Asbury Automotive (ABG) 27 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Karen Reid	Britney treasure, Head of IR
David Hult	President and Chief Executive Officer
PJ Guido	Chief Financial Officer
Dan Clara	Senior Vice President of Operations
Rick Nelson	Stephens
John Murphy	Bank of America
Ryan Sigdahl	Craig Hallum Capital Group
Adam Jonas	Morgan Stanley
Rajat Gupta	JPMorgan
Stephanie Benjamin	Truist
Bret Jordan	Jefferies
David Whiston	Morningstar

Call transcript

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Operator

Ladies and gentlemen, good day and welcome to the Asbury Automotive Group First Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Karen Reid. Please go ahead.

Karen Reid

morning good and David, everyone. Thanks,

posted Earnings morning our today's As Executive engaging Participating press Financial issued for Head will available this Asbury that questions, of follow-up David first Guido, being open Reid, with is XXXX and Asbury's the our Investor The website Relations. me forward analysts with is will At available of later David I Automotive asburyauto.com. for new may and Chief for any to earlier and Operations. Clara, conclusion on at Quarter will President to our mentioned, community. up our be Welcome our Senior replay recorded afternoon. and release the today are was of we you questions be Vice Karen investor look have. call and Officer; our detailing Officer; call Hult, later and Treasurer, I'm results Call. Dan I Chief President quarter First Asbury's this and PJ our remarks,

must you Before we statements. the to contain remind is begin, that forward-looking during the call we today discussion likely

us, and semiconductor XX markets subject and shortage, these the products, statements suppliers, about those suggested relating potential well by of on business the expectations in are impacts those than customers, and including those as as and financial contemplated chip and nature, including business actual our shortage the industry and projections our significant from of pandemic statements growth. Forward-looking materially which forward-looking chip our differ results the All statements impact are are to statements the and vendors COVID other may duration and pandemic to partners. our financial the historical impact COVID-XX statements, on uncertainties the from performance,

Form XX-K that to today. information any our XX-Q, with for subsequently and filings quarterly issued any Form to our actual December responsibility earnings ended from time, the please time SEC We the year statements. update certain of results release cause XXXX, For disclaim to see including regarding forward-looking filed may on expressly risks differ, our reports the earlier

In certain call. discussed may as be non-GAAP defined addition, financial this under rules, on SEC measures

As required any of most to such provide comparable SEC financial on rules, we GAAP applicable by reconciliations the non-GAAP measures our website. directly measures

highlighting have We quarter asbury.com results. updated David? an pleasure on is our Hult. David hand website our to now It also presentation the call our posted investor to over my CEO, first

David Hult

Thank you, Karen.

earnings have on team. to excited call. first are you our quarter We to Welcome our

negative of the the in the COVID. the gross despite strong just have disruptions shortage continues XX XX.X%, $X.XX, first EPS face over days of chain a due February record helped basis with lower points prior of SAAR us year. up chip some prior of from deliver year. stayed reported result supply $X.XX markets EPS XXX% adjusted of managing strong also the an us The basis experience versus XXX impact gross quarter profit of to XX.X%, in improvement that Of point an several We've SG&A expenses, an in includes as storm last percentage resulting prior winter caused this close structural a note, and lows We year. recover expansion to of from along stores margin to supply disciplined in year demand damage. estimated versus in

Showing over quarter in in to year-over-year, signs and margin are XX%, total used road. total up revenue year. unit parts the F&I was Total segments. as service last expansion of and XX%, up past Our profit signs were up this quarter revenue returning recovery, with from new XX% saw of and parts while service up from up was for growth We the XX% drivers sales strong XX% both unit XX%. gross revenue was and were sales was up

remains Our balance cash to strong performance our due sheet flow. in

Our performance. X.X X.X%, maintain last deploying comments year, acquisition will adjusted to more times. at allow up will additional operating this pipeline leverage active level achieved of adjusted pro points quarter us strategically We ended business which a successfully capital. over by This forma and leverage net grow of discuss basis margin regarding XXX an and Clicklane, launched further. couple A Dan we our

conversations, is disciplined remain and engaged active it market acquisitions, are Regarding very our but approach. a we in in many

that confident sense are deals for find will make we Asbury. We

disciplined plan, while its we to forward, to allocating our on business focused returns. Looking our approach our operating we are year capital highest five continue and

every Finally, for year I our commitment the up to to guests. and operating a who now serving men company. delivered would the like to attitude Dan? women showed thank working you results positive our will a over past I call Dan Once hard with hand throughout the great performance. our discuss day again, all to and

Dan Clara

pertain you, will of remarks the good performance Thank David, to and our everyone. to first quarter My morning same compared XXXX. store

on market our are focused with [Phonetic] we Based on and gross being opportunistic current improving maximize inventory profit. to Looking at conditions, vehicles. new

from vehicle year the Our was XX% period. XX% gross segment down our our an vehicle our year in acquisition the luxury Factoring vehicle the days days, and per in total up was up from the prior end all-store average Park XX from or or was first new year. low driving the inventory XX All At of all-time new PVRs margins $XXX million Place, prior days $X,XXX prior $XXX of period. quarter the car revenue, per of our of were of supply March, XX% represented profit total up XXXX, significantly up XX%. new from at

expect the day XX to clear understanding below lack return no major due With we were inventory. days quarter the will of remain throughout the and when to year. normal that production brands to of levels, our supply the of the experienced challenges remainder during supply of Some low

Turning to used vehicles.

