Core Insights - Asbury Automotive Group reported a revenue of $4.15 billion for the quarter ended March 2025, reflecting a decrease of 1.3% year-over-year and falling short of the Zacks Consensus Estimate of $4.4 billion by 5.80% [1] - The company's earnings per share (EPS) was $6.82, down from $7.21 in the same quarter last year, with an EPS surprise of -0.29% against the consensus estimate of $6.84 [1] Financial Performance Metrics - New vehicle unit sales were 41,496, below the average estimate of 43,854 [4] - Used vehicle retail unit sales totaled 35,415, compared to the average estimate of 39,161 [4] - The average selling price for new vehicles was $51.53 billion, exceeding the average estimate of $51.13 billion [4] - Average gross profit per unit for total new vehicles was $3.45 billion, slightly below the average estimate of $3.46 billion [4] - Average gross profit per unit for used vehicle retail was $1.59 billion, surpassing the average estimate of $1.51 billion [4] Revenue Breakdown - Revenues from new vehicles were $2.14 billion, compared to the average estimate of $2.24 billion, representing a year-over-year increase of 3.6% [4] - Revenues from used vehicles were $1.24 billion, below the average estimate of $1.34 billion, showing a year-over-year decline of 8.9% [4] - Parts and service revenues were $587.60 million, compared to the average estimate of $629.90 million, reflecting a year-over-year decrease of 0.5% [4] - Finance and insurance net revenues were $187 million, slightly below the average estimate of $189.02 million, with a year-over-year decline of 1.4% [4] - Retail revenues from used vehicles were $1.08 billion, compared to the average estimate of $1.20 billion, indicating a year-over-year decrease of 9.4% [4] - Wholesale revenues from used vehicles were $156.90 million, slightly below the average estimate of $157.03 million, representing a year-over-year decline of 5.2% [4] Stock Performance - Asbury Automotive shares returned +1.6% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - AutoNation, Inc. reported first-quarter 2025 adjusted earnings of $4.68 per share, a 4% increase year over year, surpassing the Zacks Consensus Estimate of $4.35, driven by strong revenues and profits from retail new and used vehicles [1] - Total revenues for the quarter reached $6.69 billion, exceeding the Zacks Consensus Estimate of $6.57 billion and up from $6.48 billion in the first quarter of 2024 [1] Revenue Breakdown - New vehicle revenues increased by 9% year over year to $3.24 billion, exceeding the estimate of $2.83 billion, with retail units sold totaling 62,387, a 6% increase from the previous year [2] - Average selling price (ASP) for new vehicles rose by 2.9% year over year to $52,064, surpassing the estimate of $47,541 [2] - Gross profit from new vehicles was $175 million, a decline of 10.7% year over year, but above the estimate of $112.5 million [2] Used Vehicle Performance - Retail used-vehicle revenues decreased by 2.3% year over year to $1.79 billion, but exceeded the projection of $1.77 billion due to higher ASP [3] - Used vehicle retail units sold were 68,000, down 1.6% year over year, missing the projection of 69,429 units [3] - ASP for used vehicles was $26,354, down 0.7% year over year, but above the estimate of $25,562 [3] - Gross profit from used vehicles increased by 11% to $113 million, surpassing the estimate of $86.3 million [3] Wholesale and Other Segments - Revenues from wholesale used vehicles fell by 19.7% to $130.3 million, missing the estimate of $165.7 million, while gross profit rose to $11.5 million from $9.7 million, exceeding the estimate of $6.2 million [4] - Finance and insurance business net revenues were $352.5 million, a 5.3% increase year over year, beating the projection of $332.2 million [4] - Parts and service revenues contracted by 0.7% to $1.16 billion, missing the estimate of $1.3 billion, while gross profit rose by 2.1% to $567.7 million, below the estimate of $618 million [5] Segmental Performance - Domestic segment revenues declined by 2.2% year over year to $1.71 billion, exceeding the projection of $1.7 billion, with segment income down 8.2% to $69 million, but above the estimate of $60 million [5] - Import segment revenues increased by 3.4% to $2 billion, surpassing the forecast of $1.95 billion, with income contracting by 2% to $126 million, exceeding the estimate of $113 million [6] - Premium Luxury segment sales rose by 6.7% to $2.57 billion, surpassing the projection of $2.44 billion, with segment income increasing by 4.1% to $178.7 million, exceeding the estimate of $160 million [6] Financial Position - As of March 31, 2025, the company's liquidity stood at $1.6 billion, including $71 million in cash and nearly $1 billion available under its revolving credit facility [7] - Inventory was valued at $3.23 billion, and non-vehicle debt was $3.96 billion [7] - Capital expenditure for the quarter was $75.2 million [7] Share Repurchase Activity - During the first quarter of 2025, AutoNation repurchased 1.4 million shares for $225 million, with a total of 1.5 million shares repurchased for $254 million since the beginning of the year [8] - The company currently has $607 million remaining under its share repurchase program [8]

