ABG - Earnings call transcript Q2 2021 | Asbury Automotive Group, Inc.

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Operator

Good day and welcome to the Asbury Automotive Group Q2 2021 Earnings Conference Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Karen Reid, Vice President and Treasurer. Please go ahead.

Karen Reid

Thanks, operator and good morning everyone.

call later recorded this today's available will noted, replay for afternoon. she is and being be As Welcome to Asbury call. Automotive Group's second quarter XXXX earnings press posted second this Asbury's asburyauto.com. release was The earlier issued quarter morning our on results it's website at and detailing are me our Hult, and today Executive President of President Senior Clara, our Participating Vice Chief Operations. Officer; David with and Dan have. available At that questions and for up the the call questions conclusion of follow-up will our later be remarks, you any we may will open for I

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

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

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

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

financial over our an quarter now any the rules, reconciliations David? Investor the of second call measures to posted presentation directly my our our CEO also GAAP website. results. to applicable we comparable updated Hult. highlighting It by asburyauto.com our pleasure such SEC required hand on measures to on website, As We've most provide David non-GAAP is

David Hult

our shortage. Thank this the our everyone. we've an from adjusted good In reported continues prior due of Welcome release the earnings in disruptions over you, call. up a second $X.XX, enabled to SAAR earnings year year. basis challenging and morning, recover environment supply to execution to gross XX.X%, of the year. XXX% deliver record, of prior Karen, morning, us all-time second a chip points despite an quarter EPS the This XXX macro strong lows versus face margin of quarter last expansion strong to

SG&A a also profit We year. have in as managing gross basis improvement percentage point of resulting XX.X% of and stayed expenses, XXX prior disciplined in versus

Our up total quarter profit and up was revenue XXX%. gross was for total year-over-year, XX% the

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

this at X.X Our net quarter leverage times. ended

quick year digits We Same-store for assuming revenue pursuing A Place Park five are in as double revenue a to aggressively and growth. for are on deploy we strategic expectations. growth, opportunities XXXX six is is announced plan, our and perfect capital up position exceeding update months since. annualized

unit our our plan. Regarding are Clicklane, of sales ahead pacing

million we under LOI about in acquisitions, now. Regarding revenue $XXX have right

opportunities other over in reviewing $X also We totaling billion are revenue.

revenue $X We in in of are our over five goal confident next years. billion the

With our on execution confidence maintain these we strategy. in trending results, growth full our

to five plan. on continue quarterly year will provide updates We our

Dan most on to Their to the our all focused like our is hard company. to passion over automotive centric to Finally, are Dan? performance, who journey and I you. now our hand I'd guest to thank the inspiring. in discuss serve operating Thank the men women company, call retail will working become

Dan Clara

the in XXXX you, performance applicable, and to and second of Thank everyone. same-store good stores My comparable otherwise. unless to David, morning our when will pertain XXXX remarks stated compared quarter

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

period. million, per down Our and $X,XXX period. $XXX of from prior supply end XX% vehicle inventory at our segment prior was day the up total XX average year. XX from the was year was low, an June, new up gross significantly the near margins days all-time the vehicle were year profit All At or prior from of $X,XXX our days,

inventory. to throughout Some supply normal Turning of to were remainder stores clear due used of return of at the to production day the the our the quarter, we lack understanding levels, challenges expect days' to that experienced when remain five as during low will major supply no year, vehicles. of we With

the average XX%, from used Our up profit was prior an retail vehicle gross margin basis representing per $X,XXX. while XXX gross volume points year, XX% increased of

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

XX Our of from represents days' quarter days focused supply, year. on We inventory $XXX generate return. used that the the vehicle up a will XX inventory prior sourcing which fair million, remain ended

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

and Turning parts to service.

XX% margin of on XXX a and points. comparable I would basis to service XX.X% increased quarter, XX% to like was our store about XXXX basis. performance compared revenue the of increased second gross a comments and up in profit Our additional make the parts quarter total couple fix

initiatives. up on Parts focusing started yield an up XX%, pay gross and XXX%, were our increased up XX%. profit to several Front-end were per $X,XXX profit and omnichannel XX%. was or increased revenue vehicle on unit omnichannel I per we gross initiatives. now, $XXX strategically or retail service X%. F&I XXXX, used increased And provide retailed like In customer unit update XX%, would retail sales used vehicle sales profit retail up New vehicle gross XX%, new was

our those of One increased visitors marketing to over an traffic by dealership of over consumers, X increase is our of initiatives efforts websites Through organic website organic traffic. our digital XXXX, to since QX increase X,XXX%. million sophisticated unique has

