Asbury reports 10% gain in used gross profits, record online share of used sales

DULUTH, Ga. – 

Asbury Automotive Group set a used-car record during the second quarter: a fifth of its pre-owned sales were done online.

Announcing quarterly results Tuesday, Asbury had a couple other used-car strong points during Q2, including a 10% hike in average used-vehicle retail gross profit per unit and a 60 basis-point increase in gross margins on used retail.

Used-car retail revenue was down 15% year-over-year at $412.6 million. Asbury reported wholesale used-car revenue of $34.9 million, a 26% decrease. Total used revenue was $447.5 million, a 16% decline.

Total used-vehicle gross profits were up 3% at $37.1 million for the quarter. However, retail used gross profits were down 9% at $31.6 million. On the wholesale side, gross profits climbed from $1.2 million to $5.5 million.

Asbury retailed 18,400 used vehicles during the quarter, which was down 17% year-over-year.

The used-to-new ratio climbed from 84.2% to 91.7%.

Moving to average gross profit per unit, this came in at $1,717 for used retail, beating year-ago figures by 10%.

Used-vehicle retail gross margins climbed from 7.1% to 7.7%.

Moving over to year-to-date results, used retail revenue was down 9% at $858.6 million, wholesale revenue was down 17% at $82.1 million and total used revenue was off 10% at $940.7 million.

Used retail gross profits for the first half were at $62.8 million, down 8%. Wholesale gross profits were at $5.0 million, up from $2.1 million a year ago.

Total used gross profits were down 4% at $67.8 million.

Asbury retailed 38,687 used vehicles in the first half, down 11% year-over-year.

The used-to-new ratio climbed from 85.7% to 92.0%.

Average gross profit per unit on used retail sales was $1,623 for the first half, up 3% year-over-year.

Used retail gross margins climbed from 7.2% to 7.3%.

Offering some overall commentary, Asbury president and chief executive officer David Hult said in a news release: “We delivered a very strong quarter and proved out the resilience and the flexibility of our business model by delivering a record operating margin of 5.7% and a record low SG&A as a percentage of gross profit of 62.7% in an 11.3 million SAAR environment.

“Our focus on gross profit combined with our cost restructuring efforts allowed us to remain pro-active and committed to long term growth by moving forward with acquiring 12 Park Place luxury franchises in the Dallas Fort Worth Market under more favorable terms than the prior agreement,” he said. “This acquisition will add approximately $1.7 billion in expected annualized revenues and transform our total portfolio to 49% luxury stores. With the addition of Park Place, Asbury will be a stronger, more diversified company.

“Finally, I want to thank our teammates across our store network for their unwavering commitment and emphasis on safety during this pandemic; our performance is a direct result of their hard work and service.”

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