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Why Is Asbury Automotive (ABG) Down 15.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Asbury Automotive Group (ABG - Free Report) . Shares have lost about 15.5% 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 latest 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 Q2 Earnings Top Expectations
Asbury reported second-quarter 2026 adjusted earnings of $6.82 per share, which declined 8.2% year over year but exceeded the Zacks Consensus Estimate of $6.30 by 8.25%. The bottom-line beat reflected stronger used-vehicle profitability despite weaker new-vehicle margins. Revenues of $4.38 billion rose 0.3% from the prior-year quarter but missed the consensus mark of $4.46 billion by 1.78%.
Revenue Mix
New-vehicle revenues increased 1% year over year to $2.33 billion, while used retail revenues declined 3% to $1.09 billion. Wholesale used-vehicle revenues fell 9% to $141.9 million, leaving total used-vehicle revenues down 4% at $1.24 billion.
Parts and service revenues advanced 6% to $634.6 million, while finance and insurance revenues edged up 1% to $183.8 million. The revenue mix shifted modestly toward parts and service, which represented 14.5% of total revenues compared with 13.8% a year earlier.
Vehicle Economics
New-vehicle unit sales were nearly flat at 44,245 units. Luxury and import sales increased 6% and 5%, respectively, but domestic unit sales declined 15%. The average new-vehicle selling price rose 2% to $52,666. Despite the pricing gain, new-vehicle gross profit fell 14% to $138.2 million as gross profit per unit declined 13% to $3,124.
Used retail unit sales decreased 9% to 33,098, while the average selling price increased 6% to $33,054. Used retail gross profit rose 6% to $66.2 million, supported by the 16% improvement in gross profit per unit. Wholesale gross profit dropped 54% to $3.1 million.
Parts and service gross profit increased 5% to $374.2 million, making it the company’s largest gross profit contributor. Finance and insurance gross profit rose 2% to $171.4 million, with gross profit per vehicle retailed increasing 6% to $2,216.
Total gross profit was $753.1 million, essentially flat year over year, while gross margin remained at 17.2%.
Same-Store Operations Remain Soft
Same-store revenues declined 7% to $3.76 billion, while same-store gross profit decreased 7% to $643.2 million.
New-vehicle unit sales fell 6% to 38,908, and used retail unit sales declined 14% to 28,821.
Same-store new-vehicle gross profit per unit dropped 18% to $2,896. In contrast, used retail gross profit per unit increased 10% to $1,927, and finance and insurance gross profit per vehicle retailed rose 5% to $2,214. Same-store parts and service gross profit declined 1% to $322.8 million.
Other Tidbits
Selling, general and administrative expenses rose 7% to $506.4 million. Adjusted SG&A increased 4% to $496.7 million and represented 66% of gross profit, compared with 63.6% in the year-ago quarter.
Income from operations declined 15% to $219.5 million. Adjusted operating margin contracted to 5.3% from 5.8%, while adjusted EBITDA decreased to $234.8 million from $255.8 million. The results reflected higher expenses and weaker new-vehicle economics.
The company generated $305.2 million of adjusted operating cash flow during the first half of 2026 and reported adjusted free cash flow of $188 million. It ended June with $966 million of liquidity and a transaction-adjusted net leverage ratio of 3.4 times.
ABG repurchased about 668,000 shares for $131 million during the quarter. Year to date, it bought back roughly 1.35 million shares for $278 million, leaving approximately $322 million under its authorization.
Asbury Advances Its Tekion Rollout
Asbury had converted 70% of its stores to the Tekion dealership management system as of July 28 and expects to complete the rollout in fall. Management noted stronger productivity, customer-pay performance, technician efficiency and sales effectiveness in markets that had used the platform for at least five months.
In June, the Koons, Georgia and Florida stores increased average units per salesperson by 12% and dollars per technician by 10%. Management expects the platform to support better operating efficiency and is targeting same-store adjusted SG&A as a percentage of gross profit in the low-60% range by the end of 2027.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 5.13% due to these changes.