XXX% appointments. and and strategy XXXX, record. service active an bookings increase increase per which appointments, achieved dealerships omnichannel quarter. of course, We evolution of in the the over of fully in QX at service to repair dollars all-time our positively our online is impacts retention This service online initiative XXX,XXX Another all over component order. for of was complete Clicklane, increases latest And the an

We've with for I a and the carriers. seamless and intuitive to that competitive our appointment a convenience go Clicklane recently out over all with one-stop DocuSign, from unique provide payoffs, documents insurance that of to accepting guests our transparency purchase approved as service for competitive their with as executed of loan remind providing retrieves our documents you experience from Salty complete dozen partner personalized an with The an our sign car highlight online include guests with we Penny by to consumers needs. benefit XX Clicklane large loan platform customers Clicklane. that over a deliver I to scheduler, quotes lenders perfect X shopping national embedded million which policy ecosystem as custom that ability insurance is via than insurance lenders, relationship. a Salty features the premium a over Through and towards enhancements, loan want provides well a guests metrics, buying XX parts includes apply as evolving policies in are recent as and our the our every partnership we each in the to carriers via and commission Asbury now Salty, as year. the customers wants consumers average, tailored Before any the guest of policy, insurance needs on build a provide well. originates. of are Clicklane, in-tool on experience of strengthening major constantly with tool and to well XX receive more from $XXX In-tool quote ability spend accessories additional for through now auto DocuSign. that collision a marketplace

enhance We tool visualization to also to within Clicklane. and our partnered enable with Insignia accessories

These vehicles vehicle Asbury customers real third-parties the on Clicklane add offset new visualize in their to their point often the their customers integration end customers of accessories allows at choice back their after to accessories account. This time. to fully purchase. allows looked enhancement of in of

like and share at our performance Now, of were Clicklane full Of new stores we through XX% vehicle under some metrics. our would XX% them were to with quarter vehicles sold used. a belt, all

of push XX% a our reminder, vehicles. used were with sales As start

least XX% from to average used $X,XXX, of We transactions vehicles Average were of of taken new transaction is used time with for first through $XX,XXX, expect Clicklane our F&I is the at vehicles minutes volume through customers cash of than taken score quarter. home, our car over deals. increase turning credit credit and this through dealership double the for by and XX,XXX our XX XX% score than customers Trades at quarter that Trades year at car deals $X,XXX, more of Clicklane eight is than end. XX% of store Average of an Average store averaging were chose annualized PVR take delivery are XX% average new network. PVR vehicles finance front-end Clicklane customers the our for average to Asbury's for more XX minutes Average down payment is down higher new in times of of $X,XXX. four stores. average days. payment $X,XXX. on $X,XXX. are

for rates is As opportunity a would targets. of finally, excited Clicklane to this I field commitment continued to quite converting striking call are are I of on now all far discuss their of take leads. their as traditional the greater the ahead customers experience, hand continuous surprisingly, the about it than we expected, teammates thus internet to performance Karen? the will Clicklane focus And and financial Not like Karen in to to our express appreciation performance. improvement guest their perseverance. to our over

Karen Reid

Dan. quarter company. yet like marked some record for financial provide Thank I which you, our would highlights, to another

our And above operating compared expenses the For second $XXX.X actions million, increase in and on profit basis I our dated of income XXXX. XXX% of these increased manage you XXX the control adjusted quarter points times. today, to displaying supplement for net of financial refer an and the last our to record. an to the July quarter, X.X%, year, release margin our XX interesting additional period Overall press same all-time last performance through in year to adjusted our resilience resulted second details quarter financial gross

up comparison for gross was total revenue XXX to For was our gross thus XXXX all quarter margin our and the basis XX% performance, XX%, compared stores, COVID total points. up of second to profit was up pre total

while margins Total sales up was were margins improved points. used improved XX%, points, parts F&I XXX total up unit while used and new revenue XXX were sales was basis retail XX%, XX%, unit XX%. up up New basis revenue retail service

of gross profit a basis XXX adjusted basis Our improved and improved X,XXX points. as margin SG&A our operating percentage points,

XXXX quarter for million net gains share. second share adjusted per estate $X.X adjusted real $X.XX current of income the to for the $X.X gain. Net Now second quarter diluted back of for $X.XX legal diluted results. was income was per XXXX of or for or settlement million Net

