Company Highlights - Asbury's revenue has increased by 138% since 2019, with a Compound Annual Growth Rate (CAGR) of +19%[13] - Adjusted Earnings Per Share (EPS) has increased by 188% since 2019, with a CAGR of +24%[13] - The number of new car dealerships has increased by 73% since 2019[13] - Total revenue reached $173 billion[17], with 320118 new and used vehicles retailed[18] Financial Performance (2Q25) - Total company revenue increased by 3%, with same-store revenue up by 5%[34] - New vehicle revenue increased by 6%, with same-store revenue up by 9%[34] - Used vehicle retail decreased by 3%, with same-store retail down by 1%[34] - Parts & Service revenue increased by 4%, with same-store revenue up by 6%[34] Total Care Auto (TCA) - TCA standalone pre-tax income is estimated to be $75 million in 2025[53] - Consolidated TCA pre-tax income is estimated to be $35 million in 2025[53] Herb Chambers Acquisition - The acquisition is valued at approximately $145 billion[77] - Herb Chambers generated $29 billion in revenue in FY2024[69] - The acquisition is expected to increase Asbury's luxury brand mix from 30% to 35%[81]

Core Insights - Lithia & Driveway reported record second quarter revenue of $9.6 billion, a 4% increase from $9.2 billion in Q2 2024, and a 25% increase in diluted earnings per share (EPS) to $9.87 from $7.87 in the same period last year [1][2][22]. Financial Performance - The second quarter 2025 net income was $258 million, representing a 19.2% increase compared to $217 million in Q2 2024. Adjusted net income for the same period was $268 million, a 24% increase from $217 million in 2024 [3][4]. - For the first half of 2025, revenues increased by 5% to $18.8 billion from $17.8 billion in 2024. Diluted EPS for the first six months was $17.80, a 29% increase from $13.75 in 2024 [5][6]. Corporate Development - In June 2025, Lithia & Driveway expanded its network by acquiring two Mercedes-Benz stores in Tennessee and Mississippi, expected to generate $220 million in annualized revenue. Year-to-date acquisitions are projected to contribute $400 million in expected annualized revenues [7]. Balance Sheet and Cash Flow - The company ended Q2 2025 with approximately $1.3 billion in cash and cash equivalents, marketable securities, and available credit [8]. - Cash flows from operating activities for the first half of 2025 were reported at $331.4 million, compared to $144.0 million in 2024 [27]. Shareholder Returns - The Board of Directors approved a dividend of $0.55 per share for Q2 2025, to be paid on August 22, 2025 [9]. - The company repurchased approximately 387,000 shares at an average price of $306 during Q2 2025, with a total of 791,000 shares repurchased in 2025 at an average price of $316 [10]. Operational Highlights - Total gross profits increased by 4.3% compared to Q2 2024, with aftersales gross profit rising by 11.5% [14]. - Driveway Finance Corporation originated $731 million in loans, with U.S. penetration increasing to 14.8% and net interest margin rising to 4.6% [14].

