Asbury Automotive Group (ABG) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $4.1–$4.11 billion, down 1% year-over-year, with net income up 42% to $187.8–$188 million, driven by gains on dealership divestitures and strong parts and service performance.

• Adjusted net income was $102 million, with adjusted EPS of $5.37; EPS was $9.87 per diluted share, reflecting non-recurring gains.

• Over 50% of stores converted to Tekion DMS, with full conversion expected by fall 2026 and efficiency gains anticipated.

• Divested 10–14 dealerships and terminated seven franchises, generating $210–$361.5 million in net proceeds.

• Repurchased 678,000 shares for $147 million; share repurchase authorization increased to $500 million.

Financial highlights

• Gross profit was $727 million, with a gross margin of 17.7%, up 22 basis points year-over-year.

• Adjusted operating margin was 5%; adjusted EBITDA reached $207 million; adjusted net income was $102 million.

• Parts and service revenue reached $627 million, up 7% year-over-year; used vehicle retail gross profit per unit grew 16% to $1,847.

• F&I per vehicle retailed was $2,302–$2,307; total front-end yield per vehicle was $4,806.

• Adjusted cash flow from operations was $166.5 million; liquidity at quarter-end was $1.15–$1.2 billion.

Outlook and guidance

• Full Tekion conversion expected by fall 2026, with cost and efficiency benefits after a four to six month acclimation per store.

• SG&A as a percentage of gross profit expected to trend toward mid-60s as Tekion efficiencies are realized.

• Capital expenditures for 2026 and 2027 anticipated at $250 million per year.

• Management expects foundational investments and TCA product rollout to drive improved performance.

• Target leverage remains under 3.0x, with continued share repurchases and M&A activity.