Asbury Automotive | 10-Q: FY2026 Q1 Revenue Misses Estimate at USD 4.113 B

Revenue: As of FY2026 Q1, the actual value is USD 4.113 B, missing the estimate of USD 4.375 B.

EPS: As of FY2026 Q1, the actual value is USD 9.87, beating the estimate of USD 5.765.

EBIT: As of FY2026 Q1, the actual value is USD 262.9 M.

Consolidated Financial Performance (Three Months Ended March 31, 2026 vs. 2025)

• Total Revenue: Decreased by $35.5 million (-1%) to $4,113.0 million, from $4,148.5 million in the prior year period .

  • New vehicle revenue decreased by $37.3 million (-2%) to $2,100.8 million .
  • Used vehicle revenue decreased by $29.5 million (-2%) to $1,206.3 million .
  • Parts and service revenue increased by $39.2 million (7%) to $626.8 million .
  • Finance and insurance, net revenue decreased by $7.9 million (-4%) to $179.0 million .

• Total Gross Profit: Increased by $2.7 million to $726.9 million, from $724.2 million in the prior year period .

  • Gross profit margin was 17.7%, compared to 17.5% in the prior year .
  • New vehicle gross profit decreased by $14.6 million (-10%) to $128.5 million .
  • Used vehicle gross profit increased by $1.8 million (3%) to $66.3 million .
  • Parts and service gross profit increased by $22.5 million (7%) to $365.1 million .
  • Finance and insurance gross profit decreased by $7.0 million (-4%) to $166.9 million .

• Operating Expenses:

  • Selling, general, and administrative (SG&A) expenses increased by $54.0 million (12%) to $510.4 million, with SG&A as a percentage of gross profit increasing to 70.2% from 63.0% .
  • Depreciation and amortization increased by $3.4 million (18%) to $22.6 million .
  • Asset impairments were $0 million, a decrease from $14.3 million in the prior year .

• Operating Income: Decreased by $40.4 million (-17%) to $193.9 million, compared to $234.3 million in the prior year .

• Other (Income) Expenses:

  • Floor plan interest expense increased by $0.4 million (2%) to $21.0 million .
  • Other interest expense, net, increased by $5.7 million (14%) to $48.0 million .
  • Gain on dealership divestitures, net, increased by $121.6 million to $125.8 million, compared to $4.1 million in the prior year .

• Net Income: Increased by $55.7 million (42%) to $187.8 million, compared to $132.1 million in the prior year .

Segmented Performance (Three Months Ended March 31, 2026 vs. 2025)

• Dealerships Segment:

  • Revenue from external customers was $4,031.8 million, down from $4,064.4 million in the prior year .
  • Segment operating income decreased to $158.2 million from $208.5 million in the prior year .
  • New Vehicle Sales: Units sold decreased by 5% to 39,282 units, while revenue per new vehicle sold increased by $1,955 (4%) to $53,480 . Gross profit per new vehicle sold decreased by $177 (-5%) to $3,271, and new vehicle gross margin decreased to 6.1% from 6.7% .
  • Used Vehicle Sales: Retail units decreased by 6% to 33,202 units, while revenue per used vehicle retailed increased by $1,448 (5%) to $31,913 . Gross profit per used vehicle retailed increased by $261 (16%) to $1,847, and used vehicle retail gross margin increased to 5.8% from 5.2% .
  • Parts and Service: Revenue increased by 7% to $626.8 million, and gross profit increased by 7% to $365.1 million .
  • Finance and Insurance (F&I): F&I per vehicle sold increased by $41 (2%) to $2,302 .

• Total Care Auto, Powered by Asbury (TCA) Segment:

  • Revenue from external customers was $81.2 million, down from $84.1 million in the prior year .
  • Segment operating income was $21.2 million, compared to $21.1 million in the prior year .
  • F&I revenue, after dealership eliminations, decreased by $5.8 million (-19%) to $25.2 million due to the continued rollout of TCA products leading to deferral of F&I revenue .
  • TCA recorded $12.1 million in cost of sales, primarily claims expense .

Cash Flow (Three Months Ended March 31, 2026 vs. 2025)

• Net cash provided by operating activities: Was $223.2 million, slightly down from $225.0 million in the prior year .
• Adjusted cash flow provided by operating activities: Was $166.5 million, a decrease of $20.9 million from $187.4 million in the prior year .
• Net cash provided by investing activities: Was $312.4 million, compared to net cash used of - $0.5 million in the prior year, primarily driven by proceeds from dealership divestitures .
• Net cash used in financing activities: Was - $550.7 million, compared to - $169.3 million in the prior year .

Acquisitions and Divestitures

• On July 21, 2025, [Asbury 汽车集团] acquired The Herb Chambers Companies for approximately $1.76 billion, adding 33 dealerships, 52 franchises, and 3 collision centers, contributing $566.1 million in revenue and $14.7 million in net income for the three months ended March 31, 2026 .
• During the three months ended March 31, 2026, [Asbury 汽车集团] sold 14 franchises (10 dealership locations) for $361.5 million, resulting in a pre-tax gain of $125.8 million . This compares to 2 franchises sold for $33.5 million with a pre-tax gain of $4.1 million in the same period of 2025 .

Capital Allocation and Outlook

• As of March 31, 2026, total available liquidity was $1.15 billion, including $6.4 million in cash and cash equivalents (excluding $18.9 million held by TCA) .
• [Asbury 汽车集团] expects total capital expenditures for 2026 to be approximately $250.0 million, designated for facility upgrades, new constructions, service capacity expansion, and technology investments . The Board of Directors approved an increase of $424.0 million in the common share repurchase authorization, bringing the total to $500.0 million, with $453.0 million remaining as of March 31, 2026 . The estimated effective tax rate for the year ended December 31, 2026, is approximately 25% .