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Asbury Automotive Q1 Earnings Miss Estimates on Softer Adjusted Profit
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Key Takeaways
ABG Q1 adjusted EPS missed estimates, falling 21% YoY as revenues also declined.
Divestiture gains boosted GAAP income, but operating margin fell as expenses rose faster.
Parts and service revenues rose 7%, remaining the largest contributor to gross profit.
Asbury Automotive Group, Inc. (ABG - Free Report) reported first-quarter 2026 adjusted earnings of $5.37 per diluted share, which missed the Zacks Consensus Estimate of $5.68 by 5.42%. The bottom line declined 21.3% year over year. Quarterly revenues of $4.11 billion dipped 0.9% from the year-ago period and came in 6.41% below the Zacks Consensus Estimate of $4.4 billion.
Despite the top-line miss, the quarter featured pockets of resilience, including used retail gross profit per unit of $1,847, up 16% from the prior-year quarter.
Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise
On a GAAP basis, net income rose 42% year over year to $187.8 million, or $9.87 per diluted share, supported by a net gain on dealership divestitures of $125.8 million. Income before income taxes increased 43% to $250.6 million.
Still, underlying profitability remained under pressure. While gross profit rose to $726.9 million and total gross margin improved slightly by 22 basis points to 17.7%, operating margin declined to 4.7% from 5.6% in the prior year, as expenses increased at a faster pace than gross profit.
Asbury’s Vehicle Retail Trends Show Mixed Demand
New-vehicle revenues declined 2% year over year to $2.1 billion, while total new-vehicle units sold fell 5% to 39,282. Within the mix, luxury unit sales increased 9% to 9,449, but domestic units dropped 17% to 9,229. The average selling price (ASP) was $53,480, up 4% year over year.
On the used side, retail used-vehicle revenues decreased 2% to $1.06 billion as retail used units sold fell 6% to 33,202. Retail used-vehicle gross profit increased 9% to $61.3 million, while retail used gross margin improved 58 basis points to 5.8%. The average selling price (ASP) was $31,913, up 5% year over year.
Revenues from the used vehicle wholesale business declined 6% to $146.8 million. Gross profit from the unit declined 40% to $5 million.
Finance and insurance (F&I) revenues, net, slipped 4% to $179 million, but F&I profit per vehicle retailed held firm at $2,302, up 2% year over year. On a same-store basis, F&I PVR was $2,307, essentially flat versus the prior-year quarter.
ABG’s Parts and Service Business Remains a Key Anchor
Parts and service revenues grew 7% year over year to $626.8 million, supported by higher customer pay and a steady service backdrop. Gross profit from parts and service rose 7% to $365.1 million.
However, margins remained essentially unchanged, with parts and service gross margin holding steady at 58.3%. This stability was significant, given that the segment continued to account for the largest share of total gross profit during the quarter.
At comparable stores, parts and service revenues were $533.6 million and gross profit was $309.3 million. Same-store parts and service gross margin was 58%, reflecting modest compression versus the year-ago period.
Asbury’s Cost Structure Reflects Weather and Systems Work
Selling, general and administrative expense climbed 12% year over year to $510.4 million, pushing SG&A to 70.2% of gross profit from 63% a year ago. Adjusted SG&A was $498.6 million, up 8%, and represented 68.6% of gross profit.
The quarter included $3.7 million of weather-related losses, $6.1 million of Tekion implementation expenses and $1.9 million of duplicative DMS-related expenses. Adjusted earnings also excluded, net of tax, the $94 million net gain on divestitures, which was the largest reconciling item between GAAP and adjusted results.
ABG’s Balance Sheet Supports Capital Deployment
As of March 31, 2026, ABG had total liquidity of $1.2 billion, including $257 million in cash, short-term investments, and floorplan offset accounts, along with $917 million of availability under its used-vehicle floorplan line and revolving credit facility. The transaction-adjusted net leverage ratio stood at 3.2x at quarter-end.
Capital returns remained active, with ABG repurchasing about 678,000 shares for $147 million during the quarter and ending March with roughly $453 million remaining under its share repurchase authorization.
Operationally, more than 50% of stores had been converted to Tekion as of April 28, 2026. The company also divested 10 dealerships and terminated seven franchises during the quarter, representing estimated annualized revenues of $625 million, while generating net proceeds of approximately $210 million from the divestitures.
Autoliv, Inc. (ALV - Free Report) reported first-quarter 2026 results on April 17. It posted adjusted earnings of $2.05 per share, which declined 4.7% year over year but surpassed the Zacks Consensus Estimate of $1.77 by 15.8%. Net sales were $2.75 billion, up 6.8% from the year-ago quarter and above the Zacks Consensus Estimate of $2.63 billion by 4.52%.
Autoliv ended the quarter with cash and cash equivalents of $342 million compared with $322 million a year earlier. Long-term debt was $1.7 billion compared with $1.56 billion in the year- ago period. Shareholder returns continued through dividends. Autoliv paid a cash dividend of 87 cents per share in the quarter, with total dividend payments of $65 million.
