- Company name
- Asbury Automotive
- Sector
- Auto dealerships
- About
- Asbury Automotive Group is one of the largest car dealer groups in the United States. At September 30, 2026, it operated 155 new vehicle dealerships with 197 franchises for 34 vehicle brands, and 37 collision repair centers. It sells new and used vehicles, and it repairs and services vehicles and sells parts. It also arranges vehicle loans through third-party lenders and sells add-on products such as service contracts. Its own company, Total Care Auto, Powered by Asbury, provides service contracts and other vehicle protection products. Most gross profit comes from parts and service and from finance and insurance, because new and used vehicles earn low margins. Asbury also buys and sells dealerships to change its store portfolio.
- Thesis
- The market prices Asbury for lower dealer profits and for the costs of its change to new dealer software. The company moved all stores from the CDK dealer management system to Tekion, and it finished the change in mid-October 2026. The change added costs and lowered store productivity while staff learned the new system. In Q3 2026, adjusted EPS fell 14% from a year earlier to $6.16, and SG&A rose to 68.5% of gross profit from 65.7% a year earlier. Transaction adjusted net leverage also rose to 3.5 times at September 30, 2026, from 3.4 times at June 30. For the gap to close, three things must be true. The converted stores must show the efficiency gains that management expects, without new disruption. SG&A as a share of gross profit must move back toward the 64% level of the first nine months of 2025 during 2027. Used vehicle, parts and service, and finance and insurance gross profit must grow again, so that leverage falls from 3.5 times. The Q4 2026 report, expected in early 2027, is the first quarter with all stores on Tekion, and it is the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is weaker vehicle demand. The FTC dismissed its case on add-on products on October 5, 2026, so that risk is now smaller.
- Risks
- The change of all stores to the Tekion dealer management system added costs and lowered productivity. The rollout ended in mid-October 2026, but SG&A rose to 68.5% of gross profit in Q3 2026 from 65.7% a year earlier. If the converted stores do not improve, costs can stay high.
Vehicle sales depend on consumer demand, interest rates and vehicle prices. Tariffs on imported vehicles and parts can raise costs for Asbury and for the vehicle makers. Lower demand reduces new and used vehicle gross profit.
Debt is high for a dealer. Long-term debt was $3.37 billion at September 30, 2026, and floor plan notes for vehicle inventory were another $1.76 billion. Transaction adjusted net leverage rose to 3.5 times from 3.4 times at June 30, 2026, while Asbury also buys back shares.
On October 5, 2026, the FTC dismissed its 2024 administrative case against Asbury and three of its dealerships about the sale of add-on products, with no decision on the claims. The FTC said that it still wants price transparency from dealers and can bring cases in federal court. Asbury's own lawsuit against the FTC, filed on October 4, 2024, is still pending.
- Balance sheet
- Cash: $84M
Debt: $3.4B
Net debt: $3.3B
EBITDA, last 12 months: $910M
Net debt / EBITDA: 3.6× (medium)
Interest cover: 4.4×
Asbury funds its vehicle inventory with floor plan notes and funds the rest of the business with senior notes, real estate loans and a revolving credit facility. At September 30, 2026, long-term debt, including the current portion, was $3.37 billion, down from $3.57 billion at December 31, 2025. Floor plan notes payable of $1.76 billion are left out of debt, because the vehicles in inventory secure them. Cash is cash and cash equivalents of $84 million at September 30, 2026. With short-term investments and floor plan offset accounts, cash was $249 million, of which $39 million was held at Total Care Auto. Total liquidity was $1.0 billion, with $821 million available under the used vehicle floor plan line and the revolver. EBITDA is adjusted EBITDA for the 12 months to September 30, 2026. Interest cover is operating income divided by other interest expense for the first nine months of 2026, without floor plan interest. With floor plan interest, it was about 3.0 times. The company's transaction adjusted net leverage ratio was 3.5 times at September 30, 2026, up from 3.4 times at June 30. Asbury had about $322 million left on its share repurchase authorization at September 30, 2026. Per the Q3 2026 Form 10-Q, debt at September 30, 2026 was $2,250.0 million of senior notes (4.50% due 2028 $405.0 million, 4.625% due 2029 $800.0 million, 4.75% due 2030 $445.0 million and 5.00% due 2032 $600.0 million), three real estate facilities of $1,061.0 million, mortgage notes of $25.4 million and a Wells Fargo master loan facility of $43.0 million. The revolving credit facility had no balance, down from $120.0 million at December 31, 2025. Of the long-term debt, $439.2 million is current.
As of Sep 30, 2026.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: Tekion rollout and costs. Failed. Watch: SG&A as a share of gross profit lower than the 67.2% of Q2 2026 and the Tekion rollout on plan for fall 2026 pass; a higher cost share or a delay in the rollout fails. Outcome: Asbury finished the Tekion rollout in mid-October 2026, but SG&A rose to 68.5% of gross profit from 67.2% in Q2 2026.
Jan 27, 2027 (estimate): Q4 2026 earnings: first quarter after the rollout. Pending. Watch: Adjusted EPS growth from a year earlier and transaction adjusted net leverage below 3.5 times pass; a further fall in adjusted EPS or higher leverage fails.
- Recent events
- Oct 27, 2026: Asbury reported Q3 2026 results. Revenue fell 8% to $4.4 billion. Net income fell 29% to $105 million, or $5.84 per diluted share, and adjusted EPS fell to $6.16 from $7.17. SG&A was 68.5% of gross profit, or 67.4% on an adjusted basis. All active stores used Tekion by mid-October 2026, and Total Care Auto products were in all stores in October. Transaction adjusted net leverage was 3.5 times, and Asbury bought back about 1.35 million shares for $278 million in the first nine months of 2026.
Oct 6, 2026: Asbury said that it will report Q3 2026 results before the market opens on October 27, 2026, with a call at 10:00 a.m. ET.
Oct 5, 2026: The FTC dismissed its 2024 administrative case against Asbury and three of its Texas dealerships about add-on products. It gave limited resources and the slow case as the reasons, and no court decided the claims. The FTC said that it still wants price transparency from dealers. Asbury's own lawsuit against the FTC is still pending.
Aug 31, 2026: Asbury named Wendy Reynolds-Dobbs as Senior Vice President and Chief Human Resources Officer, effective September 14, 2026. The former head of human resources, Jed Milstein, left the company on August 19, 2026, and will consult until the end of 2026.
Jul 28, 2026: Asbury reported Q2 2026 results. Revenue was $4.4 billion. Net income fell 25% to $115 million, or $6.25 per diluted share, and adjusted EPS fell to $6.82 from $7.43. Asbury bought back about 668,000 shares for $131 million. About 70% of its stores used the Tekion system, and transaction adjusted net leverage was 3.4 times.
May 4, 2026: Daniel Clara became President and Chief Executive Officer after the annual meeting, as the board decided in December 2025. David Hult, the former CEO, stays on the board. Stockholders also approved the removal of all supermajority voting requirements from the charter.
Apr 28, 2026: Asbury reported Q1 2026 results. Net income was $188 million, or $9.87 per diluted share, which included a net gain of $94 million after tax from dealership sales. Adjusted EPS fell to $5.37 from $6.82. In the quarter, Asbury sold ten dealerships for net proceeds of about $210 million and ended seven franchises. More than 50% of stores used Tekion.