Asbury: Q3 Revenue, Gross Profit Down Due to Hurricanes
Total revenue and gross profit were down 5% and 2% from a year ago, respectively, with Hurricane Irma having a significant impact on sales in the group’s core Florida and Georgia markets. F&I was a bright spot, with total gross profit up 4% and the group’s per-copy average increasing by $142 from a year ago to $1,547.
DULUTH, Ga. — Asbury Automotive officials said hurricanes Harvey and Irma were behind the group’s third-quarter declines in total revenue and total gross profit, with the latter storm having a more significant impact on the group’s two core markets.
The dealer group reported total revenue of $1.6 billion, which was down 5% from a year ago. Total gross profit fell 2% from a year ago to $260.3 million. Senior Vice President and CFO Sean Goodman said the group faced limited property damage from either hurricane, and the negative impact of Harvey was made up with record profits from the company's Houston location, David McDavid Nissan. Irma, however, didn’t generate the same demand for replacement vehicles.
"In the case of hurricane Irma, although we had very limited property damage, stores in Florida and George, our two largest states, were closed for an extended period of time and we lost business that we do not expect to recover," Goodman said. "Overall, we estimate that were it not for these hurricanes, we would have sold well over 1,000 more vehicles, our pretax income would have been at least $3.5 million higher and earnings per share would have been at least $0.10 higher.”
The dealer group sold 1,628 fewer new vehicles than a year ago for a total of 25,187 units sold. Margins were 40 basis points lower than a year ago, officials noting that sequential margins increased 10 basis points from last year to 4.7%.
“Given the current volatility of the market, it is too early to make predictions for the 2018 [seasonally adjusted annual rate],” said David Hult, executive vice president and COO. “However, we believe new-vehicle margins are finally starting to stabilize around current levels and our inventories are in good shape.”
As for used, Asbury sold 1,253 fewer vehicles from a year ago for a total of 18,777 units sold. Gross profit margins declined 60 basis points from a year ago to 7.1%, with Hult noting that the decrease was driven by a combination of aggressive new-vehicle pricing and continued inflow of off-lease vehicles.
“As I mentioned in the past, used-vehicle sales provide incremental profit opportunities in both F&I and parts and service,” he said. “We reduced our used-vehicle inventory to 35 days’ supply, which is five days lower than last year.
“Were it not for the hurricanes, our days’ supply would have been even lower.”
The dealer group’s F&I team continued to deliver in the third quarter, with gross profit increasing 4% from a year ago to $67.7 million. The group also recorded an increase in its per-copy average, which rose by $142 from a year ago to $1,547.
"These gains help drive our total front-end yield up $10 to $3,138 per vehicle," said Hult. “The success of F&I is a two part. First part is store level performance certainly increased. We are continuing to see our product sales as a piece of our PVR increase percentage wise compared to finance reserve. And the second piece of it is renegotiated contracts with our vendors. We’ve been disciplined and focused on training. We were lucky to have great talent and leaders in the field.”
More F&I

How AI-Powered Coaching Is Transforming F&I Performance
See how AI-powered coaching can turn F&I customer conversations into actionable insights that support compliance, performance and profitability
Read More →
Sell Value, Build Trust
In this video, Trent White explains why selling on value, not fear, builds lasting customer trust, reduces cancellations, and drives long-term success.
Read More →
F&I Sales Give Dealers First-Half Lift
Product business shored up total profits to avoid an overall revenue tanking as product penetrations held steady, StoneEagle reported.
Read More →
Targeted Training Drives Results
Today’s technology, instead of threatening F&I managers, can actually make them better, according to an industry veteran who’s watched market setbacks roil the unprepared.
Read More →
Double the Change, Double the Chance
When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering.
Read More →
Just Do It
F&I managers need training, but instead of resisting application or expecting perfection, they should improve by simply acting on what they learn.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Leading with Purpose
In this video, Trent White explains how understanding your people’s 'why' is a key leadership responsibility of F&I professionals and how that mindset drives dealership engagement, trust and performance.
Read More →
Integrating Nontraditional F&I Products
The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.
Read More →
Trust Is Personal
Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.
Read More →