Report Industry Investment Rating - No information provided on the report industry investment rating Core Viewpoints - Asian IGs tightened by 1 - 3bps this morning, indicating a positive trend in the Asian investment - grade bond market [3] - Li & Fung's tender offer and new issue are beneficial to perp holders, and the company plans to reduce debt and adjust its balance sheet [7][8][9] - Zhongsheng's early redemption of ZHOSHK 3 01/13/26 reflects sufficient liquidity, and ZHOSHK 5.98 01/30/28 remains a good shorter - dated carry play [14] Summary by Related Catalogs Trading Desk Comments - In KR, LGENSO 26 - 35s tightened by 2 - 5bps; in Chinese IGs, BABA 31/MEITUA 30 tightened 1bp, ZHOSHK 26 - 28s were unchanged to 1bp tighter [1] - In financials, CSILTD priced a 3yr floating - rated bond at SOFR + 60; SUMIBK/STANLN Float 28 - 31s tightened 1 - 3bps [1] - In insurance, SHIKON 35 tightened 1bp, NSINTW 34 widened 1bp; ASAMLI Perps/MYLIFE 55s were up 0.1pt [1] - In AT1s, HSBC 6.95/LLOYDS 8/BACR 7.625 Perps were 0.2 - 0.4pt higher; in HK, BNKEA/DAHSIN/NANYAN 31 - 34s tightened 1 - 3bps [1] - In Chinese properties, DALWAN 26 was down 0.7pt; RAODKG 28 - 30s/Perps were 0.2pt lower to 0.3pt higher [1] - Outside properties, EHICAR 26 - 27s were 1.2 - 1.4pts higher; in SE Asia, GLPSP 28/Perps were 0.8 - 1.6pts higher [1] - VEDLN 28 - 33s were up 0.1 - 0.3pt; VLLPM 29 lowered 1.2pts; PTTEPT/PTTTB 42s were 0.6pt lower [1] - In CNH space, CCAMCL priced 3.5yr and 5yr CNH bonds at 2.35% and 2.43% respectively; onshore AAA guaranteed CNH LGFVs tightened 20 - 50bps [2] - BADNHI 6.9 28s/ZBZCHD 6.9 28s were 0.5 - 2.7pts higher; in SOE perps, CHPWCN Perp was up 0.1pt [4] Last Trading Day's Top Movers - Top performers included KAFEDI 6 1/2 06/04/28 with a price of 96.3 and a change of 2.7, GLPSP 4 1/2 PERP with a price of 55.3 and a change of 1.6 [5] - Top underperformers included TSIVMG 1.55 12/17/29 with a price of 70.4 and a change of - 1.2, VLLPM 9 3/8 07/29/29 with a price of 64.5 and a change of - 1.2 [5] Marco News Recap - On Monday, S&P was up 0.02%, Dow was down 0.14%, and Nasdaq was up 0.33%; long - term UST yield was higher, with 2/5/10/30 yield at 3.91%/3.96%/4.42%/4.96% [6] Desk Analyst Comments - Li & Fung launched a tender offer for LIFUNG 5.25 Perp at USD55, with a maximum acceptance amount of USD50mn, funded by a new 3.5NC2 USD bond [7] - The FV of the new LIFUNG 29 is expected to be mid - 8% vs IPT at 9% [7] - The tender offer is seen as a de facto voluntary partial exchange beneficial to perp holders [8] - With new issuance proceeds and cash on hand, Li & Fung plans to redeem bonds, repay loans, and adjust its balance sheet [9] - Zhongsheng announced to make - whole ZHOSHK 3 01/13/26 on 27 Aug'25, reflecting sufficient liquidity [14] - ZHOSHK 5.98 01/30/28 is considered a good shorter - dated carry play, and a buy recommendation is maintained [14] Offshore Asia New Issues - No offshore Asia new issues were priced today; in the pipeline, Chengdu Xisheng Investment Group plans a 3yr issue, China CITIC Bank London Branch plans a 3yr issue of up to USD300mn, and Li & Fung plans a 3.5NC2 issue [18] News and Market Color - 84 credit bonds were issued yesterday onshore with an amount of RMB92bn; month - to - date, 1,881 credit bonds were issued with a total amount of RMB2,024bn, a 15.2% yoy increase [21] - Adani Green Energy 1Q26 total revenue rose 36% yoy to INR38bn (cUSD439.2mn) [21] - Diamond Power won an INR13.5bn (cUSD155.6mn) order from Adani Energy Solutions [21] - China Cinda AMC issued 3.5y CNH3bn bonds at 2.35% and 5yr CNH2.3bn bonds at 2.43% [21] - Lippo Cikarang's 1H25 presales reached 48% of FY25 target [21] - SJM Holdings agreed to buy a property in Zhuhai for RMB724.2mn (cUSD101.1mn) [21]

