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Asbury Automotive Shares Surge 11% on Record Q4 Revenue and Strong Earnings Beat

Wesley ParkThursday, Jan 30, 2025 2:43 pm ET

3min read

Asbury Automotive Group (NYSE: ABG) shares jumped 11% on Thursday, following the company's release of record fourth-quarter results and a strong earnings beat. The automotive retailer reported adjusted earnings per share (EPS) of $7.26, surpassing the consensus estimate of $6.04, and revenue of $4.5 billion, up 18.2% year-over-year and ahead of expectations. This impressive performance marks a new all-time high for the company.

Asbury Automotive's strong Q4 results reflect the company's operational efficiency and strategic investments in technology and workforce development. The company's Parts & Service segment emerged as a standout performer, with gross profit growth of 19% and same-store growth of 11%. Additionally, the company demonstrated improved operational efficiency, with same-store SG&A as a percentage of gross profit at 63.0%, marking back-to-back quarterly improvements.

Despite a decline in gross margin and used vehicle retail profitability, Asbury managed to improve its SG&A costs as a percentage of gross profit for the second consecutive quarter. The company's focus on operational efficiency has paid off, with net income increasing 132% to $129 million ($6.54 per diluted share) in the fourth quarter of 2024 compared to the same period in 2023.

Asbury Automotive's Q4 2024 results highlight the company's ability to navigate the evolving auto retail landscape through operational discipline and strategic investments. The company's strong performance, coupled with its robust balance sheet and ongoing share repurchase program, positions Asbury Automotive well for long-term growth and shareholder returns.

Investors should monitor Asbury Automotive's key performance indicators, such as same-store revenue growth, Parts & Service segment performance, gross margin, operational efficiency, F&I per vehicle retailed, and used vehicle retail gross profit, to evaluate the company's long-term growth potential. By focusing on these KPIs, investors can better assess Asbury Automotive's competitive position and make informed decisions about their investments.

In conclusion, Asbury Automotive Group's strong Q4 results and earnings beat have driven shares up 11% and demonstrate the company's ability to navigate the evolving auto retail landscape. Investors should monitor the company's key performance indicators and consider the potential risks and challenges facing the company to make informed investment decisions.

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