Our rates. exercised for a effective second we Floorplan by over option for million properties, respect XXXX. XX.X% coupled capital our expense utilizing XX.X% $XX lower by driven through quarter, decreased compared tax Park quarter the lower With quarter million the the $XXX rate of XXXX $X the balance primarily this levels Place with cash deployed with purchase sheet prior was approximately the quarter, inventory year financed to LIBOR mortgage in on facility. to remainder on million our interest

capital Acura sold of incoming in in our site, we its $X back $XX Plano million on approximately payoff. addition, for facility, net and In of $X expenditures, million mortgage Acura and approximately our funds planning repaid we leased of we've Plano million resulting new Also debt. spent

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

to As seen quarter. the similar this of XXXX, what to we look remainder conditions we've forward we anticipate

SG&A still did SAAR we will remain who business unprecedented and New as In flexible this across to to I closing, more, that, million through work we the One environment, economy our supplies low tirelessly at time business long-term QX, ensure thank an ship and expect continues up return like parts to our growth concludes vehicle we're also to management. historical to with likely would highlighting on gross the that least our and service This a the $XX is emphasis with remarks. planning of business our rate. to year. teams the and Overall, unpredictable end in to prepared keep as current our its margins, nimble expense are success. and opens inventory during

turn comes Rick take operator Nelson instructions] the to first over question with now and call Our questions. your Stephens. the [Operator will Operator. We from

Rick Nelson

to you've congrats another that's quarter. the about seeing there? you LOI, there team in Thanks ask got could is this you're discussions, acquisition like on if and in billion the million I'd to $XXX like speak the solid pricing David active now pricing how in environment, if that additional $X that

David Hult

question and the really mixed. for thanks Rick morning. good It's

to imagine, approach. now different that out on can lot from multiples COVID of And at right blended a stay there's a you to off look and have our As would sellers like the of there our perspective is work earnings. it key disciplined

feel billion $X in didn't they the thing. so brands it's million under business far a now last We confident $XXX assessing locations all and would as it and a six I billion little other the away appropriately. priced in little months bit we slower little and little to right we're say They're it's because feel larger LOI It's So very our fit $X closer longer they're We've proceed. as board. how a a bit nine. just that and like the about or the $X probably walked it's from was bit the bit in to same conversations billion the size, portfolio into over actually

we've be So LOI the we multiples with up what air still there, landed. the and feel under what but really confident in will where we have for

Rick Nelson

Thanks that. for

do more a a can do lot to days. their I'm environment? normalize, XX inventory supply bad from things go will or they as run visibility in But I have So, I current they OEMs you the is tighter profitable than on do appreciate everybody in have prior when It think back will seems past don't normalize to of habits? the tighter as sorry, suppliers the the mean, when you

David Hult

say Rick fantastic it's answer we're that that the thankful too, a great vehicles a would consumers partnerships. produce And done chip to all that the trying really managing I at And very and the job one want in question. I shortage purchase. certainly done for they've to

automotive I tell, of environment. year normalize, a day strong that. operating to internally I'm days XX quite a see is year should things this manufacturers of Too with vehicles below and start next that there Now soon lot in a good a the we don't the the then is supply, XX-XX in come to electric hopeful settle about lot we run to at talk back going early think when be market for retail into that. after we've

taking So interesting online grow to that'll the bit, still a if COVID coming even that think numbers. I are some with times, those that opportunity as look margins little you even at time. back look with place how over transactions closer you somewhat SG&A, There's and come forward, pre

Rick Nelson

do the you traditional dealers think you how and Asbury? direct vehicles, going consumer overtime they that electric that think do with like mentioned OEMs start You EVs to that the impacts

David Hult

in the the equipment mature perfect supply body need we're to The And very it's franchise lot do and position dealer able a is is invests training system. and in a making certainly welcoming and of I very model through cars are to system. communicate electric that, investments complex, vehicles Sure, These embracing material. and feel to dealer of that people the consumer be locally. to we best think the

for franchise transactions So, coming. we feel strongly future with about the the really the are that online especially model,

direct like dealer that the really about online winning franchise a is and adapts to the I to it think the all seems transaction consumers as model.

