Key Highlights

  • Revenue fell 8% to $4,413.6 million from $4,800.9 million in the third quarter.
  • Adjusted diluted EPS was $6.16 versus $7.17, and GAAP diluted EPS was $5.84 versus $7.52.
  • New-vehicle gross profit per unit fell 12% to $2,949 on 43,736 units sold.
  • Parts and service gross profit fell 5% to $371.0 million at a 57.6% gross margin.
  • Year-to-date repurchases totaled about 1.35 million shares for $278 million, with about $322 million of authorization remaining.

Asbury Earnings: Why Did Adjusted EPS Land Below the Estimate?

Asbury Automotive Group (NYSE:ABG) reported third-quarter 2026 results on Tuesday, October 27, with adjusted diluted EPS of $6.16, down from $7.17 a year earlier and below the analyst estimate of $6.42 (a negative 4.02% surprise as screened). GAAP diluted EPS was $5.84 versus $7.52. Revenue fell 8% to $4,413.6 million, and gross profit fell 9% to $731.5 million at a 16.6% margin.

The release did not include a revenue estimate or full-year guidance.

Asbury operates new and used vehicle dealerships, earning profit from vehicle sales, parts and service, and finance and insurance.

Asbury Margins: Which Vehicle and Service Lines Pulled Profit Down?

New-vehicle revenue fell 9% to $2,293.0 million on 43,736 units, and gross profit per unit dropped 12% to $2,949. Used retail revenue fell 6% to $1,153.8 million on 34,586 units, down 8%, though retail gross profit per unit rose 10% to $1,788.

Parts and service revenue slipped 2% to $644.0 million, with gross profit down 5% to $371.0 million. Finance and insurance net revenue was $182.5 million, and gross profit per vehicle retailed was $2,176, flat year over year.

Same-store revenue fell 6% to $4,197.8 million and same-store gross profit fell 7% to $695.0 million.

Asbury Costs: How Large Was the Tekion Conversion Drag?

Selling, general and administrative expense was $501.2 million, or 68.5% of gross profit on a GAAP basis, and $493.0 million, or 67.4%, adjusted. Operating income was $206.6 million, a 4.7% margin, or 4.9% adjusted. GAAP net income fell 29% to $105.1 million, and adjusted net income fell 21% to $110.8 million.

Adjustments after tax included $6 million, or $0.32 per share, of Tekion implementation expenses and $1 million, or $0.03 per share, of duplicative dealer management system costs. The net gain on dealership divestitures was $0.7 million versus $35.7 million a year earlier.

The chief executive said every active store now operates on the Tekion platform, with 47 stores converted in the quarter and the company-wide conversion finished in mid-October. In the longest-tenured Tekion markets, customer pay gross profit rose 7% and total parts and service gross profit rose 5%.

Asbury Balance Sheet: Where Did Cash Go and What Comes Next?

Liquidity was $1.0 billion, including $210 million of cash, short-term investments and floorplan offset accounts and $821 million of floorplan and revolver availability. Long-term debt including the current portion was $3,369.6 million, down from $3,572.0 million at December 31, 2025, a reduction of $202.4 million as calculated here. Transaction-adjusted net leverage was 3.5 times.

Year to date through September 30, Asbury repurchased about 1.35 million shares for $278 million, an average of roughly $206 per share by calculation, with about $322 million of authorization remaining. Total Care Auto revenue was $82.6 million with segment operating income of $20.7 million, and its rollout reached all stores in October.

Watch whether new-vehicle profit per unit stabilises, whether the completed conversion lowers the cost ratio from 67.4% and how much repurchase capacity is used in the fourth quarter.