In This Article:
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Revenue: $4.5 billion, up 18% year-over-year.
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Gross Profit: $750 million, up 11%.
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Gross Profit Margin: 16.6%.
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Adjusted Earnings Per Share (EPS): $7.26.
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Adjusted EBITDA: $254 million.
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Same-Store New Vehicle Volume: Up 7% year-over-year.
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Same-Store New Vehicle Gross Profit Per Vehicle: $3,661.
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Used Retail Gross Profit Per Unit: $1,584.
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F&I Per Vehicle Retail: $2,238.
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Same-Store Parts and Service Gross Profit: Up 11%.
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SG&A as a Percentage of Gross Profit: 63% on an adjusted all-store basis.
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Adjusted Operating Margin: 6% same-store, 5.7% all-store.
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Adjusted Net Income: $143 million for the quarter.
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Adjusted Operating Cash Flow: $688 million for the full year 2024.
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Free Cash Flow: $526 million for the year.
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Liquidity: $828 million at the end of the quarter.
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Transaction Adjusted Net Leverage Ratio: 2.85 times at the end of December.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Asbury Automotive Group Inc (NYSE:ABG) reported a record $4.5 billion in revenue for the fourth quarter, marking an 18% year-over-year increase.
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The company achieved a gross profit of $750 million, up 11% from the previous year, with a gross profit margin of 16.6%.
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Same-store new vehicle volume increased by 7% year-over-year, with a 12% sequential increase, and gross profit per new vehicle rose by $149 compared to the third quarter of 2024.
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The parts and service business delivered outstanding results, with same-store gross profit up 11% and customer pay segment up 13%.
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The company successfully reduced SG&A costs as a percentage of gross profit to 63% on an adjusted basis, marking the second consecutive quarter of improvement.
Negative Points
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Inventory challenges are expected to persist throughout 2025, particularly affecting the used vehicle market.
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Stellantis brand performance was a significant headwind, with gross per unit down substantially year-over-year.
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The rollout of Total Care Auto (TCA) in Florida and Koons is anticipated to be a headwind to earnings, with a projected noncash deferral hit of $62 million or $2.35 per diluted share in 2025.
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The company faces potential headwinds from rising new vehicle incentives, which could impact used vehicle pricing.
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Weather-related disruptions in January affected sales, with multiple store closures impacting performance.
Q & A Highlights
Q: Can you discuss the factors contributing to the strong new vehicle gross profit per unit (GPU) in Q4, and how much of this is due to market conditions versus seasonality? A: David Hult, CEO, explained that the strong GPU was influenced by a mix of factors, including a balanced days supply and the brand mix. He noted that Asbury's acquisitions have been accretive to GPU, and while some brands like Stellantis faced challenges, others performed well. The company anticipates a more stable market in 2025, with potential tailwinds as Stellantis improves its inventory and pricing strategies.