Rick Nelson

compared outlook speak in-store sale. relative to attachment, Clicklane could overall overall Take in-store an a does F&I sale you profitability how profits? if the And to of

David Hult

end quarter peers. right sales of on heard out bit to and similar. used growth you $XXX mixed, the Clicklane heard rate pace in on little bit out sales, Clicklane below with on it and the averaged little was $XXX And about the F&I the now margin adaption. Sure, front of but public average. ran the you've we're higher there the store the our the XX,XXX and with new, a really with F&I And some happy and on lower a smallest we're We're was

in. their out that convenient XX And are about XX online, banks these getting accepting that of answers excited XX is in out seconds, say direction which of you more over the little fast. are DocuSign, being much lenders, again, they're are X were going a really XX,XXX getting we're financed, it decisioning, have And instant of I XXX% so sales automatically, approval if So completed of as handful have we that a people it's now instant that we're dozen making them X the or good should XX well. done will, XX a

So and partnership good upside it's as very with and optimistic, to grow to continue opportunity we with see Salty our going well.

Rick Nelson

good Thanks for all color, luck. the

David Hult

Thank you, Rick.

Operator

Thank you.

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

John Murphy

the Good morning, unknowns tightening two. and next shortage, the crunching bit tighter, there's mean transit to And on it situation what just to a it's everybody. on for inventory tougher. I'm July you're saying be in mean, just a crunching just the coming I'm kind curious what on which curious or like seeing in inventory vehicle little is of handle I bit quote vehicles what seems you're just month and getting I David volatility a actually going plus side, seeing seems the is how - sales you're period? just the in

David Hult

be in so what he to out to be job know don't experiencing July we tough. them we're I July producing demand sense into the pretty I get we're to relevant toughest they start the can are what anticipate just in now about Day. vehicles for and quarter I'll getting and manufacturers to availability, difficult, We doing far and August received. wants. to and is us. came demand John. and some month high mean, the of probably jump Sure, is seasonality anticipating if the Again, you and after Dan What a have then quarter that. But Labor going the what it's with adjustment right is great be this this September,

into we incremental hopeful but we as in day see we the supply we're an where quarter, we'll anticipate go fourth well that should be. behind So increase

Dan Clara

OEMs August the the building it's that, July to that to I The selling the is it expected and order thing lowest hitting job good be Is, doing, as we months. we also by as allowing the John. are the on they're add But would to and what us David's wants, inventory point, the delivering at soon Good only that way. morning, consumer via to be very lot. also vehicles good the them have

from benefits of return we'll throughout high rate the we of that and support of lot OEMs continue two just know navigate the on have a So next and very the that, are we inventory. the shipping months to our

John Murphy

is you available some the want? side? capture make cases, kind to push is And the the mean, consumer? wait, of consumers for used you time the even are mean, to transfer these about used in rate that an And willing customers helpful. some that you that can used That's to on they what's I are inventory that enough this, think sort to for sort backfilling over amount I in finding when indeterminate for there of which I kind mean, of of, of inventory vehicle of

David Hult

first find it coming great out sold And like and available used turnings but stream although well. to And mentioned pretty have biggest be that is the little orders least the serve, question. news harder our earlier, trades. good bit items the our of body cars also have the is is, do a it's Yes, are will there. way your available first also great department from then come for we The some the the and to which only of inventory I of amount inventory, car loaner coming specific we as a

consumer to the choice? willing Yes, vehicle for of few more we're seeing wait an car standpoint, their weeks So for of their the additional patience from our a consumers the again, waiting it a high have in. issue. very those an allows to not us is back really new stated when earlier, choice definitely to what goes that come rate turn And lot cars I

John Murphy

going deal coming mean, you pre-sell And used possible? that well can in that Is you work because that be of ahead what's as and can know to time? something trade, I you that's

David Hult

Yes, not the retail answer of to question Yes, can your lack market standpoint, to until is a market we're to of any able for mother the better a first deal the process term we or yes, can deal is consumer, the we definitely. paperwork sold we completed. on can but

John Murphy

also that typically stuff, $XXXX points of and think XX I yield variables normalizing, in But than when front-end mean, SG&A let's about if higher hopefully, the grosses, to lot of a a you how hold equation savings much $X,XXX, how to? XXXX of forward about we about think benefit would the then this in to you that And metrics even think things, about you well, can the on step you hold mean, it's do on but of on executing you if I we do are I in of think you yield, much going period, is, which SG&A I is into little lower question. time, high mean, gross bit you. north or we there same you're can even better tough should so to that's than state, at that. Got stuff, mean, you think forward about than say know, clearly think answer? front-end think obviously, getting you're those maybe to. very I obviously, a a this two. two SG&A this normal XXXX, gross, typically normal the you we And to mean, the a know, is How of combination in

David Hult

best try as It's John, question, and I great I'll a to answer can.

