On August 2, 2024, Asbury Automotive Group Inc (ABG, Financial) released its 8-K filing for the second quarter of 2024. The company reported a record second-quarter revenue of $4.2 billion, a 13% increase from the same period last year. However, net income saw a significant decline, impacted by a cyber incident involving CDK Global.
Company Overview
Asbury Automotive Group Inc (ABG, Financial) is a regional collection of automobile dealerships that went public in March 2002. The company operates 157 new-vehicle stores and 37 collision centers, with over 70% of new-vehicle revenue coming from luxury and import brands. Asbury also offers third-party financing and insurance products and its own F&I products via Total Care Auto. The company operates in 15 states, including Texas, the West, the Mid-Atlantic, and the Southeast. Asbury generated $14.8 billion in revenue in 2023 and is based in the Atlanta area. The firm targets at least $30 billion in revenue between 2025 and 2030.
Performance and Challenges
Asbury Automotive Group Inc (ABG, Financial) reported a net income of $28 million ($1.39 per diluted share) for Q2 2024, a decrease of 86% from $196 million ($9.34 per diluted share) in Q2 2023. Adjusted net income, a non-GAAP measure, decreased 31% year-over-year to $129 million ($6.40 per diluted share) compared to $188 million ($8.95 per diluted share) in Q2 2023. The company's performance was significantly impacted by a cyber incident involving CDK Global, which disrupted sales, service, inventory, customer relationship management, and accounting functions.
"I am proud of our team members rising up to meet an unprecedented challenge for our business and our industry," said David Hult, Asbury’s President and Chief Executive Officer. "Our results were impacted by the CDK cyber incident, both from lost business and one-time expenses related to the outage and recovery of the systems that service most of our stores."
Financial Achievements
Despite the challenges, Asbury Automotive Group Inc (ABG, Financial) achieved record second-quarter parts & service revenue of $581 million and a gross profit of $340 million. The company also repurchased approximately 193,000 shares for $43 million in Q2 2024 and approximately 592,000 shares for $130 million year-to-date through August 1, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Total Revenue | $4.2 billion | $3.7 billion | 13% |
| Gross Profit | $731 million | $713 million | 2% |
| Net Income | $28 million | $196 million | (86%) |
| Adjusted Net Income | $129 million | $188 million | (31%) |
| EPS (Diluted) | $1.39 | $9.34 | (85%) |
Analysis
The significant decline in net income and EPS can be attributed to the cyber incident, which had a substantial impact on the company's operations. However, the increase in revenue and gross profit indicates strong underlying business fundamentals. The company's focus on luxury and import brands, along with its strategic initiatives, positions it well for future growth despite the current challenges.
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Explore the complete 8-K earnings release (here) from Asbury Automotive Group Inc for further details.
