Third quarter 2026
Filed Oct 27, 2026Third-quarter revenue was $4.4 billion and net income was $105 million, with diluted EPS of $5.84 and adjusted diluted EPS of $6.16.
Revenue, gross profit, operating income, net income and diluted EPS all declined year over year, while used retail gross profit increased and used retail unit volume increased sequentially by 4.5%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30, 2026GAAP | $4.41B | – | (8) % |
| New vehicle revenue, three months ended September 30, 2026GAAP | $2.29B | – | (9) % |
| Used vehicle retail revenue, three months ended September 30, 2026GAAP | $1.15B | – | (6) % |
| Used vehicle wholesale revenue, three months ended September 30, 2026GAAP | $140.3M | – | (24) % |
| Total used vehicle revenue, three months ended September 30, 2026GAAP | $1.29B | – | (8) % |
| Parts and service revenue, three months ended September 30, 2026GAAP | $644M | – | (2) % |
| Finance and insurance, net revenue, three months ended September 30, 2026GAAP | $182.5M | – | (9) % |
| Gross profit, three months ended September 30, 2026GAAP | $731.5M | – | (9) % |
| Total gross profit margin, three months ended September 30, 2026GAAP | 16.6 % | – | (14) bps |
| New vehicle gross profit, three months ended September 30, 2026GAAP | $129M | – | (20) % |
| Used vehicle retail gross profit, three months ended September 30, 2026GAAP | $61.8M | – | 1 % |
| Parts and service gross profit, three months ended September 30, 2026GAAP | $371M | – | (5) % |
| Finance and insurance gross profit, three months ended September 30, 2026GAAP | $170.4M | – | (9) % |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | $501.2M | – | (5) % |
| Adjusted selling, general and administrative expenses, three months ended September 30, 2026non-GAAP | $493M | – | (4) % |
| SG&A as a % of gross profit, three months ended September 30, 2026GAAP | 68.5 % | – | 284 bps |
| Adjusted SG&A as a % of gross profit, three months ended September 30, 2026non-GAAP | 67.4 % | – | 319 bps |
| Income from operations, three months ended September 30, 2026GAAP | $206.6M | – | (15) % |
| Adjusted income from operations, three months ended September 30, 2026non-GAAP | $214.9M | – | – |
| Income from operations as a % of revenue, three months ended September 30, 2026GAAP | 4.7 % | – | (37) bps |
| Adjusted income from operations as a % of revenue, three months ended September 30, 2026non-GAAP | 4.9 % | – | (67) bps |
| Income before income taxes, three months ended September 30, 2026GAAP | $139.1M | – | (31) % |
| Income tax expense, three months ended September 30, 2026GAAP | $34M | – | (36) % |
| Net income, three months ended September 30, 2026GAAP | $105.1M | – | (29) % |
| Adjusted net income, three months ended September 30, 2026non-GAAP | $110.8M | – | – |
| Basic EPS, three months ended September 30, 2026GAAP | $5.86 | – | (22) % |
| Diluted EPS, three months ended September 30, 2026GAAP | $5.84 | – | (22) % |
| Adjusted diluted EPS, three months ended September 30, 2026non-GAAP | $6.16 | – | – |
| Total revenue, nine months ended September 30, 2026GAAP | $12.91B | – | (3) % |
| Gross profit, nine months ended September 30, 2026GAAP | $2.21B | – | (3) % |
| Income from operations, nine months ended September 30, 2026GAAP | $620M | – | (16) % |
| Net income, nine months ended September 30, 2026GAAP | $407.6M | – | (6) % |
| Cash provided by operating activities, nine months ended September 30, 2026GAAP | $617.7M | – | – |
| Adjusted cash flow provided by operating activities, nine months ended September 30, 2026non-GAAP | $525.2M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| DealershipsRevenue from external customers for the three months ended September 30, 2026. | $4.33B | – | – |
| TCARevenue from external customers for the three months ended September 30, 2026. | $82.6M | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Year-to-date through September 30, 2026, the Company repurchased approximately 1.35 million shares for $278 million.
- As of September 30, 2026, the Company had approximately $322 million remaining on its share repurchase authorization.
What drove it
- Used vehicle retail gross profit increased 1 % to $61.8 million, while average gross profit per used retail vehicle increased 10 % to $1,788.
- Used vehicle retail unit volume had a sequential increase of 4.5%.
- Parts and service represented 50.7 % of total gross profit in the third quarter of 2026.
- New vehicle revenue declined (9) % and total new vehicle unit sales declined (9) %.
- The Company converted 47 stores to Tekion in the third quarter and completed the company-wide conversion in mid-October.
- The Total Care Auto rollout was completed across all Asbury stores in October.