we think have I we we a almost the pre that expenses luxury. than we're mix that different both COVID, today, in XX% here sit being were company we cut brand and As the

opportunities float use we of well SG&A to COVID digitization our going margins will above online. and pre forward think our that with through XXXX see our term past and I sales post forward So COVID

not where they but we back So down while where the margins to bit, there's expense were, they upside believe may road. are little fall today, than a back and lower

we strong SG&A operating create a healthy very margin. think and returns So we're still position great in low to

John Murphy

about mean Okay. saying we ahead. to And dynamics, with out I the the running assume you're lastly, of plan, and playing you're then If strip pressures basis the you're just is execution on performance, do you now a running ultimately us I you're well you that seems giving it little given how dated? hard year the five how Clicklane because but mean, disagree plan it's well think your year of do think that's like an ahead reassessing maybe market probably or on moment, firing fairly perform, well. that, the update, how land? and given time, just about where should you will mean, just not think five necessarily I we

David Hult

how warrant chips these John is only tough is in I say on markets, few depending side point. next that respectfully the in, months a would update. I the certainly But we're could fair six fall an upon patience also M&A would it months say, the

skies best Our that far $X looking too want same-store is ourselves, there, the well our we what and the is of here ahead of there of this time, under to have where kind don't sit where today, period. we're to because get lead ahead too to we're exceeded far I potential XX XX I understand normalize we probably target at want what banks, months get not hit but to at. really But at to point to we point, but billion don't in revenue that, it's LOI, the reassess so speak. your ahead we also of to We're when see in month

John Murphy

you. Got

you Okay, appreciate guys. much, very I thank it.

David Hult

Thank you.

Dan Clara

you. Thank

Operator

Thank you.

Our next Stanley. comes Morgan Adam Jonas, from with question

Adam Jonas

Hey everybody, can you hear me?

David Hult

Sir Good morning. can.

Adam Jonas

this. on Oh, disclose might units how great. many actually sold Clicklane? I you were Did have missed

David Hult

we the tell just No, quarter. you, was it units under I'll Adam But in didn't. XXXX

Adam Jonas

sorry, sorry know that. Okay. like I know kind fully, digitally Carvana I'm but the many say Thanks of fulfilled, of to not. how were use and for of, you I the would ask XXXX kind you if And don't will they're word,

You XXXX? the fulfilled what what know is the mean you would of like, describe digitally most I

David Hult

start they're round Yeah, we of and to online completed start quote the instant work done in online, XXX% push going that signed of They're the sense we in I'm pulls approvals that When on Clicklane, credit up. The because number paid more hard completed was in for are completed are a through store. real. push credit. And signage the than XXXX. on a the the pull payoffs Their use it was different semi DocuSign.

our Now, if and everything that lender DocuSign and as some that pick a lender and payment accepts sign DocuSign, we're the DocuSign, and it's in documents it's they accept If then up they bank delivery. a presenting said have. online [ph] doesn't new Stripe on done, relationships all we

finish Clicklane it and So in the come and us. not a they're sale that all completed Clicklane, then online, is on there's nothing additional coming store start in. If they to they

Adam Jonas

and color, from Dave, say All parts derived what the revenue finally, about service right, the parts service and And cetera. experience, or from profile, maintenance, et David. just you your appreciate the can and

but know if numbers there versus are still these us? was you'll the get EVs into and the I color the vehicle? I'm units. Park your small, didn't can growing realized I - more the and geometrically equivalent On just give more ICE of you coming curious bays what is

David Hult

we is. Sure. and three of kind can't and different what at in buckets is control look service it warranty Every quarter, we internal

on focused we customer So pay.

We is service to double electric software of vehicles. on from lot completely we're cars, have there's this us in time. last But cars. consumer go a generation change glitches then because will dollar of So now, hybrid come over electric for because highest issues the back our to are that But also standpoint, engine, it's with will and retention of And that And buckets going the technology, belief vehicle. think the or three that. I change. that service with will very few digits the spent and think quarters, right complexity to that up combustible first the EV the its that consistent

where and of for collision cars not and vehicles them we're stores week working there's electric touring lot We on bullish there already and excited going, very in we're certainly maintenance. our us last we're on of EV several So center. in we're a

think than, we I still along speakers]. batteries, tires we're everything go time, [multiple brakes, they need else will and think over positioned brakes well that So come - the down, dollars but

Adam Jonas

is battery Mini good.

