Asbury Automotive Group, one of the country’s largest automotive chains, had new vehicle sales increase 21 percent and used vehicle sales by 24 percent in the first quarter, leaving the Duluth-based company optimistic about the economy.
Asbury made $19.9 million overall in the first quarter, as compared to $7.4 million in the same quarter last year. However, the current figures include a $15.8 million after-tax gain for the sale of the company’s heavy truck business.
Earnings per share were 61 cents for the first quarter and 23 cents for the same period a year ago. Revenues increased 18 percent, to $1 billion, over the first quarter last year.
“Our results offer further evidence of recovery in the U.S. economy,” said Craig Monaghan, Asbury’s president and CEO. “It certainly feels like this trend is continuing.”
The sales increase came across the board, from pickup trucks to luxury cars, executive vice president and chief operating officer Michael Kearney said. He noted there has been a continuing recovery in the Florida market, in particular. Monaghan said small SUVs have been popular, and used cars have been “very hot” as customers look for lower price points.
The market is still dominated by the need-based buyer, not by people who simply want new cars, the Asbury executives said. Monaghan said customers are more willing to consider used cars, which retail for $12,000 less than new cars, on average.
At the peak, in 2006-2007, about 17 million cars were sold annually in the U.S., Monaghan said. During the recession, that dropped to 10 million cars. The pace has now risen to about 13 million vehicles annually.
“It feels good,” Monaghan said.
The company will see some negative impact from an expected slowdown in shipments of Japanese cars due to the earthquake and tsunami there. However, executives said Asbury is taking measures to find more used vehicles, and will price cars accordingly and move inventory if necessary. Monaghan said he expected any disruptions to be a short-term issue.
About the Author
