Asbury Automotive (ABG) 26 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Karen Reid	VP & Treasurer
David Hult	President and CEO
Michael Welch	CFO
Dan Clara	SVP of Operations
Rick Nelson	Stephens
Aileen Smith	Bank of America Merrill Lynch
Ryan Sigdahl	Craig Hallum Capital Group
Grace Kim	Morgan Stanley
Rajat Gupta	JPMorgan
Stephanie Moore	Truist
Bret Jordan	Jefferies
David Whiston	Morningstar

Call transcript

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Operator

Good day and welcome to the Asbury Automotive Group Q3 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Karen Reid. Please go ahead.

Karen Reid

Thanks, operator, and good morning, everyone.

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

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

statements subject which current forecast, Forward-looking historical and than – to are each financial which in may which of certain projections, statements expectations, nature, uncertainties. are are which other those have may include

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

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

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

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

David Hult

our up third record earnings of our XX% Welcome reported $X.XX, quarter, the In a and release call. prior over adjusted Thank good we you, Karen, everyone. earnings EPS to morning, this third year. morning, quarter

inventory our levels the shortage. challenged chip to to continue new be due car So

ownership results strong quarter and results demonstrate to deliver delivered These us the last basis expansion and an third record of model an impressive and with the strength all-time gross car expenses, points of from versus also contributing in year. of a versus stayed sustained full year. margin gross enabled to suite franchise XX%, in percentage managing improvement an the Our profitability. resilience adjusted to XXX an basis team a its service XXX journey, of XX.X%, sales point resulting profit the prior services of We've SG&A as of through disciplined

gross revenue Our up quarter XX%. was total performance for to sheet strong. strong XX% profit balance this Due total up cash flow, and year-over-year, the and our record remains was

ratio at one. acquisition plan. our is expectations quick and times. annualized strides ended on net five-year revenue XXXX Our sales are projection our this quarter strategic for assuming for Same-store year revenue X.X of Park growth pacing unit Clicklane, this And our is A leverage made on Place quarter regarding ahead exceeding our pillar. we've great update XXX up

a close As in announced, Auto of acquisition Care transformative Total Miller the on to the quarter. we Larry and H. expect Dealerships fourth

aligned growing and strong their With capabilities together. mix our jointly name to our the deploying right we and cultures, look states and in forward brand

Chrysler Kahlo recently, addition, in Arapahoe are scheduled we annualized revenue contract close With in the Indianapolis of on the In acquisitions. today. the Greeley billion we fourth market total quarter in under to $X.X in anticipate expected on well, two another close and to Genesis market close in and Dodge acquisition Jeep closed still will XXXX, from Subaru as that acquisitions Denver we in Denver and Hyundai

QX plan during confidence results, update our our the we these earnings we of execution XXXX. growth With maintain in five-year in call and strategy, our will full

his welcome with Now auto knowledge at many for We vast like and in worked retail I Welch, our team. finally, experience members Michael Asbury He teammates along broad the together to I address business the years our to with working would of Asbury. be welcome finance. to Colorado in Groupon CFO, the to family. and his at in brings Indianapolis of excited to I'm new again. all like new into And also team thrilled would him my am Asbury I

to us communities, our serving like without care add about engaged in have being and highly not quality stores, could ability Our you. who our happened guests

all us the organization core all the and ability thankful given of your to to any call and every grow best Dan to I'm business, are team. behind the and I'll executing discuss you work, You performance. now each our People I Thank you have be because of thoughtfully to make us our making part operating Dan? align over appreciate hand and this to you place our the you grow difference and in are careers. business do vision day. you.

Dan Clara

David, you, our and were stated remarks the good preparing Thank of My XXXX everyone. quarter to same-store unless third morning, performance compared otherwise. for

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

was vehicle September, year $XX,XXX or prior were inventory million, our year of prior per the XX return profit XX% days will All our margins from the was and gross of supply vehicle to the from segment significantly period. at was year. still from There’s when new days production At up total down average normal up level. end new the no $X,XXX, prior clear $XXX.X XX days, understanding Our period.

of the days the remainder low into year expect the XXXX. and supply We throughout to remain

used to vehicles. Turning

an volume retail increased XX% $X,XXX. gross vehicle used while per gross margin of was Our average profit X.X%, representing

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

$XXX.X used XX-day at Our million, the prior days a quarter down inventory which represents supply, X vehicle the from ended year.