VGM Scores
Currently, Asbury Automotive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Asbury Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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Why Is Asbury Automotive (ABG) Down 15.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Asbury Automotive Group (ABG - Free Report) . Shares have lost about 15.5% 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 latest 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 Q2 Earnings Top Expectations
Asbury reported second-quarter 2026 adjusted earnings of $6.82 per share, which declined 8.2% year over year but exceeded the Zacks Consensus Estimate of $6.30 by 8.25%. The bottom-line beat reflected stronger used-vehicle profitability despite weaker new-vehicle margins. Revenues of $4.38 billion rose 0.3% from the prior-year quarter but missed the consensus mark of $4.46 billion by 1.78%.
Revenue Mix
New-vehicle revenues increased 1% year over year to $2.33 billion, while used retail revenues declined 3% to $1.09 billion. Wholesale used-vehicle revenues fell 9% to $141.9 million, leaving total used-vehicle revenues down 4% at $1.24 billion.
Parts and service revenues advanced 6% to $634.6 million, while finance and insurance revenues edged up 1% to $183.8 million. The revenue mix shifted modestly toward parts and service, which represented 14.5% of total revenues compared with 13.8% a year earlier.
Vehicle Economics
New-vehicle unit sales were nearly flat at 44,245 units. Luxury and import sales increased 6% and 5%, respectively, but domestic unit sales declined 15%. The average new-vehicle selling price rose 2% to $52,666. Despite the pricing gain, new-vehicle gross profit fell 14% to $138.2 million as gross profit per unit declined 13% to $3,124.
Used retail unit sales decreased 9% to 33,098, while the average selling price increased 6% to $33,054. Used retail gross profit rose 6% to $66.2 million, supported by the 16% improvement in gross profit per unit. Wholesale gross profit dropped 54% to $3.1 million.
Parts and service gross profit increased 5% to $374.2 million, making it the company’s largest gross profit contributor. Finance and insurance gross profit rose 2% to $171.4 million, with gross profit per vehicle retailed increasing 6% to $2,216.
Total gross profit was $753.1 million, essentially flat year over year, while gross margin remained at 17.2%.
Same-Store Operations Remain Soft
Same-store revenues declined 7% to $3.76 billion, while same-store gross profit decreased 7% to $643.2 million.
New-vehicle unit sales fell 6% to 38,908, and used retail unit sales declined 14% to 28,821.
Same-store new-vehicle gross profit per unit dropped 18% to $2,896. In contrast, used retail gross profit per unit increased 10% to $1,927, and finance and insurance gross profit per vehicle retailed rose 5% to $2,214. Same-store parts and service gross profit declined 1% to $322.8 million.
Other Tidbits
Selling, general and administrative expenses rose 7% to $506.4 million. Adjusted SG&A increased 4% to $496.7 million and represented 66% of gross profit, compared with 63.6% in the year-ago quarter.
Income from operations declined 15% to $219.5 million. Adjusted operating margin contracted to 5.3% from 5.8%, while adjusted EBITDA decreased to $234.8 million from $255.8 million. The results reflected higher expenses and weaker new-vehicle economics.
The company generated $305.2 million of adjusted operating cash flow during the first half of 2026 and reported adjusted free cash flow of $188 million. It ended June with $966 million of liquidity and a transaction-adjusted net leverage ratio of 3.4 times.
ABG repurchased about 668,000 shares for $131 million during the quarter. Year to date, it bought back roughly 1.35 million shares for $278 million, leaving approximately $322 million under its authorization.
Asbury Advances Its Tekion Rollout
Asbury had converted 70% of its stores to the Tekion dealership management system as of July 28 and expects to complete the rollout in fall. Management noted stronger productivity, customer-pay performance, technician efficiency and sales effectiveness in markets that had used the platform for at least five months.
In June, the Koons, Georgia and Florida stores increased average units per salesperson by 12% and dollars per technician by 10%. Management expects the platform to support better operating efficiency and is targeting same-store adjusted SG&A as a percentage of gross profit in the low-60% range by the end of 2027.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 5.13% due to these changes.
VGM Scores
Currently, Asbury Automotive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Asbury Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.