Asbury Automotive Group (NYSE:ABG) reported second-quarter earnings on Tuesday that surpassed analyst forecasts, driven by strong profitability despite slightly lower-than-expected revenue.
Shares rose 1.75% in pre-market trading following the announcement.
The automotive retailer posted adjusted earnings of $7.43 per diluted share, well above the $6.83 consensus estimate. Revenue came in at $4.4 billion, a bit below the expected $4.45 billion but still up 3% year-over-year.
Gross profit grew 3% to $752 million, with parts and service segments hitting a record gross profit of $355 million. The company also reported its fourth consecutive quarter of sequential improvement in same-store used retail gross profit per unit, which rose 11% compared to Q2 2024.
“I commend our team members for their sustained focus on growth, profitability, and cost discipline,” said David Hult, President and CEO of Asbury.
Operational efficiency improved, with selling, general, and administrative expenses as a percentage of gross profit falling by 198 basis points to 63.2% versus the prior year. New vehicle unit sales increased 4%, while used vehicle retail volume declined 6%.
Asbury finalized its acquisition of The Herb Chambers Automotive Group on July 21, adding roughly $3 billion in annual revenue. The company also sold nine stores between April and July as part of portfolio optimization, generating net proceeds of $250 million to $270 million.
At quarter-end, Asbury held $318 million in cash and floorplan offset accounts, with total liquidity of $1.1 billion. The company’s transaction-adjusted net leverage ratio stood at 2.46x.
Asbury Automotive Group Asbury Automotive Group
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