Core Insights - AutoNation reported strong Q2 FY2025 results with adjusted earnings per share of $5.46, exceeding analyst estimates of $4.70, while revenue reached $7.0 billion, surpassing the forecast of $6.85 billion [1][2] - The company is focusing on diversifying its revenue streams, particularly in After-Sales and Customer Financial Services, to mitigate reliance on new vehicle sales [4][9] - Despite revenue growth, GAAP net income and earnings per share declined due to significant non-cash asset impairment charges [1][8] Financial Performance - Adjusted EPS (Non-GAAP) was $5.46, a 37% increase year-over-year from $3.99 [2] - GAAP EPS fell to $2.26, down 29% from $3.20 in Q2 2024 [2] - Revenue increased by 8% year-over-year, driven by new vehicles, used vehicles, and After-Sales [5] - Gross profit reached $1.28 billion, a 10% increase from the previous year, with a gross margin percentage of 18.3% [2][7] Business Model and Strategy - AutoNation operates a diverse business model, including new and used vehicle sales, parts and service, and finance and insurance products [3] - The company has prioritized After-Sales and Customer Financial Services, which together contributed 75.7% of the gross profit mix [4][9] - Digital retailing initiatives are ongoing, allowing customers to complete more steps of the buying process online [9] Segment Performance - Domestic segment income increased by 83% to $92 million, while Import and Premium Luxury segments saw income increases of 23% to $133 million and 27% to $180 million, respectively [6] - Customer Financial Services revenue rose by 13%, and After-Sales revenue climbed by 12% [5] Operational Efficiency - SG&A expenses as a percentage of adjusted gross profit improved to 66.2% from 67.3% year-over-year [10] - The company completed its first asset-backed securitization for $700 million, enhancing its liquidity position [11] Future Outlook - Management did not provide formal guidance for the next quarter but expressed confidence in cash flow generation and capital deployment [12]

Core Insights - AutoNation reported revenue of $6.97 billion for the quarter ended June 2025, reflecting a year-over-year increase of 7.6% and surpassing the Zacks Consensus Estimate of $6.8 billion by 2.62% [1] - The company's EPS was $5.46, up from $3.99 in the same quarter last year, resulting in an EPS surprise of 16.17% compared to the consensus estimate of $4.70 [1] Financial Performance Metrics - Retail vehicle unit sales totaled 135,583, exceeding the four-analyst average estimate of 130,325 [4] - Revenue per new vehicle retailed was $51,579, slightly below the average estimate of $51,872.62 [4] - Revenue per used vehicle retailed was $26,457, also below the average estimate of $27,368.63 [4] - Gross profit per vehicle retailed in finance and insurance was $2,712, surpassing the average estimate of $2,598.93 [4] - Used vehicle retail sales reached 69,736, exceeding the average estimate of 66,701 [4] - Parts and service revenue was $1.22 billion, above the five-analyst average estimate of $1.19 billion, marking a year-over-year increase of 9.3% [4] - Finance and insurance net revenue was $367.7 million, exceeding the average estimate of $337.81 million and representing a year-over-year increase of 13.5% [4] - Used vehicle revenue was $1.99 billion, surpassing the average estimate of $1.92 billion, with a year-over-year increase of 3.9% [4] - New vehicle revenue was $3.4 billion, slightly above the average estimate of $3.31 billion, reflecting an 8.8% year-over-year increase [4] - Other revenue was reported at $4.3 million, matching the average estimate but showing a year-over-year decline of 24.6% [4] - Retail used vehicle revenue was $1.85 billion, exceeding the average estimate of $1.78 billion, with a year-over-year increase of 5.8% [4] - Wholesale used vehicle revenue was $140 million, below the average estimate of $150.25 million, representing a year-over-year decline of 16.5% [4] Stock Performance - AutoNation's shares returned +0.1% over the past month, compared to the Zacks S&P 500 composite's +4.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Analysts project Carvana (CVNA) will report quarterly earnings of $1.10 per share, a significant increase of 685.7% year over year, with revenues expected to reach $4.57 billion, up 34.1% from the same quarter last year [1]. Earnings Projections - There has been a 2.2% upward revision in the consensus EPS estimate over the last 30 days, indicating analysts' reassessment of their initial forecasts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3]. Revenue Estimates - Analysts estimate 'Sales and operating revenues - Retail vehicle sales, net' to be $3.26 billion, reflecting a year-over-year increase of 35.1% [5]. - 'Sales