David Hult

actually those batteries. replaced have of We already some

I made oil there's that nowadays, is up are it that and when really the in in isn't combustible be really lot oil changes. whole engine made brought but So of no there sense a so breakdown, cars true, to well money change

Adam Jonas

appreciate technology, the I be are extra software, they a to and that of service if of it to the to distribute point bit need more in seeing franchises lot stringent, or Hummer that retailer I Are the would be to of investments you Are play kind the make can a in the that you with EVs, slip your and sale order that mom could get you cetera, pops? people authorized. advantage diagnostic et versus I Maybe are the or you using at coming might electric authorized want to can more car one color whatever to of to there. in. OEMs imagine

David Hult

the well. physical vehicle, requirements car make the a in the you made naturally, equipment. of and you'd the a to continue we'll have have if be We that certainly equipment more the do But expect, work be trained lot OEMs as and to have both as training to going we've sell you're to and on to opportunity investments that and would already see from investments

Adam Jonas

Thanks, David.

David Hult

much. very Thank you

Operator

Thank you.

from Our Gupta question comes Rajat JP next Morgan. with

Rajat Gupta

the taking for Thanks morning. question. good Hi,

exclude year a Clicklane. question up units still XXXX. overall had you units Just the the that mentioned full be units with the The we XXXX. from for for same-store business, XX,XXX follow-up Clicklane If on

trying units existing your sold what way? how much get Clicklane sense being would on Thanks. to I done And incremental, a is either of then a of Just the business follow-up. have had

David Hult

May a Its Dan and number Clicklane April were sold a and the from a new time. tool it Asbury, the in customers was Sure. in over the June script, them can continuing we May bit a growth in I in it's change will its to you to tell XX% before. July. to sales growing new over XX% and stated his vehicle XXXX of quarter. think that that little quarter, see We we're But month, hadn't at so to

of a them transactional do decisioning XX, on but no there's the about a issues we XX logical, not tool. just softballs have only it's them only They're full have and dozen DocuSign. credits, of instant lending, So with accepting

would have quarter to transaction a that home, in still do it banks house, for you showroom everything accept we prior at And So the do you I progress yet nationally logically can decisioning the your got go sit there. a between DocuSign, you seamless would better transaction. over have back and up why for lack the the instant very XX-XX hours. tell the term it's to the to for delivered went if the opened minutes XX% the and home normal, traffic for two of And XX%. quarter, country up in deliveries But

tool. we So certainly the are benefit in the the benefit seeing see consumers our and

Rajat Gupta

it. Got

is like produce in-store you had Clicklane that you? your used that to saying like grow of Is in combined. to run or business XX,XXX basically, XX% fair that almost that. it basis, and of incremental business the on all target mean, that for and And year So the full rate you're seems the simultaneously. majority I a also can overall units of for

David Hult

the with as you it's could there awareness say for sophisticated And grow couldn't you have. the three next sales the Again that hard would It have new, professionals the low little quarters, store and meaning tool to guidance to stick that just that arrived. the don't really continue give these is deep is are next this online incremental what I going certainly now supply well It's be is to XX% gets sell, fair. that. out sell in we challenging years, three tool before on cars have so, there'll I there's sales. see to the something day a selling you into right pipeline, logically

Rajat Gupta

the had some could you just Got including Park where What's stand the And question last that on the account the following-up you there. color headcount, had SG&A the employee it. just us Great taking of employee into like layoffs year? for just today, count the remind of current a company, productivity do question. Place, we thanks

David Hult

associates staff. XXXX currently on over Just

Rajat Gupta

in and see recovery to coming we supply here some well? one helpful. where on your sense back continuing a us there give basis, you month as do third paid And how just forward you quarter Thanks. on you services, customer are kind of nice parts one thumb Got that growth really quarter, there, expect it. are mentioned in this shortages, did we rate the the That's saw which that hoarding having last you and last warranty. second was particular, Could

David Hult

that and third expected absolutely service continue quarter numbers currently We into Sure. to we're parts the seeing. the

and Some have for year, sheltering been they're on a from place people the of car catching maintenance seating. just up it is, in

things it for summer of and different the planning that. some is And trips like doing

strong for very a parts service. summer and anticipate we So

it's back some as holding as the a business, are brands. But doing really a at issues job, far OEMs we parts it's say again, some certainly wouldn't hit company. materially the overall, do have miss great I parts and point with us As or this

Rajat Gupta

luck. all Got good the it. for Great, color and well thanks

David Hult

you. care. Thank Take

Operator

Thank you.

comes Moore Our next Truist. question from Stephanie with

Stephanie Moore

good question. for you Thank morning. Hi, the

David Hult

morning, Good

Stephanie Moore

some I there wanted are you your the as stand to of give you, marketing update, Thank touch an Asbury well be and and territories Clicklane as existing not could helpful. your into platform if your territories, on on the plans of where legacy again any market? update on expand kind that platform we some would platform to us So