Genuine Parts Company (GPC - Free Report) reported its first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share. The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC’s total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
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Asbury Automotive Q1 Earnings Miss Estimates on Softer Adjusted Profit
Key Takeaways
Asbury Automotive Group, Inc. (ABG - Free Report) reported first-quarter 2026 adjusted earnings of $5.37 per diluted share, which missed the Zacks Consensus Estimate of $5.68 by 5.42%. The bottom line declined 21.3% year over year. Quarterly revenues of $4.11 billion dipped 0.9% from the year-ago period and came in 6.41% below the Zacks Consensus Estimate of $4.4 billion.
Despite the top-line miss, the quarter featured pockets of resilience, including used retail gross profit per unit of $1,847, up 16% from the prior-year quarter.
Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise
Asbury Automotive Group, Inc. price-consensus-eps-surprise-chart | Asbury Automotive Group, Inc. Quote
ABG’s GAAP Results Lifted by Divestiture Gains
On a GAAP basis, net income rose 42% year over year to $187.8 million, or $9.87 per diluted share, supported by a net gain on dealership divestitures of $125.8 million. Income before income taxes increased 43% to $250.6 million.
Still, underlying profitability remained under pressure. While gross profit rose to $726.9 million and total gross margin improved slightly by 22 basis points to 17.7%, operating margin declined to 4.7% from 5.6% in the prior year, as expenses increased at a faster pace than gross profit.
Asbury’s Vehicle Retail Trends Show Mixed Demand
New-vehicle revenues declined 2% year over year to $2.1 billion, while total new-vehicle units sold fell 5% to 39,282. Within the mix, luxury unit sales increased 9% to 9,449, but domestic units dropped 17% to 9,229. The average selling price (ASP) was $53,480, up 4% year over year.
On the used side, retail used-vehicle revenues decreased 2% to $1.06 billion as retail used units sold fell 6% to 33,202. Retail used-vehicle gross profit increased 9% to $61.3 million, while retail used gross margin improved 58 basis points to 5.8%. The average selling price (ASP) was $31,913, up 5% year over year.
Revenues from the used vehicle wholesale business declined 6% to $146.8 million. Gross profit from the unit declined 40% to $5 million.
Finance and insurance (F&I) revenues, net, slipped 4% to $179 million, but F&I profit per vehicle retailed held firm at $2,302, up 2% year over year. On a same-store basis, F&I PVR was $2,307, essentially flat versus the prior-year quarter.
ABG’s Parts and Service Business Remains a Key Anchor
Parts and service revenues grew 7% year over year to $626.8 million, supported by higher customer pay and a steady service backdrop. Gross profit from parts and service rose 7% to $365.1 million.
However, margins remained essentially unchanged, with parts and service gross margin holding steady at 58.3%. This stability was significant, given that the segment continued to account for the largest share of total gross profit during the quarter.
At comparable stores, parts and service revenues were $533.6 million and gross profit was $309.3 million. Same-store parts and service gross margin was 58%, reflecting modest compression versus the year-ago period.
Asbury’s Cost Structure Reflects Weather and Systems Work
Selling, general and administrative expense climbed 12% year over year to $510.4 million, pushing SG&A to 70.2% of gross profit from 63% a year ago. Adjusted SG&A was $498.6 million, up 8%, and represented 68.6% of gross profit.
The quarter included $3.7 million of weather-related losses, $6.1 million of Tekion implementation expenses and $1.9 million of duplicative DMS-related expenses. Adjusted earnings also excluded, net of tax, the $94 million net gain on divestitures, which was the largest reconciling item between GAAP and adjusted results.
ABG’s Balance Sheet Supports Capital Deployment
As of March 31, 2026, ABG had total liquidity of $1.2 billion, including $257 million in cash, short-term investments, and floorplan offset accounts, along with $917 million of availability under its used-vehicle floorplan line and revolving credit facility. The transaction-adjusted net leverage ratio stood at 3.2x at quarter-end.
Capital returns remained active, with ABG repurchasing about 678,000 shares for $147 million during the quarter and ending March with roughly $453 million remaining under its share repurchase authorization.
Operationally, more than 50% of stores had been converted to Tekion as of April 28, 2026. The company also divested 10 dealerships and terminated seven franchises during the quarter, representing estimated annualized revenues of $625 million, while generating net proceeds of approximately $210 million from the divestitures.
ABG currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
Autoliv, Inc. (ALV - Free Report) reported first-quarter 2026 results on April 17. It posted adjusted earnings of $2.05 per share, which declined 4.7% year over year but surpassed the Zacks Consensus Estimate of $1.77 by 15.8%. Net sales were $2.75 billion, up 6.8% from the year-ago quarter and above the Zacks Consensus Estimate of $2.63 billion by 4.52%.
Autoliv ended the quarter with cash and cash equivalents of $342 million compared with $322 million a year earlier. Long-term debt was $1.7 billion compared with $1.56 billion in the year- ago period. Shareholder returns continued through dividends. Autoliv paid a cash dividend of 87 cents per share in the quarter, with total dividend payments of $65 million.
Genuine Parts Company (GPC - Free Report) reported its first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share. The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC’s total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.