Asbury Automotive Group, Inc.

Asbury reported second-quarter revenue of $4.4 billion, gross profit of $753 million, and gross margin of 17.2%. Adjusted operating margin was 5.3%, adjusted net income was $125 million, adjusted EBITDA was $235 million, and adjusted EPS was $6.82. Management said adjusted EPS would have been $7.48 excluding the $0.66 per share noncash deferral headwind from TCA. Same-store new units were down 6%, same-store new PVR was $2.9 thousand, all-store new PVR was $3.12 thousand, used retail PVR was $1.93 thousand, and same-store adjusted SG&A as a percentage of gross profit was 65.3%; on an all-store basis it was 66%, down 260 bps from Q1. For the year, management still expects about $250 million of CapEx, with $117 million spent in the first half, and sees the third quarter as a heavier rollout quarter because 30% of stores still remained to convert as of the call.

Daniel Clara framed 2026 as a transition year centered on completing the Tekion DMS rollout, improving operations, and using technology to create long-term efficiency gains. He emphasized that mature Tekion markets are already showing better productivity, stronger customer pay performance, higher technician efficiency, and better sales effectiveness, citing June gains in Koons/Georgia/Florida markets. His tone was confident and patient: the company is still absorbing rollout disruption, but he repeatedly pointed to a path toward normalized growth and improved shareholder returns.

Michael D. Welch focused on the quarter’s hard numbers and the cost/cash impact of the Tekion transition. He cited $4.4 billion of revenue, $753 million of gross profit, 17.2% gross margin, $125 million of adjusted net income, $235 million of adjusted EBITDA, and $6.82 of adjusted EPS, noting $0.66 per share of noncash deferral headwind from TCA. He said adjusted SG&A/gross was 66% on an all-store basis, expects gradual improvement through the year, and sees cost savings starting in late 2026 and into 2027 as more stores become proficient. He also said Asbury generated $305 million of adjusted operating cash flow year to date, had $966 million of liquidity, spent $117 million on capex in the first half, and ended with 3.4x transaction-adjusted net leverage while buying back $131 million of stock in the quarter.

Analysts focused on whether the Q2 slowdown versus Q1 was mostly Tekion-related, the pace of the remaining rollout, the weak same-store new and used unit trends, and the path for SG&A and fixed ops recovery. Management said Q1 had weather noise, while Q2 was more normal, but Tekion still created friction in new vehicle sales, fixed ops, and SG&A because many stores were still in the 5- to 6-month post-conversion window. They also explained that used volume was being rebuilt deliberately rather than chased, with more lease returns and loaner-car sourcing expected to help later in the year, and that the rollout timing was intentionally slowed in May to let the Chambers acquisition absorb change before resuming in June and July.