Dan Clara

sell. marketing a some on you for it's and can't don't the anyone simply same marketing the of think tremendous you're Stephanie, now peers. I'm spending because sure our are is Sure, inventories so Right to amount all I light, dollars

dollars and side on end So the point approach until SG&A to think that the you'll can keep way. of market a year we side. of To don't see towards new it us now part governed absolutely brick say pre-owned part retain entering the is currently somewhere efficient, our that this on more year, markets dollars mortar. do it your enter return. the would is and into benefit. intend think can I more We we We by doing marketing see the pre-owned we omnichannel that our faster, occupy we'll of next right beginning of about inventory that I do

Stephanie Moore

for you it Great, so me. That's much. thank

Dan Clara

Thank you.

Operator

you. Thank

question next Bret with comes Our from Jordan Jefferies.

Bret Jordan

morning, guys. good Hey,

David Hult

morning. Good

Bret Jordan

as customers, did could talk On cars far home talk delivery? the how you said these Dixie are sending you I now selling the you're reach out go there Clicklane as markets you vehicles, in new circle any you guess there about own kind XX% where cars franchises? geographic and in cup about I XX% new Is far guess that on is of you that and I you outside working a guess of question same restriction don't can't

David Hult

primary outside it XX% To home. your all Bret. mean, consumers question. when advertising We're I delivery Great of abide electing are our for we and better at term, a by of lack point, that. Good morning take to to of down our OEM not stay the comes rules area, in

deliveries locations. have from Greenville, term as of taking a seen that have so lack radius. have - Texas we're have from to XX in gone that mile South that that Georgia several of a around we have We seen vast say in Florida, well our better seen would place, to for and Carolina the But probably home deliveries majority seeing is I we

Dan Clara

a a Atlanta can't I we we follow-up would franchisee New just you to York. market Chicago tell of in in on or have Being that. Toyota's store Bret third

they people other adhere ship car spend it our the and sites to from states, we lot much we relationship choose manufacturer. to a However, certainly find But our this we in if and very we're do of up, our that. and and policies buy with us a money optimizing

Bret Jordan

an your in I from buyers for average the think, you do What do Clicklane? coming you that distance guess have

David Hult

is distances, and because actually long Yeah, we're have that's I we would a XX% say of business. think thing quoted in the our some quarter, others great And miles no under sell we don't money the really front to making selling some is model But great, that. is and and worth car, the the the back. in parts want just Carvanas business car XX service

So online doing having perfect the do to that a and maintenance world is with us. locally transaction us in them

Bret Jordan

one auction? Okay, on that us guess used question, you're Could you in-house give inventory. I sourcing guess, and I percentage the versus the then final

David Hult

Bret. absolutely, Yeah,

auction. were The So, less QX cars turn the comes of through also the than in, the level said, of it, it acquired at consumers. trades, XX% and cars, majority store we acquisitions at from like rest of acquired the least loaner I that in vast

Dan Clara

XX% I other our from COVID, managers, in car of tell to our a general been very and than buying auction. credit pre cars managers stores that's disciplined we've And not the and would you, used the more

no You the more you. nowadays bidding cars, paid is walk Margin away get price. with in that acquisition one process, you than about

vehicles the local service that sourcing drives from and is and consumers at trade the healthy and cars loaner us talented which tremendously they're So seeing. and we're things, margins ins getting direct other

Bret Jordan

you. Thank

Operator

you. Thank

next Craig-Hallum. from Our comes question Sigdahl, with Ryan

Ryan Sigdahl

Good guys, and the morning, congrats results. on strong

David Hult

you. Thank

Ryan Sigdahl

us. from one Just follow-up question

a there really I footprint So more not mentioned that divesting, you've more your Asbury, for ago, today. do proximity those and feel a build one, and you I on importance scale when guess, scale guess Clicklane really decent other. accelerate of do two, spent, similar rationalization, decades is a how cadence current have close kind today, the of a offsetting number kind looking adding base of have back each to few stores about two of you you've the amount that's store nationwide M&A Thanks. IPO, you rationalization needed? But faster? you of And then customers. given even why done