and operating revenues - Other sales and revenues' is projected at $387.99 million, indicating a 39.1% increase from the previous year [5]. - 'Sales and operating revenues - Wholesale sales and revenues' is expected to reach $880.49 million, a 22.3% year-over-year change [6]. Unit Sales and Profit Metrics - Retail vehicle unit sales are forecasted to be 141,724, compared to 101,440 in the same quarter last year [6]. - The consensus estimate for 'Per retail unit gross profit - Total' is $7,172.34, up from $7,049.00 year-over-year [6]. - 'Per retail unit gross profit - Retail vehicle' is projected at $3,445.28, compared to $3,421.00 in the same quarter last year [7]. - 'Per unit revenue - Retail vehicles' is expected to be $23,183.84, down from $23,768.00 year-over-year [8]. Market Performance - Carvana shares have returned +6.4% over the past month, outperforming the Zacks S&P 500 composite's +4.6% change [10]. - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [10].

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $7 billion, an increase of 8% year-over-year on both total and same-store basis [14] - Adjusted net income rose to $209 million, up 29% from $163 million a year ago [18] - Adjusted EPS was $5.46 for the quarter, an increase of $1.47 or 37% from the previous year [18] Business Line Data and Key Metrics Changes - New vehicle sales increased by 8% year-over-year, with domestic segment sales up 19% [5][19] - Used vehicle gross profit increased by 13% year-over-year, with unit sales up 6% [6][23] - Customer financial services gross profit also rose by 13%, with finance penetration stable at around 75% [8][24] Market Data and Key Metrics Changes - New vehicle unit volumes increased by 7% year-over-year, with hybrid sales up over 40% [19] - Used vehicle retail unit sales improved by 6% year-over-year, driven by growth in both lower and higher-priced vehicles [21] - Average FICO scores on originations improved to 698 from 675 year-over-year, with delinquency rates down to 2.4% [27] Company Strategy and Development Direction - The company is focused on maintaining market share while optimizing tariff efficiency and pricing structures [12] - There is a commitment to explore M&A opportunities to add scale and density in existing markets [35] - The company aims to enhance its mobile service business while ensuring efficient use of technician resources [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, expecting stable margins despite potential fluctuations [56][58] - The company is encouraged by recent legislative provisions that could stimulate vehicle purchases [13] - There is a focus on balancing vehicle pricing and affordability to avoid stifling demand [90] Other Important Information - The company completed its inaugural asset-backed securitization, which was oversubscribed, allowing for increased debt funding levels [28][29] - Adjusted free cash flow for the first half totaled $394 million, representing 100% of adjusted net income [32] - The company received $10 million in insurance recoveries related to the previous year's CDK outage [34] Q&A Session Summary Question: Discussion on M&A opportunities and market flexibility - Management indicated a cautious approach post-tariff announcement but noted an improvement in the M&A pipeline and a commitment to both share repurchases and M&A [46][48] Question: Insights on July sales performance and consumer landscape - Management noted a strong first half and expressed optimism for the second half, despite some fluctuations in sales patterns [54][60] Question: Update on AutoNation USA strategy - Management confirmed that additional openings are planned, focusing on markets with existing density to enhance performance [82][86] Question: Aftersales business performance and pricing - Management highlighted a balance between volume and pricing, with a focus on maintaining competitive pricing while managing costs [75][78] Question: Update on AutoNation Finance and its coexistence with legacy business - Management discussed the growth of AutoNation Finance and its impact on profitability, emphasizing the importance of managing the portfolio effectively [104]