XXX margin gross from gross basis of up period, prior an average vehicle Our profit the point representing X.X%, was per $X,XXX.

up As was XX%. a of performance, our profit our result gross

year. on sourcing $XXX which at will generate XX from that million, March fair a represents We a ended the focused down supply, inventory vehicle used return. remain XX-day inventory Our prior days

Turning to F&I.

quarter. vehicle consistent vehicle from the a sustainable to vehicle retail $XXX growth an prior record and first increase increased per per $X,XXX strong first to our of F&I of In yield year per quarter quarter, Our the front-end delivered $X,XXX. in $XXX

Turning and parts service. to

and in increased X% with exceeding the quarter parts pre-COVID service March. revenue business Our numbers in

in We which five April. that on Clicklane, would continue In to omnichannel see this we a December, an trend omnichannel provide we began latest far And I more update now, initiatives. years strategy thus in to launched like ago. evolution than our is our

have stores all Clicklane We of completed rollout are in that to excited to the we quarter. announce this

and is allows values car online market, and which DocuSign, selling buying basically based include are unable of Clicklane exist than penny trading for a Features lead via online payment we accessories. parts consumer, fills collision finance lenders, a the real generators vehicle currently and and many insurance marketplace, products unique automotive perfect As and payoffs, the the which VIN-specific that to the documents experience. a online that transactional in-tool on retail tool, reminder, on loan now true to complete platforms transaction. and with to and and an just fully includes Clicklane It are customized taxes local sign complete more online gaps scheduler, to figures the loan fees, appointment added all service XX which a ability and

days. Credit have is home. Average in chose Clicklane some promising than launched F&I compared Clicklane were customers just take to higher all ten are that payment delivery trade. average scores end-to-end loan down less nine through to for to are approved averaging average are of stores. than than stores. in-store XX% a transactions double apply taken to of PVRs with we On initial stores, their had for Although when Clicklane. at average, PVR XX% retailed metrics in higher share. our turning customers compared XX% Clicklane stores. more is higher Nearly Trades are when through fully out through our a our of pay-off our Trades that on XX

would indicators. our focus field about discuss I teammates certainly now appreciation continued to call this for these the financial to to early to over opportunity continuous all to the the to hand take And performance. the in their excited on commitment experience, and perseverance. finally, our their I improvement, like PJ are PJ? guest of We will express

PJ Guido

financial Dan, I'd everyone. to morning Thank good yet like mark some which another company. and highlights provide you, for our quarter record

financial for quarter, release dated first of XX on performance the year. refer Gross outweigh continues gross our last I market than financial XXXX. the quarter expanded our to by by supply. points driven higher margin on additional to maximizing our last details XX% in our would to was to where Overall, demand XXth, focus compared a you today, profit For XX.X%, press supplement basis in revenue total April year,

SG&A We the on basis closures a as our percent points SG&A P&L, approximately of also decreased a have in stores. would the XXX XXX the been several resulted damage caused XX.X%. that impact few profit gross down in to we of that basis absent lower, markets to store by Moving expenses winter saw storm of and profit and estimate gross points Texas

quarter EPS of the diluted on $X.X totaling the out year income or settlements prior million estate increased up XXXX for Net income $X.X XXX% of And maintaining $X.XX last million, following -- of and million share. coming expenses above estate diluted of on $X.X XXX% XXX for same real in increased diluted adjusted share. for X.X%, income adjusted basis year. of an per resulted first legal first Our actions XXXX to charges $X.XX sales XXXX. points Gain share. our adjusted increase pre-tax or quarter pre-tax by first diluted million per control momentum the per and items. $X.XX related period million to $XX.X manage net or Gain gross of $XX.X the was period, versus share. record per quarter $X.XX items was the Net operating profit of or a real Adjusted up margin for adjusted

details adjustments, press reference specific please this on morning's XXXX release. For

XX.X% capital $X.X lower driven the With decreased approximately to respect and we interest million million and over was real the $XX levels inventory Our rate repaid lower we effective $XX estate tax store of by the quarter, on rates. first primarily year spent XX.X% debt. by in this compared for in quarter million deployed improvements to approximately quarter, Floor LIBOR quarter plan for expense prior XXXX. XXXX

the our below Also of at and position, ended a adjusted strong our approximately X.X comprised line and credit As balance a $XXX stood ratio and of well at forma facility. the used with result targeted of performance, of in times, availability plan quarter operational million our both on offset leverage range the floor of we cash end quarter, remains sheet our times. X.X accounts very pro revolving liquidity our leverage net

are worth emphasis Inventories to our a five look to opens economy an and we the as quarters. contribution what continued and $XX plan, year we management. remainder on of we service be are but expense likely up forward with bigger higher into only have did planning drive to remain but more, to flexible margin One SAAR Overall, parts we'll noting quarter XXXX, one low business. start. As a off to seen see will to are are With is conditions growth that still and and from we expect great QX, gross we million a to SG&A our opportunity the it shift environment, gross last we in the to regard business there nimble our margin. keep and similar as anticipate we few

across all and Clicklane our stores. Our up running platform is

was QX we Our for that building acquisition strong pursue active sense same-store an those in deals Asbury. the revenue to XX% most make sales a pipeline are and

concludes As remarks. teams on like time ensure five are tirelessly we we to also our how and continue In progress, during the year unprecedented our this to updates prepared to across success. we and This long-term will delivering. provide closing, the who regular business I current thank would plan work our

We turn questions. operator to the and call take will the Operator? over your now

Operator

Instructions] Thank you, Rick ladies Nelson gentlemen. question from and first with Our [Operator comes Stephens.

