Rising volume, higher revenues and double-digit gross profit gains in all areas of the business lifted Asbury Automotive Group's net income 18 percent during the fourth quarter to $26.9 million.
"2013 was a great year for Asbury, and we are excited about 2014," CEO Craig Monaghan said today after Asbury reported earnings. "Our stores continue to produce excellent operating results by maximizing new- and used-vehicle sales opportunities, improving F&I penetration, pursuing incremental service opportunities and controlling expenses."
Asbury's fourth-quarter revenues rose 13 percent to $1.37 billion. For the full year, net income jumped 33 percent to $109.1 million, as revenues rose 15 percent to $5.33 billion.
Planning for 16.2 million
Though January sales started slower than many in the industry expected because of weather disruptions, Asbury executives said they expect auto sales to increase at a healthy rate in 2014. The retailer, the seventh-largest dealership group in the country, is planning for industry sales of 16.2 million vehicles this year.
Asbury also reported today that it had acquired a Range Rover dealership in Greenville, S.C., that is expected to add $20 million in annual revenues. Asbury will move the Range Rover business into its existing Jaguar dealership in that market and renovate the facility.
Asbury sold 22,586 new vehicles during the fourth quarter, up 7 percent from a year earlier. For the full year, new-vehicle sales rose 10 percent to 87,959, in a U.S. market that grew 8 percent.
Sales margins stable, down
For the quarter, new-vehicle revenue rose 10 percent, while gross profit in that category rose 11 percent. New-vehicle margins were stable during the fourth quarter but fell slightly for the full year.
Used-vehicle retail revenue rose 24 percent, while used-vehicle retail gross profit increased 16 percent. Used-vehicle retail margin dropped for both the quarter and the year.
But "the substantial increase in volume more than offset the margin decline," Asbury COO Michael Kearney said.
Finance and insurance net revenues rose 21 percent overall, coming in at $1,328 per vehicle on a same-store basis.
Parts-and-service revenue increased 10 percent, while gross profit in that category rose 13 percent.
Total gross profit for the company rose 14 percent to $222.5 million for the quarter.