David Hult

the great and question. We're much that to companies only deploy on. we're to It's one so much and there's capital take willing of a leverage smaller so

is can really a looking thoughtful. revenue think to thing it. say this people enticed we million easier purchase, going where lot we've we're in that healthiest We we're years, us under here. a that's it's that at results this the buy part we like $XXX a also be well saying, happening operator, just as above integrate going things by We space be platforms system something business disciplined, But and that can mix. We number, that that run we're to are that forward? we not for the our keep have other we good in and the credits this margins is continue we and company do And me and an for we're not the it and that that more. LOI, the integrating running just they The brand ever getting that the biggest. to have, have I two lowest and to highest to we the would been that than those XX mostly proud in and thoughtfully. we're we the is We're grow doing the the synergies leadership happening, of SG&A continue going really operating the a from because we we're have the fields we do are think as states into We in are stores this have not

As goal, expanding everywhere, I our that that's in it know truly market isn't. don't far every as

markets we we markets, do retention skate want where meaningful the dense and be share maybe of, and our goal to have for to or in business lack market puck grow relationships service and is Our kind of is in within ideal a better We the through thoughtfully consumers to want to every term going. for perfect the Not is be with market in. us.

for be You'll see Ryan? in us every isn't there, you expand state. Are in sure. But states to the goal new

Ryan Sigdahl

just guys, luck. one. had Good the That's it for me. Thanks

David Hult

you. Thank

Operator

from our We'll Morningstar you. Research. Whiston last take with Equity question Thank David

David Whiston

that that is still require signature? as states Good how I first on of I you're wet guess you, talking great and DocuSign about certainly there's agree Thanks. with morning. but a today,

David Hult

now, couple Oh, on DMV, more there's do digital side to of and are lending, right in states more many process with and the that of trade and is your Especially the actually if in are and itself. only vehicle Virginia, DMV vehicle absolutely. bulk documents the the

process we're them. take on documents And though single numbers point for to form then is of no One, the their the are want all in There single regardless your the for The a awareness requirements form the way see lack to designed customers is state transaction, two surprises are, we've better term. are redoing to Clicklane place. that that and the even possible and delivery, DocuSign. Clicklane, main there visualization every some So the have go entire we of that, we through reasons every through documents what signed redo. of

convenience, again, we one time, need, to of go few So some when it's when to very or other signatures to the upon that home, it in may we in a the we're vehicle it's that's XX% to we're state. cases, maybe smooth six, focused. transition or just us, software two, the where experience the delivering experience, the and the creates create But depends really cases, people

David Whiston

the Okay, is, customer, of so document sign when paper, actually that where you any they require does piece the that see customer signature of regardless a physically correct? when wet actually that's

David Hult

then again, word see the form, signature on we with sign Yes, form, they Georgia DMV to a on DocuSign, again, requires it. if visually show when can form that But signature. signing a DMV up, so they're that going wet they're

David Whiston

that sense. makes yeah, Okay,

just the or On Clicklane delivery, XX%, home the that was entire company?

David Hult

just was That single Clicklane. It was for store. regular digits

David Whiston

CFOs. would tax own Federal know can a raising on statutory increase and talking I you your increase one between for Biden you're administration about comment the is tax the Federal possibly be rate? in Okay, in the rate, one But

David Hult

at with be honest you couldn't I looked so haven't yet, that it. comment to David, on Really

David Whiston

total obviously, probably decline guess XXXX a situation. role the question discounting playing a is I more the quarter it's domestic over and massive Okay, inventory mix this on But just one was there inflated to bit just in due too? unit, or GPU a there

David Hult

equation and of a equation. is we're that It's to that supply demand it margins and all, related very, related right simple if discounting seeing because a is supply just any, The it's a minor, the just seeing, lot very, while now, to the demand again, of level at all - very of you're inventory. and lack the

Dan Clara

But actually be tell a higher. because it's little could those numbers deceiving, I'd you, also

domestic inventory vehicles. on you you on pre on significant really Our healthy, is lack But harboring if and that's of domestic always will PVRs that or generally side. ourselves side we've truck go COVID, if healthy had the governing our

David Whiston

Lightning? speaking customers F-XXX And have of trucks, feedback you from on interests any really do me

David Hult

and that We've the opportunity but coming. a some exciting a of from see coming so There's also truck. and consumers, about not mean, lot you impressive the EVs that reaction, times. the would vehicles road, been We're as I drive Yeah, them imagine. to of also within are positive represent down stores that there's excited the only excitement lot had the really

David Whiston

agree. I you. Thank Yeah,

David Hult

Thank much. you very

David Hult

speaking We and appreciate we your discussion. today's Have a in concludes you day. forward look great with This to participation October.

Asbury Automotive (ABG) 27 Jul 212021 Q2 Earnings call transcript