Rick Nelson

Thanks a morning. Good lot.

this? like you potential tight now, the to think can potentially you ratio days these because it an [inaudible] expense see sounds become expecting like inventory Do supply remain GPUs you to of here. So and And in maintain XX their here that even more at going where SG&A environment you're problematic.

David Hult

know -- It's all Eric, situation. fluid know, a we as fantastic question. David. a It's is this You

in month far than than forward in May, of at As today, cars the received to received April. we April more we inventory come anticipating But we're anticipated. sit here looking we we in less

and time a the strong much So, not unit what which to to as tough the what's what think we're and have month too receive from based have deliver we to chip we really get the to It's we're at going we going come. to margins on positioned shape fine what with perspective, we look confidence in going see upon it's need anticipate to I happen we hard and perceive could in we're what that, in keep now a ground shortage to pushed, and certainly really, knowing what's but mean May, we a beyond receiving also how but really beyond in May. as inventory April well.

Rick Nelson

that Are the Thanks are for looked have the more others, semiconductor spectrum? color, that shortage brands or David. those impacted than there by across how

Dan Clara

out Yes, listen, definitely the more every impacted, than some would every Good we're impacted ones is morning, Rick. say of there. but is Domestics brand This Dan. that other seeing I are

Rick Nelson

vehicles of you nowadays. do to internally I'm you. are you see the used curious on and what in and of sourcing the are proportion auction going you proportion what Thanks. auction on market the going Got what side house,

Dan Clara

Rick, another great question. Yeah,

in So as -- source cars are an over our come to the the be -- all continues at the auction in of at can scarce and you perspective, we trading imagine XX% availability is auction. time from high prices

Rick Nelson

for a was driving what's warranty parts service, just same-store differential differential that and service XX%. to and those and it PL outlook parts up quite Curious pay X%, drivers In two down customer I

David Hult

with The on David. some the did [Phonetic] blows and is and this going warranty, what's Rick, with have it recalls everything. brand

close to board, that and down do warranty, which pops read Import in continue the and much everywhere across that of luxury one So We're really year. domestic down that. is at customer I will up into mean kind don't about excited XX% probably the our pay you stores down in another had think it. when about to or We of throughout point closed February.

in And experiencing in of impacted here numbers. dramatically in ahead actually sit April, it March as same. were pace we're not so but strong, only came we service. with parts So back February, sales was 'XX the we and

always So, service collision had is now collision business the the back, We back. customers laddering well. the road, and as back are back coming on a is

we're with some go And with So touch Dan up the Service on inventory, coming picking shortages while is variable the just trades. said side that. used feeling with to it back about what Parts cars acquisitions and XX% on and on thankfully from and

drive is other Our lease our from the car loaner consumers vehicles buying resources within and directly off service from manufacturers, fleet. certainly

quickly a day the that certainly supply it. -- great but think and margins we one creating we're a got with we So tight it's inventory turns

Rick Nelson

would I in sneak And more April. like Great. about here to one

they You sales how talked about be continuing the inventory challenges, to do look and GPUs. Are elevated?

David Hult

first we you've Yeah, just results, we're in that well. as the today experiencing what here seen sit April quarter as in

Rick Nelson

Thanks luck. and good lot, Great. a

David Hult

you. Thank

Operator

you. Thank

Our Bank question John from comes America. with of next Murphy

John Murphy

fast. being want. really around you able kind of of to think done extent, or question just level Good of at that and industry but faster inventory, start we as what you the you you, job impact And hasn't well and think deliver morning, on What on the [indecipherable] on rest guys. inventory to had dogs really now looking been vehicles on as negative. into some constraints side, a in major great a all are consumer a it worked point -- significant know unattractive I short vehicles on you've a inventory it's just the sales, what you inventory they had and I'm tendered just supply also sit mean, first not running in selling turning have a I lot hot has out industry of these if curious it turning inventory. we're and often that the inventory

David Hult

next over fluid it's long runway don't question. situation such It's a great a the what's days again and you look coming. a XX to have And

to I'm based here So that my make today. comments are sitting on going

receive that the we that you get need unit Our to would is to May that almost tell in in we we we're perception received we April. the going new struggle inventory if today, the to. receive to in sales April, to here received double inventory May same can get in levels we sitting I

confident So, assuming going sitting May receive that to where and told we're but we with were we're the to in insight we we're at April receive. point, no June we're this confident production