XXX%. Our used-to-new the for was ratio quarter

F&I. to Turning

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

Turning to parts and service.

warranty XX% fixed our on service provide XX.X%. margin posting our Our XX% revenue revenue profit a the omni-channel Though our And an gross pay increased dropped now while like update total XX%, initiatives. healthy total would parts and its continues was growth. to XX%, customer quarter. increased revenue in recovery, Overall, fixed I

team marketing to to an traffic outstanding digital job Our do website. generating continues our

in continues allowing ago Our XXXX. where years a unique In Google we million is visitors, QX us dollars. XX% commitment spending times inventory efficiencies X.X without to to organic versus shrinking, increase traffic drive over media QX, had increase to search

online We is impact repair the to QX per versus XXX,XXX XX% achieved positively service increased increase and increase initiative service online This and over all-time appointments. component Another dollars an appointments, work. a record service retention XXXX.

all and Now, transactions We with cash Average sales share score XX were them dealership which sold be our Total quarter our quarter to were network. stores. QX, our time this of minutes minutes average yield in of and Clicklane. stores X than we trades XX% at belt, new Total through performance Asbury’s taken used. transaction vehicles front-end of XX% quarter, $X,XXX that the finance to would were of of previous of metrics. with some Clicklane customers two under deals. higher like Average front-end on full Clicklane, XX% credit new to vehicles with and yield continues $X,XXX. credit is consistent for score for through X,XXX

year-end. annualized XX,XXX We vehicles continue by expect volume Clicklane of through approximately to

its the traditional like for field delivering And and far at work, expected, excited experience. As are the about of thank targets. would Clicklane converting their all guest as dedication an remain finally, hard tracking We thus ahead quite customers greater commitment of internet exceptional rates I teammates than leads. in to to is performance it Clicklane our

would and warm from our to In to CDJR welcome addition, I members like new Hyundai, Genesis. Subaru, extend a team Carlos Arapahoe

automotive most North All gas-centric of with have align retailer. tremendous our built of being Star you organizations the property, that

future Our forward I meeting is you. bright to of and all welcome look Asbury. to Michael,

together. will is our call business impact automotive forward to significant the Asbury over hand on the am in performance. with enjoying already growing knowledge Michael and of look working making to company. depth now discuss I Michael? our Your a financial you to I

Michael Welch

our have would company. highlights of warm some good morning. another our Thank team to growth other to excited To you yet team again. record on the our to Asbury with part David quarter and forward like be with investors, both on call, opportunity I for journey. work I look our provide I’m the the for the working to participants and mark which financial analysts, welcome.

supplement gain $XX.X of adjusted or diluted on performance $X.X Overall, per our for actions today. increase the third and income $X or for our third of last divestiture was and million, quarter increased For real adjusted XX% basis charge. manage diluted third above XXX expenses income resulted estate adjusted XXXX of of or Net quarter on period of third of share and the costs $X.XX acquisition and profit an points And Acquisition the of divestitures net diluted Net million, share, dealership $XXX.X quarter for financial related year, or release another income a an to press year record. quarter, gain $X.XX the quarter a X.X%, gross $X.XX for for diluted diluted our or million, per adjusted expenses million XXXX per our per Adjusted $X.XX additional to record. control increased financial $X.X for in XX% third in $XXX.X the third operating $XXX,XXX operating income dealership a details per compared please quarter see record. to last $X.XX of million same margin share all-time to a share. a share. million was on quarter

for to capital Colorado the XX.X% respect sheet. million cash store of of in for in quarter deployed the decreased by XX.X% was to With quarter quarter, a we $XX $X.X levels. year rate expense our acquired XXXX. inventory tax Floor by lower effective approximately Our driven interest compared over million the on utilizing this balance prior Subaru plan third XXXX,

spent million repaid divested $XX debt. $X resulting proceeds part of net portfolio, to In of in Charlottesville, of our our approximately store as BMW its expenditures, we mortgage optimize addition, payoff. strategy in of approximately our capital we we million and of million Also, on $XX

cash, well line the our balance our our net our X financing working quite X.X and times. our enter leverage of leverage the toward As result With exciting end approximately of growth million at of quarter, floor our we Also, operational performance, and targeted with acquisitions credit stood are $XXX healthy liquidity revolving net announced under of at the of facility. both we offset ratio accounts a as times, availability Asbury. quarter is of contract, below the used comprised on plan sheet

the – financing to equity announced combined of combination acquisition. plan to the of As raise late September, prior and debt Miller Larry permanent H. the in closing we

finances. to our the credit are Larry little mortgage H. with Dealerships this our close real estate syndicate of Miller facility both later working supportive and We upsize acquisition our We of plan to group year. ahead

free range cash times, times X approximately strong of we accretive during Although to XXXX net targeted expected of the the transaction leverage can nature flow believe take our deleverage deal above given we is highly initially X generation. from our the that our

