Asbury Automotive Group Inc. increased revenue and net income in the second quarter despite continued margin pressure, the dealership group said Tuesday. Gains in the group's used-vehicle, finance and insurance, and parts and service business lines drove the boost.
Net income climbed 35 percent from a year earlier to $43.2 million, while revenue rose 5.6 percent to $1.72 billion, the company said in a statement.
Net income was adjusted to account for a pretax gain of $700,000 on legal settlements, while net income for the second quarter of 2017 was adjusted for an $800,000 pretax investment income and a real-estate-related charge of $2.9 million, the company said.
Sales: New-vehicle sales rose 3.7 percent to 26,069. Used-vehicle retail sales jumped 7 percent to 21,685.
Same-store sales: New-vehicle sales inched up 0.6 percent to 25,295, falling short of the 1.8 percent gain in light-vehicle sales industrywide. Asbury's domestic- and luxury-brand sales each rose about 2 percent, while import-brand vehicle sales remained flat.
Profit: On a consolidated basis, gross profit for parts and service rose 4.1 percent to $129.6 million and jumped 6.7 percent for F&I to $73.5 million. New-vehicle gross profit dipped 1 percent to $40.6 million, while used-vehicle gross profit rose 4.3 percent to $34.1 million, driven by gains in the wholesale business.
Revenue: Also on a consolidated basis, parts and service revenue increased 1.8 percent to $204.5 million, while F&I revenue rose 6.7 percent to $73.5 million. New-vehicle revenue improved 5.2 percent to $928.7 million. Used-vehicle revenue rose 7.9 percent to $516.9 million, driven by a 9.5 percent increase in used-retail revenue. Wholesale used-vehicle revenue declined 6 percent.
The dealership group completed the purchase of a Chevrolet dealership and a Toyota dealership in the Atlanta market in the second quarter. Combined, Asbury expects the two stores to add about $120 million in annual revenue.
Asbury, of Duluth, Ga., ranks No. 7 on Automotive News' list of the top 150 dealership groups based in the U.S., with new-vehicle retail sales of 99,975 in 2017.
