Asbury Automotive Group Inc (ABG, Financial), one of the largest automotive retail and service companies in the U.S., released its Q3 2023 earnings report on October 24, 2023. The company reported a revenue of $3.7 billion, a decrease of 5% from the same period in 2022. The net income for the quarter was $169 million, a decrease of 17% from Q3 2022.
Financial Highlights
ABG's gross profit for the quarter was $674 million, a decrease of 12% from the previous year. The company's operating margin was 7.2%, and the earnings per share (EPS) was $8.19. The company also reported an adjusted EBITDA of $280 million.
ABG's Clicklane platform, a digital vehicle purchasing platform, achieved record sales of over 11,600 vehicles. The company also announced a definitive agreement to acquire Jim Koons Automotive Companies, the ninth-largest privately-owned dealership group in the U.S., with over $3 billion in annual revenue.
Operational Summary
ABG reported a new vehicle unit volume of 36,846, an increase of 1% from Q3 2022. However, the used vehicle retail unit volume decreased by 17% to 32,117. The company's finance and insurance per vehicle retailed (PVR) decreased by 11% to $2,204.
David Hult, Asbury’s President and Chief Executive Officer, expressed pride in the team's hard work towards the integration of acquisitions and support of strategic growth priorities. He also highlighted the pending acquisition of Koons Automotive, which would bring over $3 billion in revenue and a talented team to ABG.
Future Outlook
Despite the decrease in revenue and net income, ABG remains optimistic about its future growth. The company has renewed and upsized its existing credit facility from $2.55 billion to $2.80 billion, providing it with the financial flexibility to continue its strategic growth initiatives.
ABG's acquisition of Jim Koons Automotive Companies is expected to significantly enhance its revenue and market presence. Furthermore, the record sales from the Clicklane platform demonstrate the company's successful digital transformation and its potential for future growth.
