Asbury Automotive Group (ABG) Q2 2025 earnings summary

Executive summary

• Completed the acquisition of The Herb Chambers Automotive Group, expanding the dealership footprint by 33 dealerships and over 2,000 team members, and increasing the luxury brand mix to 35% in New England.

• Achieved Q2 2025 revenue of $4.4 billion, up 3% year-over-year, and gross profit of $752 million, with net income rising to $153 million and EPS reaching $7.76 per diluted share.

• Operational efficiency, portfolio optimization, and strategic capital allocation remained key focuses, supported by ongoing technology investments such as the Tekion DMS rollout.

• SG&A as a percentage of gross profit improved to 63.2%, aided by lower rent expenses and insurance recoveries.

• Maintained strong liquidity, with $1.12 billion available as of June 30, 2025, and compliance with all debt covenants.

Financial highlights

• Q2 2025 revenue reached $4.4 billion, with gross profit of $752 million and a gross margin of 17.2%.

• Adjusted operating margin was 5.8%; adjusted EBITDA totaled $255.8 million.

• Net income for Q2 2025 was $153 million, up from $28.1 million in Q2 2024; diluted EPS was $7.76.

• Free cash flow for the first half of 2025 was $275 million; adjusted operating cash flow was $334 million.

• Transaction-adjusted net leverage ratio at 2.46x at quarter-end, expected to decrease post-acquisition.

Outlook and guidance

• New vehicle GPUs expected to trend toward $2,500–$3,000, with optimism for the higher end.

• SG&A as a percentage of gross profit anticipated in the mid-60s for 2025, with ongoing cost discipline.

• CapEx projected at $250–$273.1 million for 2025, focused on facility upgrades, new construction, and technology investments.

• Leverage reduction prioritized over the next 12–18 months, targeting below the higher end of the range by mid-to-late 2026.

• TCA rollout and SAR projections introduce uncertainty in timing and magnitude of deferred revenue impacts.