OEMs it relates shortage the this. they've really at selling you great selling really products the And their shifting the is there, as are hot faster to chip while vehicles. As point production the to, been to

So very it's and your light to point demand Because going quickly. I soon. sure some The people pent-up is the that everyone's the with about is dogs there, really there from on pretty now moving of as few But coming it's sit can is I'm side also see which anytime a out see then. every down is be demand can't and in obviously, very you it's well. margins, high, inventory a slowing fleet it the and benefiting to back strays

John Murphy

Yeah, pretty encouraging. it's

question, Okay. you even a mention And but was Place then it just obviously the Park second big acquisition, much guys quarter. in didn't

it going curious the sounds it. very about no integration noise Just smoothly because there's is

appears targeting And that's that that you've get almost almost aggressive Could a your mean plan. and number basis, annual more even talking to your peers over there year to at going mean, of aggressive be an than opportunity that are five a target on larger so got or basis. mean I good get an I sign. more some billion about that is acquisitions? doing kind you on So given well, I on annual the what of moment? $X you're

David Hult

at is question, really but The the from in meaning for the Place Park up on but long-term go more, I'll largest I who and the want acquisition that and general John, standpoint, a senior that Park crown a we things look touch was a we thought we professionals it standpoint to quick. the team Asbury's care the us real business and at there, it mean and run. managers, it's relationships the and from runs setting The history jewel great a Place smoothly, we're Yeah, we dollar sure there looking industry. as communication to takes lot of everything automotive be. make have

seeing it very, to total there kind and compared in So excited same-store. what very we're shows the our of numbers

So is acquisition is at the point. going to and great relationship and transition that'll progress great this continue

their COVID off the relates now. that conversations had price been to more what with is in we than one based going never we've I've have time it acquisitions, As numbers. month, the in discipline company, on Everyone there numbers to be the shareholders' common acquisition best buy COVID I based and every don't to interest think on that that's has of the sense and some numbers.

while because we structure going to thing with equity. So the go want need feel right not the it's long shareholders' acquire game to to now, about the things the doing our and outside right we're

haven't So we'll will know meaningful deals really of announced that the to really revenue deals revenue. We it's looked we're that we come the when a There multiples ten And earnings We We like very now. acquiring stay want aren't at, years our into not way. company at disciplined. but we're sure the any now. time conversations just from are for lot in not in moment just a we're make that being five, and buying for is high.

John Murphy

share tell us you metrics your may with all reach because were sort transaction consumer. and extension in days mean with kind the be the seeing of your what very you even last weave gains the reach or ease if question is which that, what early in of for some existing then giving market markets you that And curious can of of of quickly kind Okay. you together that, But kind that helpful. gave geographic of us I

David Hult

XX%, of tool. but the seeing quarter. really mind, making normal really push With used I have. last obviously a don't the is split company store the advantage now. with side, customers the rolled with it XX% really we on import XX%, side that a were in shipping stores We're It's low out I on seeing a business It's seeing we're advantage their seeing has think inventory never for with we week looking somewhat domestic every hurting you is keep start, domestic customers a And XX/Xo the sales think right of it, XX% did before. the Sure. little which day We're it of were what But customers transactions the some now take take purchase We're of luxury used, in well people a new. of as question. really the difficult, the in great about certainly you lot that vehicles. vehicles. supply new to and tool, we're with bit And right can't but acquiring lot and

to tool. transactional struggling I metrics focus on, Most lot of to are not think and subprime the tools the lead key a a seeing to really it's people's get generation financing. are

far can't is in being These cars Clicklane says than are online, Clicklane that the average a started. people buying compared strong Nine I Our consumer home. of financed. enough, average. put with emphasize Double very ten vehicles trading taking credit so just to of And are are them out these down higher metric the it's score strong pay-offs creditworthy cash getting people at store on delivery in-store. and

well. a we're transactional tool, lead the piece a So this Dallas not And we I at store we've really only a a And over growing first of build the of which space puts generation, Accessories incrementally full Parts tool. on seat us going it believe we the tool, in for sale, now said, transactional like end launched to the have as already the quarter, the to not and this full in launched is time. driver's

seeing. we're to get every share it's we're we're tool quarter promising. each better very going So with to continue what month. continue this going the and certainly to But very, to innovate information And every we'll and

John Murphy

on if follow-up And can David, I that. sorry,

reach Which build acquisitions some digital we How Clicklane a do gain conversely leverage digital argue make that overlay I acquisition could [inaudible]. national you to any so strategy, to greater and you approach you the this need really need market do are your way think not it that that overlay. might means about if is arguing as network much you you you a the farther So mean marriage that to can and you of the way, think two? share or have

David Hult

John, an perspective transaction and this it's and is is and a from question, than one mountain, delivery. before supply again. brick used excellent And climb used to expensive. online, it's but mortar the happens then more so it's permanent example if Hey, really I've a way there our look is just I it chain

in chose city don't As marketing start create we we Clicklane, Carvana sit today, Phoenix much put within we than no of here to have that would currently we what doing Phoenix. If any start numbers currently with stores doing population without brick than a SG&A the higher and ring which and around million could that mortar. differently X.X we're marketplace, transactions

do will out the and to segment we to business of vehicles every the we markets, around, have but our our we tool because to to So market country. in have ability in each of build do continue move be not we that absolutely believe

John Murphy

Okay. much. That's incredibly thank helpful, you very

David Hult

you. Thank

Operator

you. Thank

Sigdahl from comes with Hallum question the next Craig Our Ryan Capital Group.

