Asbury Automotive Group Reports 16% Revenue Growth, Net Income Decline in Q3 2024

Asbury Automotive Group, Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company achieved total revenue of $4,236.7 million for the three months ended September 30, 2024, marking a 16% increase from $3,666.2 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $12,684.1 million, up 15% from $10,991.0 million in the prior year.

The growth in revenue was primarily driven by increases in new and used vehicle sales, with new vehicle revenue rising to $2,163.5 million in Q3 2024, a 16% increase from $1,861.9 million in Q3 2023. Used vehicle revenue also saw a 16% increase, reaching $1,294.7 million compared to $1,111.7 million in the previous year. Parts and service revenue increased by 13% to $593.1 million, while finance and insurance (F&I) net revenue rose by 12% to $185.4 million.

Despite the revenue growth, Asbury's profitability faced challenges. Net income for the three months ended September 30, 2024, was $126.3 million, a decrease of 25% from $169.2 million in Q3 2023. For the nine-month period, net income fell to $301.5 million, down 45% from $547.0 million in the same period of 2023. The decline in net income was attributed to increased selling, general, and administrative (SG&A) expenses, which rose by 19% to $466.5 million in Q3 2024, largely due to the acquisition of Jim Koons Dealerships in December 2023.

The acquisition of the Jim Koons Dealerships, which included 20 new vehicle dealerships and six collision centers for approximately $1.50 billion, significantly impacted the company's financials. Revenue from the acquired dealerships contributed $2,110.1 million, with a net income of $67.9 million for the nine months ended September 30, 2024.

Asbury's balance sheet showed improvements, with cash and cash equivalents increasing to $60.3 million as of September 30, 2024, up from $45.7 million at the end of 2023. Total current assets rose slightly to $3,104.5 million, while total current liabilities decreased to $2,594.2 million. However, long-term debt increased to $3,299.5 million from $3,121.2 million at the end of 2023.

The company also faced operational challenges, including the impact of a cyber incident in June 2024, which affected sales and service operations. Additionally, the Federal Trade Commission initiated an enforcement action against the company, alleging violations related to the sale of add-on products, which could have reputational and financial implications.

Overall, while Asbury Automotive Group demonstrated strong revenue growth, its profitability was hindered by rising expenses and external challenges.