Core Insights - True value in investments is derived from growth rather than short-term gains, emphasizing a long-term perspective on evaluation [1] - Great businesses provide significant societal value and exhibit durability, deserving growth proportional to their superior products and services [1] - Key characteristics sought in investments include selection, convenience, value, and durability, with a preference for non-cyclical businesses [1] Business Characteristics - The ability to create superior products and services that outperform competitors is crucial [1] - Multiple revenue streams and anti-fragile business structures are preferred, indicating resilience in adverse conditions [1] - Uniqueness is identified as the primary driver of value, with low maintenance costs allowing for high reinvestment potential [1] Management and Strategy - Trust and network effects are important indicators of business durability [1] - Effective management is critical, with a preference for executives who have aligned interests and a strong focus on the business [1] - Successful companies, like Amazon, demonstrate that a customer-centric approach can yield extraordinary returns [1] Investment Timing and Strategy - The optimal time for investment is when negative news is already known, revealing true value [1] - Companies that can maintain stability during layoffs and do not need to chase talent are seen as more valuable [1] - Price movements are influenced by expectations and surprises, with interest in companies that have negative factors priced in but positive aspects underestimated [1]

Company Overview - AutoNation, Inc. (NYSE: AN) is a retailer of both new and used cars in the United States, offering a diverse range of car brands, prominently including Toyota [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1]

Group 1 - The company AutoNation (NYSE: AN) is viewed positively, with a focus on its revenue generation from vehicle sales and related parts [1] - The automotive retail sector is highlighted as a potential area for investment, particularly in the context of market trends and consumer demand [1] Group 2 - Crude Value Insights provides an investment service centered on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers benefit from a comprehensive stock model account and detailed cash flow analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - The total revenue for the first quarter was $6.7 billion, an increase of 3% year over year, and 4% on a same-store basis [16] - Adjusted EPS grew by 4% from the previous year to $4.68, marking the first year-over-year increase in eight quarters [10][20] - Total gross profit, including wholesale, increased by 12% from the first quarter of 2024 [8] Business Line Data and Key Metrics Changes - New vehicle unit sales increased by 7% year over year on a same-store basis, with premium luxury units up 14%, domestic units up 6%, and import units up 2% [7][20] - Used vehicle unit profitability rose by 13% to $16.62, reflecting a focus on margin and inventory management [7][22] - Customer financial services (CFS) profitability per unit increased by 3% year over year, with a finance penetration rate above 70% [24][25] Market Data and Key Metrics Changes - Same-store gross profit for used vehicles grew by 12%, while aftersales gross profit increased by 4% year over year [17][28] - The light vehicle market is projected to see a decline from over 17 million units to between 31 million units for the year, with expectations of cross-shopping mitigating some declines [14] Company Strategy and Development Direction - The company aims to increase store density in existing markets, as evidenced by the acquisition of two stores in Colorado [11][31] - Focus on controlling costs, cash flow, and capital deployment to enhance shareholder returns [15][35] - Continued emphasis on technician workforce development and internal promotions to improve service efficiency [28] Management's Comments on Operating Environment and Future Outlook - Management noted that the impact of tariffs will vary across OEMs and models, with expectations of competitive pricing strategies to maintain market share [53][56] - The company anticipates that the momentum seen in vehicle sales will continue, albeit at a moderating pace [12][34] - Management expressed confidence in the ability to generate cash flow and navigate the evolving market landscape [100] Other Important Information - The company repurchased $225 million of shares at an average price of $165 per share during the quarter, reducing the share count by 4% [10][32] - Adjusted free cash flow for the quarter totaled $237 million, with a cash flow conversion rate of 129% of adjusted net income [29] Q&A Session Summary Question: Impact of AutoNation Finance on PVR - Management acknowledged that the ramp-up of AutoNation Finance had a short-term impact on CFS PVR, estimating it at around $150 for the quarter [40][42] Question: Future Demand and Payback Period - Management indicated that while there may be some pull-forward demand, they do not expect a significant payback in the latter half of the year due to pent-up demand [46][48] Question: OEM Pricing Strategies - Management stated that OEMs will likely absorb some inflation and that the last lever pulled will be net transaction price appreciation [54][96] Question: After Sales Growth Contribution - Management confirmed that aftersales growth was driven by both price and volume increases, with mobile service initiatives contributing at a gross level [104] Question: Used Vehicle Supply and Demand - Management noted strong demand for lower-priced vehicles and emphasized efforts to increase used vehicle inventory [88][90]