Ryan Sigdahl

morning, my thanks taking Good questions. for guys,

David Hult

Good morning.

Ryan Sigdahl

one follow-up on quick Just Clicklane.

or the looking Asbury similar side you any in seems consolidate future. looking at run website, Curious also side to if at if at by those websites very to kind the plan So website, between plan of Clicklane you two. the point there

David Hult

Sure, Ryan.

OEMs the websites. the vendors for with franchise require our certain use to all a us stores, As reminder,

upon purchase When depending car, certainly and the back be to accessory ways. stores grow it [inaudible different stick piece, put I launch because the will market in of vehicle it talked the end didn't not, the we grow, actually will to in in want have and to whether we have we policies. in Clicklane. franchise to people we of So during a about distraction parts or those accessorizing the that it the and Clicklane continue

That's the documents, end ability collision. vehicle back for their after have we accessorize access and So the DocuSign the of consumer where they to they service well. to and the parts as tool purchases have it the them PDF and

tool. we a out a with where we marketplace it. market a we get ways the tool now and the full do to done ease And it long this able and there there see We're lending a word us. So the of have doing to need product out only pay-offs, to we right at the just have are from is transactional innovating to first roadmap. in go we with scale think But one and our business now consumers competitive not and we the the being being advantage

Ryan Sigdahl

you stronger the then used used now think will that's on the new Do a Clicklane. time you mentioned availability inventory as you is And versus Great. or it used over think right mix, of do far the goes? side function online on higher purely stay as mix

David Hult

far believe there double second actually often, to these has year every Yeah. to stores is we're we excellent say. question. us none, actual higher and and and were your someone Start it's for way space to become when vehicle we the is and more out be is used, that seeing on results, to It's as been with space, We're the believe and well. transparency going the any still years. numbers selling XX% not. are I XX% what the kind the their to whether inventories other to as factor than F&I mean, It's convenience promising. an Push selling extremely very hard differently new, comfortable compared tool Rovers as no would transact are consumers hard Clicklane of promising. that XX-XX to more tool get close judge craving $XXX,XXX Land on for per to low in pre-owned or that It's way because to We as the And technology

Ryan Sigdahl

quantified can there you was you closures in there, and me, mentioned from is same-store one Texas quantify to Last EPS sales? impact way what the impact for the weather you a

PJ. Guido

in Place Crown McDavid our our for Group Indiana closed for also The And roughly full our Park Yeah, full evenly impact were of our week. our sales Group, impact. closed in Plaza profit Dealer a group were service and is Groups Texas, estimated PJ. million at stores We $X -- sure. to in split the Ryan, growth total between this stores nearly a and day. gross

estimate So impact profit gross the on again, million. $X of that we at total

of also in addition of our stores. In roughly Plano worth that, $X we stores had [indecipherable] to our two Lexus Texas, million damage to

the time that. for And associates markets expense then associated in did pay we incurred So all were for that stores with closed. our a lastly, the we those the guarantee

it $XXX,XXX an was compensation approximately that So expense. of additional

Ryan Sigdahl

good Great, guys, luck. thanks

David Hult

you. Thank

Operator

Thank you.

question Our Jonas comes from Stanley. next Morgan Adam with

Adam Jonas

so think said you your home around Is Is hone preferred Thanks I where great. really -- that delivery. that over you said? XX% KPIs or wanted those to on Clicklane, you everybody. chose Hey -- much that's in said I for one correct? over

David Hult

correct. Yes,

Adam Jonas

Okay. Can quarter? that in us units tell was you many how the

David Hult

at Adam, this -- that we [indecipherable] number not tell Yeah, sit is road, we're every because but that again, can as point growing went it XX week. you came here, off stores the the I doing disclosing

Adam Jonas

So, no we the for KPIs start and and stuff, -- are your with stuff the that are going it's the consistent. slide when slide seeing looking in deck of is because were course, the that I'm important to KPIs there great, and all

thing deck. after, whole do and transcripts we on is talk it but nice obviously it's you dog and can and the check the the pony So with if

digital so seeing tracking start eventually and formal we can some Just year-on-year? we going then more to start comps are unit track sequentially when feedback, that volume we can

David Hult

see to Yeah. wanting I in passion appreciate your numbers. the

quarter week As of we last launched the last were I said the quarter. stores the in or --

be let's to talking and much So belt it about quarter full we'll well, under every I our think don't say, a it's quarter. get too

share certainly information. happy we'll to [indiscernible] that by, So be

Adam Jonas

guys consumer companies of with actuary do see Last the then Thanks. sense you are do David. to the that. become cars if explore agent has themselves. part eye -- are the going OnStar, the of on not where eventually from even I'm And to just make do you affecting Auto cutting of yeah, you makes OEMs does digital and that. How kind that and to insurance. insurance been of part to that starting me. parasitic I'm more see Do of do one GM Thanks, legacy wondering starting to Tesla, that is and auto kind with if think start sense you what -- of this partners partners saying -- out folks -- think that retailing, then of third-party insurance mainly using expression but themselves with because your the role going F&I. that. and and that direct of