Core Insights - Carvana (CVNA) is expected to report second-quarter 2025 results with earnings estimated at $1.10 per share and revenues at $4.56 billion, reflecting a year-over-year earnings growth of 685.7% and a revenue increase of 33.6% [1][2] Financial Performance - The Zacks Consensus Estimate for Carvana's 2025 revenues is $18.1 billion, indicating a 32.3% year-over-year rise, while the EPS estimate is $5.04, suggesting a 217% increase year-over-year [2] - For Q2 2025, adjusted EBITDA is projected to grow nearly 48% year-over-year to $524.2 million, driven by strong sales and cost-efficiency improvements [6][10] Sales and Market Position - Carvana's retail sales have shown significant momentum, with a 46% year-over-year increase in retail unit sales in Q1 2025, and an expected 33.8% growth in Q2 2025, with approximately 135,750 vehicles anticipated to be sold [4][5] - The company has sold over 100,000 vehicles for four consecutive quarters, maintaining its position as the second-largest used car retailer in the U.S. [4][11] Cost Management and Efficiency - Carvana's turnaround strategy includes cutting expenses through improved technology, leaner staffing, reduced advertising, and better inventory management, which are enhancing efficiency and profitability [5][10] - The adjusted EBITDA margin has reached 11.5%, leading the public auto dealer sector due to effective cost management [10] Valuation and Market Performance - Year-to-date, Carvana's shares have surged 60%, outperforming competitors like CarMax and Sonic Automotive [7] - Carvana trades at a forward 12-month price-to-sales ratio of 3.38, significantly higher than CarMax (0.32) and Sonic Automotive (0.17), reflecting stronger growth expectations [8] Strategic Growth Opportunities - The acquisition of ADESA U.S. has bolstered Carvana's logistics and vehicle processing capabilities, providing room for growth despite holding only about 1% of the market share [11]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $7 billion, an increase of 8% year over year on both total and same store basis [12] - Adjusted net income rose to $209 million, up 29% from $163 million a year ago [15] - Adjusted EPS was $5.46 for the quarter, an increase of $1.47 or 37% from a year ago [15][8] - Same store gross profit increased by 10% year over year to $1.3 billion, with a gross profit margin of 18.3%, up 40 basis points from a year ago [13] Business Line Data and Key Metrics Changes - New vehicle sales increased by 8% year over year, with domestic segment sales up 19% [4][17] - Used vehicle gross profit increased by 13% year over year, with unit sales up 6% [5][21] - Customer financial services gross profit also increased by 13%, with finance penetration stable at around 75% [6][22] - After sales revenue grew by 12% year over year, with gross profit margins expanding by 100 basis points to record levels [28][29] Market Data and Key Metrics Changes - New vehicle unit volumes increased by 7% year over year, with hybrid sales up over 40% and battery electric sales up nearly 20% [17] - Used vehicle retail unit sales improved by 6% year over year, with stable average retail prices [20] - The company ended the quarter with 41,000 new vehicle units in inventory, representing 49 days of supply [18] Company Strategy and Development Direction - The company is focused on growth and efficiency across all business lines, with a strong emphasis on technician recruitment and retention [7][35] - There is a commitment to explore M&A opportunities to add scale and density in existing markets, while also returning capital to shareholders through share repurchases [32][34] - The company aims to leverage its broad portfolio of brands to cushion against potential new tariffs [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, despite some fluctuations in sales patterns due to tariff uncertainties [56][59] - The company expects to maintain market share and is encouraged by provisions in recent federal statutes that could stimulate vehicle purchases [11] - Management noted that the mobile service business, while facing challenges, has the potential to contribute positively to income as it matures [36][39] Other Important Information - The company completed its inaugural asset-backed securitization, which was oversubscribed, allowing for increased debt funding