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

recent now build New our acquisitions. vehicle continue and to to strong unpredictable to This turn team bringing Acquisitions. prepared unprecedented who year. to our with businesses take the you inventory I call forward I build our look would operator and that to culture the long-term times teams across during the members supplies forward to closing, Operator? and your low over remarks. like to thank and also our from I until our and like remain the Asbury. are look our We’ll you're the current I concludes to ensure with working you to likely questions. – tirelessly continue to work on the In working success. new continue would next welcome to

Operator

Thank you, [Operator sir. you. Instructions] Thank

Rick Our comes question Nelson first with Stephens. from

Rick Nelson

Thanks. Good quarter. Terrific morning.

the to post guess capital And how deleverage in that I going going should begin mode? forma revenue leverage pro the forward? So standpoint, we balance you're Are see term about the focus we that you these over the think sheet where the post deals? from $X.X acquiring. a Is billion in the priorities near

David Hult

in capital Rick, question. to for perspective, leverage Xs. expect allocation perspective, after Yeah, we From from the your thank be future. the just you appointed we leverage a deals, in close a high the

deleveraging X that leverage back will for also XXXX acquisitions in as be back that the to XXXX our to didn’t mode debt some if times or also either cash deleveraging pay EBITDA can down some leverage, take provide a target. would well. just that perspective, But we require and in that provided We deleveraging additional ability we bring flow found

Rick Nelson

what markets million Okay. you talk those composition bringing and that, $XXX group, the about such could Thanks incremental Also the of that in? revenues, maybe in Michael. you're of the the for dealerships, in are size

David Hult

yet, of those Hyundai David. you Because take revenue, about out, three and Subaru but that It's been a $XXX brand Rick, then XX% very a right which one it really We mix at mix been brand announced this want with discussed mostly, fully is the we group about all a to is it well. the hasn't leaves the morning this million import KLO, grow. we've with trying is store in it, don't as balance say domestic one luxury and Greele today. to When Arapahoe group. in strong in market

Rick Nelson

follow as for that the those could multiples Great. up to if looking Thanks speak for Maybe to at you a stores? that. you're that,

David Hult

Yeah.

well. So grow on about a little there's opportunity a the an off within that multiple. upside yet, of I There's head, bit marketplace, believe to of we announced X stores X and top one CapEx and as in the it's and between good X the the haven't multiple them involved my

Rick Nelson

group. bringing I'm sure Miller the Larry Right. to some digital outsource deal, they're

into any and you could to speak that challenges opportunities the integrating, there? If group Clicklane potential

David Hult

and like you integration for strong the be We're of Park should really digital. opportunity I I pretty an relationship, anything, stores like well. did and lot that kind perform a there the getting management in to in It'll extremely more few and their Yeah. same always to operators, another absolutely. strong Place mainly DMS. integrating there's grow. the executive the there's enhance capabilities and its side. acquisition but But every silo. to it's smooth, extremely They're be Sure, senior trust but operated extremely – one in brands, the of would the for to all integrate don't leadership, team great They're that'll a first softwares, it potential think the retaining and same focus all There's software. and months. the folks go we're tell us starting then know in digital creating we

Rick Nelson

for Great. that. Thanks

potential what ask of brings? that could the implications you Care financial to sort has upside any bring risks Finally, opportunities in-house, on that I the strategy Total that if Auto, about that and

David Hult

Great. This it It's car has They organization claims, best and Miller very tell can is do paying Michael great at an then David. balance would stable extremely I in. sheet, accretive sales of a When very I'll EBITDA significantly just see The been years. a us. jump you higher our they're it's start essentially really above you as a year level XX integrate job strong potential business. at rated. the there. had over over on it that, you high upside million a and Margin than see making operations XXX,XXX we to kind $XX car into sales. Asbury can XXX,XXX

can about the we're hand-in-glove numbers. They Miller a what relationship the And organization. extremely had have TCA for it's service and other So, that true that It's retention excited it do. huge strong organization. benefit between