David Hult

be excellent things assume innovation, working an about I insurance too people don't and business XX, years within dealership excellent on would point, details mean It's into want talk down it's But -- everything I this available think the and have want location. for this in don't logical it's I want It's at get shopping really one-stop logical at one So much it's altogether. XX point. any question an we're to to natural but it really be only that road other to locations. but to to I refer that

Adam Jonas

question. Thanks, Appreciate that part it. Alright. David. of Well, the answers

Operator

you. Thank

from next question comes JPMorgan. Our Rajat with Gupta

Rajat Gupta

on Good had question. just I growth. morning, vehicle a unit the thanks question the for taking used

obviously you of with the relatedly do and reported You And of be lagging, then two even the and talked satisfied basis, you you Thanks. about to Do or two Are vehicles that on year of business mix performance the close the there? I that some overall the something year-over-year am recently. seems still think just growth like there three for the profit $X million more sourcing impact that a could suggest points on terms gross strong overall you're that? to but I to had selling grow peers follow-up. company. of pretty mean I is in unit faster, a numbers have impact,

David Hult

to performing than of we're fair not pre-owned. more at No, the level an to about PJ talked Yeah. question. quantify, It's close hard some we should not excellent they we're physically and with it's for week, It's say satisfied the were literally you we closed hyper down know and down of while closed closed stores that XX% markets a they after. storms closed. before had but our And were the

answer we're of I range performing pre-owned. the area the we every all volume, closed other we're So your not that holding for but stores had in to category, it's to were time But in at somewhere looking it's of just We think effect is periods us, need business, need X% would probably really for question going. and to that and an own, fair markets at more get our this to think point. the to really opportunity guess say on than the a at we to level it's the simplistically, in hard be quantify, to X% it with some

Rajat Gupta

last That's a or gross M&A like helpful. We these like talked tailwinds you for margin mid environment. -- could about I XXXX. appropriate probably year is the looks later unreasonable maybe, on multiple follow-up it. another it Got M&A really there and or like not market. the And just the -- and probably earnings know, now right mean, XXXX in

to you that make the when because already deploying So since months do decision the six it's start finally, been capital plan. you announced

know, and look will be You a XX now earnings from still elevated. it might year months

the continue the So, on like then. make and cash right or toward time then Yeah. your Thanks. I would sheet understand to the sit now -- to capital balance trying plan? to deployed on finally that just would work might you mean And how be when that to year decision be five

PJ. Guido

Hey, Rajat, it's PJ.

to and then we when multiples We the the deliver to achieve, EBITDA we at we've before, we looking to it at our a an think and in off see as approach then maybe in our And since -- hand announced it's deal. we then we're start accretive opportunity, to synergies look there been an we're relative I'll can acquisitions. we need IRR plan margin And in David. look and evaluate So But capital. months -- very do disciplined we three of December. said we to the cost actually factoring

So deal by on evaluating we deals, basis. deal it's a are

to for at continue but deals on most sense fill to only pipeline we're the going that Asbury. or we'll those the look And make so execute

David Hult

about XXXX, a to on XXXX, points. you making it I'll they brand dealer difficult. And million has what $X than started and follow-up multiple want million at and a $XX then just the higher the to they that's And prior look $XX work to makes they want that two When COVID off in and annually. talk was million making ever run. That

going But While I statement. space opinion, about for think to next person's one and this and isn't forward-looking going 'XX and year, be you you the of country is the it's a to again have be to this with margins 'XX, on be are where is market, agree way demand at supply that that is where the and the to the going going EVs in amount infrastructure mix. for time, to and the that

I a to in what few So can is to really trend come see year. think years all caught as And at have have which launched going we'll no and what you we talked the hype of that doesn't is value and the just time it don't look in buying moment out to $X billion the to $X up the about doesn't you be. we doubt a in that plan, to when five one year be -- have billion year hit get it,

We've acquisitions to highs have been we employed There I've disciplined. be and talking have doing We time, to always is this been today I've years. been since We're automotive long for in XX lows. a ever than more here.

nervous were having run be judged did company, should revenue then over I but long and [Phonetic] buying we in I time. things energy think happen, by the acquisitions accretive be just that So for performance with and struggling of they instead we may the will think how the

Rajat Gupta

really quarter. replacing to and what you Clicklane. but if it. you did I would And I'm been know grown for out helpful. for got not don't had give just it one, want it have not you That's the last just contributed following volumes one. on Thanks. One than like it, one Got to the Clicklane, slower up numbers, just curious in incremental first unit

