Asbury Automotive Group Inc.’s net income declined 2.5 percent and its revenue was down 5.3 percent during a second quarter that drew from fewer locations than a year earlier — including a Texas location the group sold in May.
However, the magnitude of declines reported Tuesday was smaller than Asbury experienced during the first quarter, when net income fell 24 percent and revenue 8.4 percent compared with the first quarter of 2022.
“Our team did an outstanding job with profitability and discipline on expense control,” Asbury CEO David Hult said in a statement accompanying the release of second-quarter earnings. “We continue to be adaptive in the current market conditions, with our results driven by the strength of our team members, our dealerships and our determination to deliver the best guest-centric experience.”
Last year, Asbury sold four locations in the first quarter and three more in the second quarter to comply with Toyota and Lexus regional store count limits in the wake of its December 2021 purchases of Larry H. Miller Dealerships and Stevinson Automotive. Asbury sold nine more dealerships during the fourth quarter, a transaction Hult said represented “an opportunity” and involved a “fair price” but also was done in anticipation of a large acquisition that failed to materialize.
This year on May 15, the midpoint of the second quarter, Asbury sold David McDavid Acura in Austin, Texas, to Umansky Automotive Group of Memphis, Tenn.
Asbury said Tuesday that it earned $10.2 million from divestitures during the quarter.
During the earnings call, Hult suggested his national dealership group was in acquisition talks that might yield Asbury’s first purchase since the Miller and Stevinson deals.
“We are aggressively in conversations with acquisitions now,” Hult said. “Obviously, we haven’t announced anything because we haven’t been able to land something that meets our criteria in the space and brands that we want. We’re hopeful with our current [dialogue] that something will come together. But, as you know, these things take time, and you just have to play them out.”
On a same-store basis, Asbury’s second-quarter revenue declined 0.9 percent from a year earlier to $3.7 billion, while its gross profit dropped 7.1 percent to $711.8 million.
Highlights from Asbury’s second-quarter earnings report include:
Q2 revenue: $3.7 billion, down 5.3 percent from a year earlier
Q2 net income: $196.4 million, down 2.5 percent from a year earlier
Q2 adjusted net income: $188 million, down 16 percent
Sales: 38,260 new vehicles, down 1.1 percent; 31,623 used vehicles, down 21 percent
Asbury, of Duluth, Ga., ranks No. 5 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 151,179 new vehicles in 2022.
