Asbury Hits $1,500 Per Copy in Q1
Describing F&I as 'very fundamental' to its success, Asbury CEO Craig Monaghan said the group will continue to push for improvements in that area as long as 'margin pressure' continues to squeeze the showroom.
DULUTH, Ga. — Executives from Asbury Automotive Group had good news to share in a conference call with investors and reporters: In the first quarter of 2017, the nation’s seventh-largest auto retailer enjoyed gains in new- and used-vehicle sales, F&I and fixed ops.
Although total revenue remained flat at $1.6 billion when compared to the same period a year ago, Asbury recorded a 3% increase in total revenue and gross profit on a same-store basis. Revenue from the sale of new and used vehicles was up 4%; however, both segments suffered downticks in gross profit. Sales of certified pre-owned units were up 13%.
On the F&I side, Asbury’s profit per vehicle retailed improved by $91 compared to the year-ago period, pushing the group past the $1,500-per-copy mark. F&I gross profit increased by 9% and fixed ops gross profit was up 5%.
Describing F&I as “very fundamental” to its success, the group CEO Craig Monaghan said Asbury would continue to push for improvements in that area as long as “margin pressure” continues to squeeze the showroom.
“We do recognize that some of our competitors do a better job at F&I than we do,” Monaghan said. “We’re making progress. There’s always the bottom 25% that needs to do better. A lot of it boils down to training, the processes, following the procedures that we’ve got in place, and we’re just going to stick to it.”
In January, Asbury made a high-profile acquisition of Noblesville, Ind.’s Hare Chevrolet, which had been the nation’s oldest family-run transportation company, according to The Indianapolis Star. Asbury also acquired an Indianapolis Isuzu truck franchise and opened a new Nissan point in Cumming, Ga.
“With respect to the market, these were acquisitions that made a lot of sense to us. They were in markets that we feel good about, markets that we feel are going to continue to grow. They were priced right,” Monaghan said. “And if we find that it makes sense, we’re going to jump all over them. If we could find another Hare Chevrolet-type transaction tomorrow, we’d buy.”
Though optimistic about the group’s performance for the rest of the year, Vice President and Treasurer Matthew Pettoni admitted the second quarter was off to an inauspicious start — at least for two Dallas-area stores. They were hammered, along with several other dealerships along Plano Parkway in Plano, Texas, by a sudden and severe hailstorm on April 21, causing up to $20 million in damage.
“Though our insurance policies limit our losses to $1 million, our dealerships were left with virtually no vehicle inventory, and it is too soon to say how long it will be before these stores are fully operational again,” Pettoni said.
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