Asbury Automotive sets record Q3 net income, reports Q4 M&A activity

Asbury Automotive Group Inc. overcame a limited new-vehicle supply to produce record net income for the third quarter, a period also buoyed by Asbury's acquisition of Park Place Dealerships in August 2020.

Asbury ended the quarter with a 12-day supply of new vehicles, the company said Tuesday, compared with a 47-day supply at the end of 2020's third quarter. It had 28 days' worth of used vehicles on hand at the end of September, down from 35 days a year earlier.

Asbury's average selling price and per-vehicle gross profits also soared during the period. New vehicles sold for an average of $45,612, up 17 percent from the prior year. Asbury sold its average used vehicle for $29,671, up 20 percent. New-vehicle gross profit more than doubled on a per-unit basis.

The third quarter also saw Asbury announce it would buy Larry H. Miller Dealerships and finance-and-insurance provider Total Care Auto for $3.2 billion in a deal expected to close by year end. Asbury said it expects to end the year having made acquisitions representing $6.6 billion worth of annual revenue, including $5.7 billion from Larry H. Miller, of Sandy, Utah.

Asbury CEO David Hult on an earnings call said Asbury expected to close Tuesday on Arapahoe Hyundai and Genesis of Arapahoe in Centennial, Colo. The company's remaining deal this year is an undisclosed "very strong group" expected to represent $740 million in revenue, Hult said. He said that group's sales were about half luxury vehicles, adding that it represented mostly import brands but had one domestic-brand store.

• Q3 revenue: $2.41 billion, up 30 percent from a year earlier.

• Q3 net income: $147 million, up 53 percent from a year earlier.

• Q3 adjusted net income: $143.6 million, up 81 percent from a year earlier.

• Q3 sales: Asbury sold 52,524 vehicles, new and used, in the third quarter, up 17 percent from a year earlier. On a same-store basis, Asbury sold 47,989 new and used vehicles, up 8.4 percent.

• Records: Record third-quarter net income; revenue; operating margin; and selling, general and administrative expense as a percentage of gross profit.

• Ranking: Asbury, of Duluth, Ga., ranks No. 6 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 95,165 new vehicles in 2020.