Net income doubled at Asbury Automotive Group Inc. in the fourth quarter of 2020, driven by strong gross profits on new- and used-vehicle sales along with its parts and service business.
The company reported an all-time record $89.1 million in net income during the recent quarter, up from $43.6 million in 2019. Asbury, the first public retailer to report fourth-quarter and full-year earnings, said total revenue of $2.2 billion marked an 18 percent increase from the same period the previous year.
Asbury CEO David Hult said in a statement Tuesday the fourth quarter was a "pivotal" time for the company, from the launch of its omnichannel retailing platform, Clicklane, and rollout of its five-year plan to reach $20 billion in revenue by 2025. Omnichannel retailing refers to offering a seamless buying experience to consumers whether they shop online, in-store or both. Asbury expects Clicklane to be in each of its stores by the end of the first quarter.
"On top of this, we posted the best quarterly results in our company's history," Hult said.
Adjusted net income of $86.2 million included pre-tax gains of $3.9 million on the sale of a Ford dealership and $600 million from a legal settlement. Asbury said in November that it sold Nalley Ford Sandy Springs in Atlanta to Jim Ellis Automotive Group.
Losses of $7.1 million for franchise rights impairments and a $600,000 real estate charge also were accounted for in the adjusted figure.
Limited inventory levels and strong customer demand supported profits at the nation's seventh-largest retailer in the final quarter of 2020.
Gross profit from new-vehicle sales surged 85 percent in the fourth quarter at the Duluth, Ga., retailer to $82.9 million. Gross profit from used-vehicle sales rose 27 percent to $39.2 million.
The average price of a new vehicle retailed at Asbury dealerships in the fourth quarter rose 14 percent compared with last year. The price of used cars rose 20 percent.
Parts and service gross profits rose 15 percent to $162.5 million.
Despite the results, Asbury shares fell 6.8 percent to $141.07 in midday trading.
Records: All-time records for quarterly earnings per share and full-year earnings per share.
Sales: New-vehicle sales gained 3.5 percent to 28,573 vehicles. Used-vehicle sales dipped 4 percent to 21,386 vehicles.
Same-store sales: New-vehicle sales on a same-store basis fell 5.7 percent to 24,491 vehicles. U.S. new light-vehicle sales across the industry fell 2.4 percent during the fourth quarter, according to the Automotive News Research & Data Center. Used-vehicle sales on a same-store basis dropped 8.8 percent to 18,551 vehicles.
Full-year
Net income for full-year 2020 of $254.4 million, a 38 percent increase. Total revenue slipped 1 percent to $7.1 billion. Asbury sold 95,165 new vehicles in 2020, down 9.6 percent from full-year 2019. Industry sales fell sharper in 2020, declining 14 percent. Used-vehicle sales of 80,537 were down 9.1 percent.
Asbury ranks No. 7 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 105,243 new vehicles in 2019.
