ABG Filings — Asbury Automotive Group, Inc. - FilingSpy
ABG
Asbury Automotive Group, Inc.
A Fortune 500 franchised automotive retailer that sells new and used cars and runs its own extended-service-contract brand, Total Care Auto, across dealerships in fifteen states. Founded in 1995 by Tom Gibson, a former Subaru of America executive, it was built as a chain of "megadealers" and went public in 2002. In 2025 it bought the Herb Chambers dealership group in the Northeast.
New-vehicle gross margin fell to 5.9% and SG&A consumed 67.2% of gross profit, driving a 25% drop in net income.
New-vehicle compressed another 100 , reaching 5.9% — the lowest level in the data provided. was nearly flat at $4.38 billion and fell 25% to $114.6 million, as a 14% drop in new-vehicle and higher SG&A from the Herb Chambers acquisition outweighed a 5% gain in parts and service. The multi-year shows no sign of leveling off, and the cost structure is now absorbing over two-thirds of every gross profit dollar.
Key takeaways
New-vehicle fell 14% to $138.2 million as compressed 100 to 5.9%, which management attributed to the softening of historically high margins and affordability constraints.
rose 401 to 67.2%, driven by the inclusion of the Herb Chambers businesses and relatively flat .
Parts and service grew 5% to $374.2 million, led by an 8% increase in customer-pay , which management linked to a historically high average vehicle age of 13.0 years.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income fell 25% to $114.6M as new vehicle margin compression and higher SG&A offset gains in parts & service.
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Total was nearly flat at $4.38B, as a 6% increase in parts and service revenue and 1% increase in new vehicle revenue were offset by a 4% decline in used vehicle revenue.
New vehicle dropped 14% to $138.2M, with compressing 100 to 5.9% due to softening of historically high margins and affordability constraints.
fell 25% to $114.6 million, and dropped 19.5% to $6.25, as the margin and cost pressures were partially offset by a lower .
The company repurchased $130.6 million of common stock during the quarter under a newly expanded $500 million authorization, and total liquidity stood at $966.5 million.
A $4.2 million asset charge was recognized on a dealership held for sale, and other rose $5.1 million partly due to borrowings for the Herb Chambers acquisition.
What changed
Same-store new-vehicle fell to 5.9% from 6.2% in Q3 2025 and 6.9% in Q2 2025, continuing the multi-year compression that earlier filings flagged as a key risk; the decline shows no sign of stabilizing.
rose to 67.2% from 63.2% in Q2 2025 and 65.7% in Q3 2025, exceeding the elevated levels seen in recent quarters as the Herb Chambers integration and Tekion DMS implementation added costs.
The FTC administrative proceeding flagged in every prior filing remains unresolved, with no material developments reported in this quarter's legal proceedings section.
Variable-rate debt stood at $2.09 billion, down from $2.62 billion at year-end 2025, reducing the estimated annual sensitivity from a 100-basis-point rate move to $20.9 million from $26.2 million.
What to watch
Whether same-store new-vehicle stabilizes near 5.9% or continues to decline, as the multi-year compression from pandemic-era highs persists.
The pace of SG&A as the Herb Chambers acquisition is integrated and the Tekion DMS implementation progresses, with SG&A now consuming 67.2% of .
The outcome of Asbury's federal lawsuit to enjoin the FTC administrative proceeding on add-on product sales, and any resulting penalties or changes to F&I sales practices.
The impact of $2.09 billion in variable-rate debt on if rates remain elevated, with a 100-basis-point rise potentially adding $20.9 million in annual interest costs.
Parts and service grew 5% to $374.2M, driven by an 8% increase in customer pay , benefiting from a historically high average vehicle age of 13.0 years.
as a percentage of rose 401 to 67.2%, driven by the inclusion of the Herb Chambers businesses and relatively flat gross profit.
The company recognized a $4.2M charge on a dealership held for sale and reported a $5.1M increase in other , net, partly due to borrowings for the Herb Chambers acquisition.
Liquidity remained strong at $966.5M, and the company repurchased $130.6M of common stock during the quarter under a newly expanded $500M authorization.
Quantitative and Qualitative Disclosures About Market Risk
Interest-rate risk from $2.09B variable-rate debt is partially hedged with five SOFR-based swaps; a 100bp move would change annual interest expense by $20.9M.
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Total variable-rate debt was $2.09B at June 30, 2026, including floor plan notes, used-vehicle floor plan, , and certain mortgages.
A 100-basis-point parallel shift in rates would alter annual by approximately $20.9 million.
Floor plan assistance from manufacturers reduced cost of sales by $52.3M in H1 FY2026, but future assistance may decline if rates rise.
The company uses five interest rate swaps designated as cash-flow hedges to mitigate SOFR variability; they contain no ineffectiveness.
Swap notional values range from $63.2M to $250.0M with maturities between December 2026 and July 2030; unrealized gains/losses go to OCI.
As of the date of this filing, there have been no additional material legal proceedings or material developments in the legal proceedings disclosed in Part 1, Item 3, of our Annual Report on Form 10-K for the year ended December 31, 2025. For more information, see Note 13 "Commi…
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As of the date of this filing, there have been no additional material legal proceedings or material developments in the legal proceedings disclosed in Part 1, Item 3, of our Annual Report on Form 10-K for the year ended December 31, 2025. For more information, see Note 13 "Commitments and Contingencies" within the accompanying condensed consolidated financial statements.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that affect our business and financial results that are discussed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended Decembe…
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In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that affect our business and financial results that are discussed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. There have been no material changes to such risk factors.
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