Concerns
- Total gross profit declined (9) %, faster than the (8) % decline in total revenue.
- New vehicle gross profit declined (20) % and total new vehicle gross margin declined (74) bps to 5.6 %.
- Parts and service gross margin declined (141) bps to 57.6 %.
- SG&A as a % of gross profit increased 284 bps to 68.5 %, and adjusted SG&A as a % of gross profit increased 319 bps to 67.4 %.
- Wholesale used vehicle revenue declined (24) % and wholesale gross profit was $(0.6) million.
- Adjusted diluted EPS was $6.16, compared with $7.17 in the prior-year quarter.
What to watch
- Whether customer pay gross profit and total parts and service gross profit gains in the longest-tenured Tekion markets extend across the completed company-wide conversion.
- Used retail volume and gross profit per unit following the reported 4.5% sequential increase in used retail units.
- New vehicle volume, gross profit per unit and gross margin, which each declined in the third quarter.
- SG&A as a percentage of gross profit following the increase to 68.5 %.
- The pace and amount of repurchases under the approximately $322 million remaining authorization.
Balance sheet and cash flow
- Cash and cash equivalents were $84.5 million as of September 30, 2026, compared with $40.4 million as of December 31, 2025.
- Cash, short term investments, and floorplan offset accounts were $210 million as of September 30, 2026, excluding $39 million of cash at Total Care Auto, Powered by Asbury.
- Availability under the used vehicle floorplan line and revolver was $821 million, for total liquidity of $1.0 billion.
- Floor plan notes payable were $1,764.3 million as of September 30, 2026, compared with $2,027.0 million as of December 31, 2025.
- Long-term debt, including current portion, was $3,369.6 million as of September 30, 2026, compared with $3,572.0 million as of December 31, 2025.
- Transaction adjusted net leverage ratio was 3.5x at quarter end.
- New vehicle inventory days supply was 53 and used vehicle inventory days supply was 41 as of September 30, 2026.
Analysis
Asbury reported a lower third quarter across its principal GAAP earnings measures. Total revenue was $4,413.6 million, down (8) %, while gross profit declined (9) % to $731.5 million. Income from operations fell (15) % to $206.6 million and net income declined (29) % to $105.1 million. Diluted EPS was $5.84, compared with $7.52, while adjusted diluted EPS was $6.16, compared with $7.17.
The revenue decline was broad across the retail business. New vehicle revenue declined (9) %, used vehicle retail revenue declined (6) %, wholesale revenue declined (24) %, parts and service revenue declined (2) %, and F&I revenue declined (9) %. Used retail was the exception on gross profit performance: used retail gross profit rose 1 % to $61.8 million and average gross profit per used retail vehicle increased 10 % to $1,788. The filing also reported a 4.5% sequential increase in used retail unit volume.
Margin pressure remained pronounced in new vehicles and parts and service. New vehicle gross profit decreased (20) % and new vehicle gross margin declined (74) bps to 5.6 %. Parts and service gross profit fell (5) %, and its gross margin decreased (141) bps to 57.6 %. Total gross profit margin was 16.6 %, down (14) bps. At the same time, SG&A as a percentage of gross profit increased to 68.5 % from 65.7 %, constraining operating profitability despite a (5) % reduction in absolute SG&A expense.
Capital allocation remained focused on repurchases, with approximately 1.35 million shares repurchased for $278 million year-to-date and approximately $322 million left under the authorization. Liquidity was $1.0 billion, and transaction adjusted net leverage was 3.5x. The company completed its Tekion conversion in mid-October after converting 47 stores in the third quarter, and management cited 7% customer pay gross profit growth and 5% total parts and service gross profit growth in its longest-tenured Tekion markets.
No forward financial guidance was included in the filing. The reported period leaves attention on whether the completed technology rollout can support operating efficiency and service profitability, while new vehicle margins, wholesale performance and SG&A leverage remain key reported pressure points.
Management, verbatim
We have completed one of the most ambitious technology initiatives in Asbury’s history, every active store is now operating on Tekion.
Dan Clara, President and Chief Executive Officer
Our teams converted 47 stores in the third quarter alone, the most in any single quarter, and finished the remaining active stores in October to bring the rollout across the finish line.
Dan Clara, President and Chief Executive Officer
With one modern platform now powering the entire company, we have built a strong foundation to serve our guests, make faster decisions, and operate more efficiently.
Dan Clara, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance
- Previous-period outlook for guidance comparison
- Free cash flow
- Dividend declaration or payment
- Quarterly capital expenditures
- GAAP effective income tax rate
- Prior-quarter figures for reported third-quarter financial metrics
- Year-over-year percentage changes for adjusted net income, adjusted income from operations and adjusted diluted EPS
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.