David Hult

group can't in I has they full tool a transactional have and this and we had few all that their -- two it stores enough, No, XX December, it's stores, pilot question. on an this stores in out essentially excellent half rolled in we so public And really stress only nor a months. it we no other

all out, efficiently make a that we weren't know are, incremental to and I really not number it was with was roll everything rolled grows just really where But haven't and start a that perfect the that different and working it's And them marketing, stores. last lot in stores you're I week over sure about not now. many made that know the what it's plug can when when working. But at making before. out So I -- hit we discipline and transactions codes there's our different week every little marketing you have play because we tool. sure doing and just stride numbers on correctly, adding the tax a the right. make growing crazy We the you XX And quarter, looking tool, business sounds sales There received, mean, it's with is the week three just think adding the is number. of you're you sure comment, the would of are it's of want information counties in and time I software. material protect it bit so weeks it and to to we everything tell the single properly,

it's hard encouraging in of to our it beat information delivery us didn't happen push I'm won't great there is And the pilot perspective. it's very there's XX with we're people if want holding true. quoted be transaction as minutes. And the coming, the COVID pay-off last have not change stores a for home. it X a tool and a paying that [indecipherable] start. but kind not time to cash are from time, to heat That sharing still And of It's of minute invite don't XX% It's we just people it's over experience. taking with the in You needed time. it's and what saying at financing is

excited credit also a with Clicklane seeing very we're about what we're compared higher push seeing. So to We're score start.

sales, every most type unit it on and person detail it's great quarter, the tool very, promise is that but it talk So in encouraging. I just not to transacting us. it's encouraging the we'll the very it's using about of And that's

Rajat Gupta

the Got sense. Thanks good color, it, it. all Makes got and for luck.

David Hult

Absolutely. Thank you.

Operator

Thank you.

Our next question Truist. with Stephanie from comes Benjamin

Stephanie Benjamin

Hi, good morning.

David Hult

Good morning.

Stephanie Benjamin

this to out Clicklane. pretty, we pretty a of quarter. color roll additional this all I your really But large that the given was -- understand the task stores that all -- Just to it appreciate question you've on

we you look out name of some move step expect there get markets. kind store also that should on should we something options a customers maybe so only So how up about or we a to -- there -- of local incremental what should expect kind a through little are. should in advertising more Is of the just the as but kind think not just year? their we of any Is bit in know your as investments level

David Hult

Yes, great a depending traffic of counts allocated the it's unit end the we by question. upon the Stephanie, we've sales year and density of spread and population. and market between Yes, now several dollars dollars million and

April, should or it's quarter with incrementally we're what We every growing our sitting Now here it's think I to fourth out the may But that things coming stress inventories, third we're but again, too say, us. And predict from today we that like an have and inventory marketing upon that can't July some going week happens enough, look I sitting what week plan talking our interesting in help standpoint. change in data. will the first week. to about to get the things depending is and intent is numbers out are hard here what there. August

it's through leave than an a noteworthy. is a other So they very right This also the transaction and starting talk And there back stuck over. We're it And the -- a so out lot in send this them ability or to the And ability when the right as a are to built a that means future in of that no excited it start they're stress in at platform. time. sticks the there tools is is people this there is to link the I is about getting if or they the moment if lot walk what chat we're the of tool to on other tool different comes. now. issue enough, really can't were market hoping there marketing that where was the

as the conquest the sale share sale through we'll very when we it's and accumulate on they tool, the sale bringing well. also So incremental the And just we're whole and it's KPI. hyper-focused recovering follow all the not but And certainly up tracking go that or more, as back. the them

Stephanie Benjamin

your up speak an in Phoenix will Absolutely. as to When or going the And new markets with these of existing follow of as some market example you well investments advertising you to to be advertising, to incremental then mentioned just entering that also that. maybe on just you kind is look a investments. or

David Hult

Sure, this. say Stephanie, I'll

business business. do to Our time do will will in That we be don't it but product currently where in is I specifics, be in. this test markets start intent soon really don't short that fact. we want talking we don't experiment to about markets the in

Stephanie Benjamin

And market mentioned you've it's lastly for now. acquisitions, then a pretty it. just that Got right me, apparent it's active on -- and pretty that

appealing luxury, geography. what you're just just on more expand the you're new of think really to at a most this opportunities. all brand up Has that mean, looking or just really couldn't come past late. kind to I'm at -- concentration we as M&A consider trying in in changed looking May bit if the at those I you're terms maybe of little if stage? in have what's So to gauge you past, targeting environment of so as your I curious

David Hult

paid later lot years conversations and Brand brand years pick country than the just go. they wanted Place. are a strengths just where this. that a And great having we for think balanced a and Stephanie. conversation. hotter down a and same it's we parts portfolio. doing No, of deal XX I'll had of Park in it's Park question, a After come dealers Again, luxury Place brands I of multiple other about really Certain doing the heck slow

not. Michigan you friendly each talking, state, If you're or luxury seasonality laws brand, brand, or Florida, the have population, of though different, franchise the within whether even it's the the of because business, multiple business California, one same state density individual or are different is Massachusetts, Texas

think where we someone what had wouldn't why for same looking them within at a with law this said for we within pricing. how state XX one proper So laws. lot Texas. spend each do when a and of acquisition really it's I with I Park recently I offer paid the we us. asking return that sits the looking miles, state franchise mean, don't factor we franchise individual market in Place it's you're no time and it as a just else simplistically just I've I conversation not at If it's different different a and five miles, is another know that franchise the you market in has mean, don't this

Stephanie Benjamin

the Absolutely. additional really I color all helpful. today. That's Well, appreciate

David Hult

Thank you.