Financial Performance - Total revenue increased by 3% year-over-year, from $6486 million to $6690 million[4] - Gross profit increased by 2% year-over-year, from $1198 million to $1220 million[4] - Adjusted net income decreased by 3% year-over-year, from $190 million to $184 million[4] - Diluted adjusted EPS increased by 4% year-over-year, from $449 to $468[4] Sales Performance - New vehicle same store unit growth increased by 7% year-over-year[3,6] - Used vehicle gross profit increased by 12% year-over-year[3,4] - After-sales gross profit reached a record $568 million, with margin expansion exceeding 140 bps[3] AutoNation Finance - AutoNation Finance originations reached $460 million[3,13] - AutoNation Finance portfolio balance increased significantly from $566 million to $1451 million, with AN equity funding increasing from 61% to 74%[15] Capital Allocation - Share repurchases amounted to $225 million, reducing share count by 3%[3] - Capital expenditures were approximately 20% lower than in the first quarter of 2024[25]

Financial Performance - Sonic Automotive's total revenues were $14.22 billion in FY 2024, a decrease of 1% year-over-year [9, 71] - GAAP EPS was $6.18 in FY 2024, compared to $4.97 in FY 2023, representing a 24% increase [9, 71] - Adjusted EBITDA was $560.1 million in FY 2024 [72] - In Q1 2025, total revenues reached $3.65 billion, an 8% increase year-over-year [9, 74] - Q1 2025 diluted earnings per share was $2.04, a 70% increase year-over-year [74] Segment Performance - Franchised Dealerships Segment revenues totaled $11.9 billion in FY 2024 [10] - EchoPark Segment revenues were $2.1 billion in FY 2024 [10] - Powersports Segment revenues reached $157 million in FY 2024 [10] - EchoPark Segment achieved an all-time record quarterly adjusted EBITDA in Q1 2025 [44] Strategic Focus and Outlook - The company anticipates new vehicle GPU in the $2,500 to $3,000 per unit range for FY 2025, depending on tariff impacts [57, 60] - Used vehicle GPU is expected to be in the $1,300 to $1,500 per unit range for FY 2025 [57, 60] - The company expects mid-single-digit percentage growth in fixed operations gross profit for FY 2025 [57, 60] - Sonic Automotive expects F&I GPU in the $2,400 per unit range for FY 2025 [57, 60]

First Quarter 2025 Financial Results Investor Presentation April 24, 2025 Group 1 Automotive 2025 Forward looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements re ...

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [5] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [6][11] Business Segment Data and Key Metrics Changes - Franchised dealership segment revenues reached $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [6] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year [8] - EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% to $64 million [9] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and an adjusted EBITDA loss of $700,000 [10] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [7] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [7] - Parts and service gross profit increased by 7% in the first quarter [8] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [5] - A data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize market volatility disruptions [10] - The company plans to adapt to ongoing changes in the automotive retail environment while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and believes that the automotive industry can handle price adjustments without significant concerns [17][20] - The company is focused on executing its operational playbooks and processes, expecting solid results in the upcoming quarters [18][19] - Management acknowledged the need to balance warranty and customer pay work in service operations to improve revenue mix [50][51] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [11] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [11] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the tariff impacts, but they expect things to stabilize in the next 90 days [17] - The company is not concerned about significant price increases and believes they can navigate through the situation [19] Question: Update on fixed operations hiring - Management reported hiring 345 additional technicians, which has positively impacted fixed operations [23][24] - There is ongoing focus on increasing technician headcount to meet service demand [26] Question: Used vehicle GPU trajectory - Management stated that GPU margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [38][39] Question: Warranty work versus customer pay - Warranty work grew by 40% in the first quarter, while customer pay grew by only 2-3%, indicating a need to adjust the revenue mix [47][50] Question: EchoPark's full-year guidance - Management explained that guidance was conservative due to potential tariff impacts, but they are prepared to adjust as conditions evolve [77][78] Question: SG&A expenses - Management noted that first-quarter SG&A expenses were influenced by one-time compensation costs, but overall expenses are in line with expectations [82][84]