Asbury Q2: Mixed Financials
Asbury Automotive Posts Mixed Q2 Results: Profit Down, EPS Exceeds Forecasts
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Key Points
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Q2 GAAP net income was $114.6 million, down from $152.8 million a year earlier; adjusted net income was $125.0 million.
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Revenue for the quarter rose 0.3% year over year to about $4.384 billion.
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Adjusted EPS was $6.82, beating analysts' consensus by $0.36, while revenue was $4.4 billion, slightly below the consensus estimate of $4.51 billion.
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Used retail gross profit per unit reached $2,002 (up 16% year over year), while parts and service revenue rose 6% to $635 million and finance-and-insurance per vehicle retailed stood at $2,216.
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Adjusted net income for the quarter excludes $4 million of Tekion implementation expenses, $3 million in asset impairments, $2 million of weather-related losses, and $1 million of duplicative DMS expenses.
Asbury Automotive Group posted a sharp drop in profit for the second quarter of 2026, with net income falling 25% to $115 million, or $6.25 per diluted share, according to Financial Content. Revenue came in at $4.4 billion, just barely above last year but short of the $4.51 billion analysts had expected.
The results were bruised by a costly tech overhaul and a drop in used-car sales. Still, shares rose 2.8% after the company's adjusted earnings of $6.82 per share beat Wall Street's estimate of $6.46, Investing.com reported.
Tekion Tech Rollout Weighs on Quarterly Profit
Asbury is replacing its core dealership software with a platform called Tekion. The switch is expensive right now. Implementation costs hit $11.4 million in Q2 alone, according to 247 Wall St. The company also took charges for asset write-downs, weather damage, and duplicate software fees.
The rollout is now about 70% done. Asbury expects to finish by fall 2026. Management said the technology will cut costs and boost efficiency over the long run. But for now, the expenses are squeezing margins and hitting the bottom line.
Used-Car Sales Slide, But Service Revenue Holds Up
Used retail units sold fell about 9% compared to a year ago. That hurt overall revenue. But Asbury made more money on each used car it did sell. Used retail gross profit per unit jumped 16% year over year to $2,002, according to Financial Content.
Parts and service revenue rose 6% to $635 million, offering a bright spot. Finance-and-insurance income per vehicle retailed stood at $2,216. Those steadier revenue streams helped cushion the blow from weaker used-car volume.
Asbury Spends $131 Million Buying Back Its Own Stock
Even as profits fell, Asbury pushed forward with share buybacks. The company repurchased about $131 million of its own stock during the quarter. That signals management's confidence in the company's long-term value, despite the near-term cost pressures.
Asbury kept its liquidity strong. Leaders pointed to the Tekion rollout as a key investment in future efficiency. Once the system is fully live this fall, the company expects to see the benefits show up in margins and operations.
EPS Beat Saves the Day as Revenue Misses Target
Adjusted earnings per share of $6.82 came in $0.36 above analyst estimates, according to Investing.com. That beat helped lift the stock despite the revenue shortfall. Adjusted net income for the quarter was $125 million, down 15% from a year ago but still ahead of what Wall Street had penciled in.
Revenue of $4.384 billion rose just 0.3% year over year but missed the $4.51 billion consensus. The gap came largely from soft used-car volumes and ongoing integration expenses tied to the tech overhaul. Analysts and investors will be watching closely to see if the Tekion payoff arrives on schedule this fall.
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