurance was $174.7 million, a 6% year-over-year increase, but missed the consensus estimate of $177 million [4] - Parts and service gross profit was $339.9 million, up 16% year over year, but also missed the consensus estimate of $347 million [4] Financial Metrics - Selling, general & administrative expenses as a percentage of gross profit increased to 65.2%, up 792 basis points year over year [5] - Cash and cash equivalents stood at $67.2 million as of June 30, 2024, up from $45.7 million at the end of 2023, while long-term debt rose to $3.60 billion from $3.2 billion [5] - During the quarter, ABG repurchased 193,000 shares for $43 million, with $329 million remaining under its share repurchase authorization as of August 1, 2024 [5]