Asbury Automotive Group Inc. continues to enjoy a revenue boost from the 2021 Larry H. Miller Dealerships acquisition, posting record net income of $205 million for the third quarter of 2022.
But Duluth, Ga.-based Asbury also saw declines on a same-store basis, with revenue at dealerships falling 2.8 percent from a year ago to $2.31 billion. Same-store gross profit declined 2.3 percent to $462.7 million.
"This quarter, our team navigated a challenging macro environment, including the impact of Hurricane Ian, to drive strong results," Asbury CEO David Hult said in a statement Thursday. "We are pleased with the momentum of our growth and our ability to maintain our disciplined cost strategy, while strengthening our balance sheet."
Asbury's 24 Florida stores avoided "notable damage" to facilities or inventory from Hurricane Ian, and its employees in the storm's path were safe, Hult said on an earnings call Thursday. However, those locations represent about 35 percent of Asbury's same-store sales, Chief Financial Officer Michael Welch said. Asbury closed locations while paying employees, he added — actions that would affect both Asbury's same-store sales and its expense ratio.
Though Asbury didn't adjust its net income to reflect Hurricane Ian, the company estimates the closures cost it 14 cents per diluted share in third-quarter earnings, Hult said.
Asbury also improved its new-vehicle inventory in the third quarter, holding a 19 days' supply Sept. 30, compared with a 12 days' supply a year earlier and a 13 days' supply at the end of the second quarter. Hult said on the earnings call that Asbury's third-quarter inventory level in part reflects a burst of deliveries held up by Hurricane Ian. Asbury had a 31-day supply of used vehicles at the end of the third quarter, compared with a 28-day supply a year earlier and a 34-day supply for the second quarter.
Asbury Automotive Group bought 61 Larry H. Miller franchised and used-only stores plus finance and insurance products provider Total Care Auto as part of a $3.2 billion December 2021 deal. At the time, Larry H. Miller was ranked No. 8 on the Automotive News list of the top 150 dealership groups based in the U.S., with 61,097 new vehicles retailed in 2020. Asbury was No. 6 on the list at the time, moving to No. 5 on the latest Automotive News list, with retail sales of 109,910 new vehicles in 2021.
Asbury sold seven Toyota and Lexus stores in the first half of the year to comply with automaker store-count limits. It held 148 new-vehicle dealerships consisting of 198 franchises at the end of the third quarter.
Other results from Asbury's third-quarter earnings report Thursday include:
- Revenue: $3.87 billion, up 61 percent from a year earlier.
- Net income: $205 million, up 39 percent from a year earlier.
- Adjusted net income: $205 million, up 43 percent from a year earlier.
- Vehicle sales: 36,497 new vehicles, up 47 percent; 38,874 used vehicles, up 40 percent.
- Same-store vehicle sales: 20,580 new vehicles, down 16 percent; 24,774 used vehicles, down 10 percent.
- Records: Net income, adjusted earnings per share.
