Asbury Completes Tekion Rollout as Profit Falls

The Tip Desk · November 8, 2026 · 4 min read

Third-quarter net income was $105 million, or $5.84 a share, and revenue was $4.4 billion.

Asbury Automotive Group, Inc. (ABG), one of the largest automotive retail and service companies in the U.S., reported third-quarter 2026 net income of $105 million, or $5.84 a share, down 29% from $147 million, or $7.52 a share, a year earlier. Adjusted net income, a non-GAAP measure, fell 21% to $111 million, or $6.16 a share, from $140 million, or $7.17 a share.

Revenue was $4.4 billion, down 8% from $4.80 billion. Gross profit was $732 million, with gross margin at 16.6%. Operating margin compressed 37 bps to 4.7% from 5.1%; adjusted operating margin fell 67 bps to 4.9% from 5.5%.

The Atlanta-based retailer said it completed a company-wide conversion to the Tekion dealership management system in mid-October after converting 47 stores in the third quarter, the most in any single quarter. President and Chief Executive Officer Dan Clara said every active store is now operating on Tekion and that the longest-tenured Tekion markets achieved customer pay gross profit up 7% and total parts and service gross profit up 5%. The company also completed a Total Care Auto rollout across all Asbury stores in October.

New-vehicle revenue was $2.29 billion, down 9% from $2.53 billion. New-vehicle units fell 9% to 43,736 from 48,070, with average selling price essentially unchanged at $52,427 versus $52,609. New-vehicle gross profit dropped 20% to $129 million from $161 million; new-vehicle gross margin compressed 74 bps to 5.6% from 6.4%, and average gross profit per unit fell 12% to $2,949 from $3,350.

Used retail revenue was $1.15 billion, down 6% from $1.23 billion. Used retail units fell 8% to 34,586 from 37,696 while average selling price rose 3% to $33,362 from $32,543. Used retail gross profit was $62 million, up 1% from $61.5 million; used retail gross profit per unit rose 10% to $1,788 from $1,631 and used retail gross margin expanded 35 bps to 5.4% from 5.0%. Used wholesale revenue fell 24% to $140 million from $186 million, and used wholesale gross profit swung to a $0.6 million loss from $3.8 million of profit.

Parts and service revenue was $644 million, down 2% from $659 million; parts and service gross profit fell 5% to $371 million from $389 million and gross margin compressed 141 bps to 57.6% from 59.0%. Finance and insurance, net revenue declined 9% to $183 million from $200 million; F&I per vehicle retailed was $2,176 versus $2,182. Front-end yield declined 3% to $4,612 from $4,776.

Selling, general and administrative expenses as a percentage of gross profit rose 284 bps to 68.5% from 65.7%; adjusted SG&A as a percentage of gross profit rose 319 bps to 67.4% from 64.2%.

Same-store revenue was $4.2 billion, down 6% from $4.49 billion; same-store gross profit fell 7% to $695 million from $750 million. Same-store new-vehicle revenue was $2.18 billion, down 8% from $2.38 billion; same-store new-vehicle units fell 8% to 41,825 from 45,685. Same-store used retail revenue was $1.09 billion, down 3% from $1.13 billion; same-store used retail units fell 6% to 33,013 from 35,071. Same-store parts and service revenue was $613 million, up 1% from $608 million; same-store parts and service gross profit fell 2% to $353 million from $361 million. Same-store F&I PVR was $2,177 versus $2,196 a year earlier. Same-store SG&A as a percentage of gross profit rose 349 bps to 68.2% from 64.7%; same-store operating margin was 4.7%.

Dealership segment operating income was $182 million versus $214 million a year earlier; Total Care Auto segment operating income was $21 million versus $20 million.

As of September 30, 2026, the company had cash, short-term investments and floorplan offset accounts of $210 million, which excludes $39 million of cash at Total Care Auto, Powered by Asbury, and availability under the used vehicle floorplan line and revolver of $821 million, for a total of $1.0 billion in liquidity. The transaction adjusted net leverage ratio was 3.5x at quarter end.

Year-to-date through September 30, 2026, the company repurchased approximately 1.35 million shares for $278 million. As of September 30, 2026, it had approximately $322 million remaining on its share repurchase authorization.

Adjusted net income for the quarter excluded, net of tax, $6 million of Tekion implementation expenses, $1 million of duplicative DMS-related expenses and $1 million of net gain on divestitures.