levels [26][27] - Adjusted free cash flow for the first half totaled $394 million, representing 100% of adjusted net income [30] - The company received $10 million in insurance recoveries related to the previous year's CDK outage, with expectations for more recoveries in 2025 [31] Q&A Session Summary Question: What kind of flexibility do you have regarding M&A opportunities? - Management indicated a cautious approach post-tariff announcement but noted an improvement in the M&A pipeline and a commitment to both M&A and share repurchases [45][46] Question: What are your thoughts on the consumer landscape and demand outlook? - Management believes there is still pent-up demand and expects stability in margins, despite potential fluctuations in sales patterns [56][58] Question: Can you provide an update on AutoNation USA and its strategy? - Management stated that growth will be more deliberate, focusing on density in markets to ensure success [82][84] Question: How do you see the competition in the used vehicle market? - Management acknowledged competition but emphasized the large market size and the company's small share, indicating plenty of growth opportunities [95][96] Question: Can you discuss the performance of AutoNation Finance? - Management highlighted that AutoNation Finance is driving growth and has a superior attach rate compared to other lenders, positively influencing overall business performance [101][105]

Core Insights - Sonic Automotive, Inc. (SAH) reported second-quarter 2025 adjusted earnings per share of $2.19, exceeding the Zacks Consensus Estimate of $1.63 and reflecting a 49% increase from the previous year [1] - Total revenues reached $3.66 billion, surpassing the Zacks Consensus Estimate by 0.44% and increasing from $3.45 billion in the same quarter last year [1] Revenue Breakdown - Consolidated revenues from new vehicle sales amounted to $1.7 billion, up 7% year over year; used vehicle sales were $1.18 billion, nearly flat; and wholesale vehicle sales totaled $83.3 million, up 17% [2] - Revenues from parts, service, and collision repair increased by 12% to $495.6 million, while finance, insurance, and other revenues rose 17% year over year to $202.1 million [2] Franchised Dealerships Segment - In the Franchised Dealerships segment, revenues from new vehicle sales were $1.66 billion (up 7% year over year), used vehicle sales were $745 million (up 2%), and wholesale vehicle sales were $57.8 million (up 19%) [3] - Parts, service, and collision repair revenues increased by 12% to $484.9 million, and finance, insurance, and other revenues rose 16% to $144.3 million [3] - Same-store revenues increased by 6% to over $3 billion, with same-store retail units of new and used vehicles totaling 52,451, up 1% from the same quarter of 2024 [3] EchoPark Segment - The EchoPark segment reported quarterly revenues of $508.6 million, down 2% year over year, with used vehicle sales contributing $427.4 million (down 5%), wholesale vehicle sales at $25.4 million (up 16%), and finance, insurance, and other revenues at $55.8 million (up 20%) [4] - The segment sold 16,742 used vehicles and 3,097 wholesale vehicles, reflecting a 1% and 19% increase year over year, respectively [4] Powersports Segment - In the Powersports segment, revenues from new vehicle sales totaled $26.9 million (up 24% year over year), used vehicle sales were $8.3 million (up 57%), while wholesale vehicle sales decreased to $0.3 million (down 67%) [5] - Parts, service, and collision repair revenues rose by 9% to $10.6 million, with finance, insurance, and other revenues at $2 million [5] - Same-store revenues increased by 12% to $42.2 million, with same-store retail units of new and used vehicles totaling 1,962, up 19% year over year [5] Financial Metrics - Selling, general, and administrative expenses decreased by 5% year over year to 68.5% of gross profit [6] - Cash and cash equivalents stood at $110.4 million as of June 30, 2025, up from $44 million as of December 31, 2024; long-term debt decreased to $1.47 billion from $1.51 billion over the same period [6] Dividend Announcement - Sonic Automotive increased its quarterly dividend by 9% to $0.38 per share, payable on October 15, 2025, to shareholders of record as of September 15 [7]