The following is a summary of the Asbury Automotive Group, Inc. (ABG) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Asbury Automotive Group reported Q3 2024 revenue of $4.2 billion, up 16% year-over-year with a gross profit of $718 million, showing a 7% increment.

• Adjusted earnings per share were reported at $6.35, but adjusting for weather-related impacts and product stop sales, earnings could have been $6.74 to $6.78.

• Share buybacks amounted to nearly 400,000 shares for $89 million during the quarter.

Business Progress:

• The company faced challenges from stop sale orders and hurricanes affecting operations, yet showed resilience in used vehicle profitability and in the parts and service business, which achieved a gross profit margin of 56.8%.

• Adjusted SG&A as a percentage of gross profit saw improvement, indicating effective cost management.

• Asbury Automotive launched a pilot with Tekion in four stores, aiming to enhance efficiencies.

Opportunities:

• Asbury sees opportunities in continuing to grow the parts and service business, which showed a gross profit margin expansion driven by increases in customer pay operations.

• The company plans to expand the implementation of Tekion to optimize operational efficiency and reduce SG&A expenses in the long-term.

Risks:

• The company highlighted ongoing challenges with Stellantis, which contributed to declining new vehicle volumes and gross profits in their locations.

• Asbury expects increased operational disruptions and financial challenges as a consequence of Hurricanes Helene and Milton may be more severe than initially assessed.

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