It has been about a month since the last earnings report for Asbury Automotive Group (ABG Quick QuoteABG - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Asbury Automotive due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Asbury Automotive Group, Inc. before we dive into how investors and analysts have reacted as of late.

Asbury Q1 Earnings Miss Expectations

Asbury 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.

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a flat trend in estimates revision.

VGM Scores

Currently, Asbury Automotive has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Asbury Automotive has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.