Asbury Automotive Group, Inc. reported first‑quarter 2026 results that saw net income rise to $188 million, or $9.87 per diluted share, a 42% increase from the $132 million ($6.71 per share) reported in Q1 2025. Adjusted net income, which excludes one‑time items, fell to $102 million, or $5.37 per share, a 24% decline from the $134 million ($6.82 per share) adjusted earnings in the same period last year. Adjusted revenue for the quarter was $4.113 billion, slightly below the $4.148 billion recorded in Q1 2025, reflecting a modest year‑over‑year decline in top‑line sales.
The headline GAAP net income beat was largely driven by gains from dealership divestitures, which offset a decline in underlying operational profitability. Adjusted earnings per share missed consensus estimates of $5.62 to $5.71, and revenue fell short of the $4.37 billion to $4.48 billion range expected by analysts. The miss is attributed to a combination of a learning curve associated with the rollout of the Tekion Dealer Management System, adverse weather that disrupted operations, and higher operating costs that eroded margin.
Parts and service, the company’s most resilient segment, grew 7% in revenue and now accounts for more than half of total gross profit, underscoring its role as a stabilizing force amid broader headwinds. Other segments, such as new and used vehicle sales, did not offset the decline in adjusted performance, contributing to the overall revenue dip.
"While adverse weather and the expected learning curve associated with the adoption and integration of the new DMS occurred in the quarter, we believe the foundational investments we've made position us to drive meaningful efficiency gains and improved performance as we progress through the year," said President and CEO David Hult. He added that the company is "making great strides towards meeting our strategic objectives, including the rollout of Tekion across our stores."
Investors reacted negatively to the earnings release, focusing on the missed adjusted EPS and revenue guidance and the operational challenges highlighted by management. The market’s response reflected concerns about the company’s ability to sustain growth while navigating the Tekion transition and weather‑related disruptions.
The company continued its share repurchase program, buying back approximately 678,000 shares for $147 million in the quarter, and the board increased the share repurchase authorization. No new forward guidance was issued, leaving investors to interpret the results in the context of the company’s ongoing transformation and the broader auto‑retail headwinds.
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