Operator

you. Thank

Bret question with next Jefferies. Jordan Our comes from

Bret Jordan

already, this asked, you about segment Well, particular questions pay. quarter have but in our guess Mark on have parts Jordan April on is there. thinking and good lot service may the the both accelerate them talk you about Bret. questions morning, to already two of throughout how trended touched I and for I Can a quick and many continued have customer you're it Good but have kind if and trends seeing what through of been

David Hult

to January pretty promising stable. would was come to and call call flat. pre-COVID I wasn't being close It would continuing I it Sure. quite it back but and numbers,

We're we ahead for of think numbers a were that 'XX. We the lot anticipate customer here pent-up the result of we to demand. anything a was pay, of March played in pre-COVID Just weather but the full call April, by forward, same numbers, step year. back, really just think of all because than February and the and varied it the market February to to out, I'll more way it I back around and that sit rest there's but as specifically because else acceleration seeing going was weather, do

back. I the Now, I if I being what that back, people back, is don't work if It at something on road, warranty saying, happens I'm comment back that. mean pay down, is can't just comes customer in the is do on anything. it's business as I are the fall, Warranty my it you earlier, in virus needed. is, obviously look comments the said collision business the is not can't

reactionary So that's just thing. a

Bret Jordan

increasing if from from so, competitive more given thinking attractive in customers, might trade-ins to terms unit would May vehicles to of and And right and Are right channel? might high is very it directly vehicles volume. you competitors seems down competition shift Okay, now, sourcing be you then say having kind the be same great. is that purchasing how of for channel like sourcing used now

David Hult

It's trades in the upon prior, selling still But still because right a not be an should excellent less standpoint, of the -- We're different amount question. based we're we're we're taking the from selling levels. always now. we volume it's taking selling cars demand we're we in just percentage trades did

have avenues seek of lot avenues not it's lot -- We sellers real are a an there the having kind dried residential out some of market. estate buyers there a out up. I of to mean there. and lot awful is of and other like of those There's there's

more inventory. you are Manheim difficult So what's it going anytime certainly especially new with for little getting you that see soon, out. it's the change comes certainly know and comment don't the to see or to want bit to in add going it the up with a People that, that's paying or? at auctions Dan that think car don't on I We if that inventory. Dan data

Dan Clara

it covered well, think I David. No, you

Bret Jordan

much for Okay, great, thank my questions. taking you very

David Hult

you. Thank

Operator

Thank you.

is Whiston here Morningstar. Our David last question with

David Whiston

you it how pricing a Thanks, is giving are you bad -- inventory I a good now morning. risk up the lot some more, Do you guys where power you want enjoying? -- stay even? little or at guys of it guess can your Do higher or did of more, want

David Hult

there inventory the more sudden and good really over XX all high question. well sell, had. truck to would going showing everyone problem great didn't ask. And There we such what won't the great, supply demand is so the in The lot at trucks. Yeah, performs question exist better, XX everyone high that's a the much smiling and the to listen, the days is We I a didn't margins. the greedy it's people we're and everyone that sales missing out, be than simplistically inventory. to is demand. was going to looks it's us coming is, that tell supply right probably just with lot look quarter. where Domestic stability because you David, when a -- wanted of you the Yeah, now point have here, you're of brutal fair it's inventory the a all and we on demand. industry now, in fear we numbers, have We there's reporting don't a I get and that's is all is a market. for -- down match government were in right spending and to be mean, the because

David Whiston

what you have buying buying inventory. customers it happens when vehicle, And really on you Does tell a to just now new vehicle, coming due [Phonetic] buying a used the Okay. don't in [inaudible] a -- particular to or set new new on that vehicle, have intent another customer them

Dan Clara

Dan. Hi, good morning, David. This is

lot for of a a more lack in better cases even really become we on a efficient term. So a have taking of pre-order

pre-delivery lot perhaps transportation. the the we're is delivery. already a actually going on out trucking being detailed inspection, lot a cars right by and company for unit, that of in our and or In coming being of income So is the they're cases getting car in seeing that an that are delivered built for

a can that additional and where or tell of giving a lot at on in taking we were considered little the have flexible I cases a that particular model, package customers are that availability -- maybe they more beginning. bit don't just package particular of of So not maybe

David Whiston

all, at rise your or over in brand at pay Toyota their customers, and Tesla to Group especially particular you is shifting Park model your the I'm to premium in just Y. curious do stores And the any that Okay. Honda wanting of Bitcoin? Place have hurting

David Hult

us answer from a No, point felt not no. had really yet, to Bitcoin not all competitive the this come at strong Tesla. with yet, to point, and a your consumers request no, Haven't haven't questions,

of come the not country, lot player a I but sales it's from a currently of California other in. the we certainly their dominant markets in transact and think real parts

David Whiston

just PJ appreciate or quick. And That's Okay. where booked GAAP? real just they The the for detail. Karen, for I were items, helpful. special three

Dan Clara

They're booked in other income, David.

David Whiston

guys. all thanks Okay, right,

David Hult

discussion. your participation forward very look next much. it. great all and quarter. the today's in you We with Thank concludes day. we to Appreciate Have appreciate you speaking This a

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