David Hult

a of perspective for of of to bit kind the kind Rick, defer of bit of as it noise is will contract of to insurance from Yeah, a a little that an dealership one amortize and little have business. profit day the slowness over integrate thing guess an moving I how life from accounting cause it one caused we profits a that we

bring to able So us will because at it measured Asbury of a that, years in take clip. be few a to

now. The they other bring business right the bit itself in some is so just that don't thing Asbury, some to in business a licenses business, has and states, insurance additional do little obtain to size for

to just into we get their to so of be And bit Asbury have do mix. a brought labor to little able fully

Rick Nelson

it. Got

Okay. Thanks a lot.

David Hult

this year, XXXX-XXXX through period. the Right year

Rick Nelson

for luck. Good Thanks Okay. that.

David Hult

Thank you, Rick.

Operator

you. Thank

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

Aileen Smith

for is John. This Aileen Smith Good morning, on everyone.

dropped tightened the on fair versus assume business. into then the to First entrance point specifically, rate Can gross improved talk that sales is with vehicle And about XQ the what and quarter through it should trends? more launch trying think Just the rather margins question the you is inventory as environment or to GPUs? growth XQ on off into XXXX. further quarter new exit about in the for and be

Dan Clara

were this driven margins an we morning, Good although enter mainly demand. would our Yeah. a supply pretty say are throughout as the as probably the of I quarter, we stable due and had to exiting QX quarter, Dan. uptick into shortly bit is The

as move into on one script, forward constraints we we said inventory we, XXXX. I it continue my As the see

So to inventory. the the we along expect right margins rise

Aileen Smith

is the talk but prioritization, factor then, a on same-store this And a in the you for growth. to function about margins at of for as or to in look a used vehicle quarter-on-quarter. great. if vehicle forward business dynamics, this broader acceleration you the trend the obviously are transitory all is bit market as shortage vehicle sales can going between comps a Relative something should namely focus same-store purely nature? Okay, versus growth used this down, material margins gross more the GPUs? Is for the new opportunity sales we inventory gross that's market offsetting at and business continue structural

Dan Clara

think, product market. I a the it’s just of

If something sale cars, look at inventories cost down price seeing that XX% used it you drop and or in is we're new increased average that selling our of cars. as in

sale people of to not is A is worth customer have that used years, more in lot cost going up. be of than Our car purchased today. the going for recent their cars cars

opting are or back us. trade car it to they to in sell that So

that’s of So issue. – the I that part believe

the honest, we're the believe We other used market. volume is, this the business grow this let's hey, and to margin. standpoint The expect in aspect we stay as saying, And other market both car that to the can same. a not we sacrifice as continue from conditions long get be

Aileen Smith

your function can we if much one five-year acquired may. or we know targets own target year, component your you've the other front rollout outlined. say Miller five-year you And the about coming the your with a in having Clicklane of in thinking your of referenced is which it. update, obviously is the the Clicklane. than Larry previously driving line would one, key acquisition plan also But next more versus business organic reasonably last revenue and be and higher assume expectations? I Should think you of upside growth Got I is this on I plan prior

David Hult

each come is year for to five did Yeah. valuation. we right, a at it I basis next try don't This hit address and that And When and it on store please Clicklane years, monthly with conversions we looked it. increasing the every I'll David. if to get by back.

technically a right conversion to fully where As about we're below six there volume From Clicklane has standpoint, of you one, percentage it traffic, into relates expect it from. There because lot is little year be is of additional it. it's a tell target. we there the our months lack been lot tricky to we're but we're with a not now exceeding of two points I'd of inventory bit purchase traffic but because to a inventory. a

to we're to the seen, 'XX it's continue year and and 'XX, that real conversions we're easier So it of conversion the belief hard response in 'XX more certainly consumer go with what consumer use. comfortable anticipating but online sophisticated next and and lack the tools fully now and transacting to how access to in been inventory, as become it's is each and rate happy higher year treated right with more becomes our to the we've

Aileen Smith

taking questions. makes the Got for it. lot Thanks sense. a of That

David Hult

Thank you.

Operator

Thank you.

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

Ryan Sigdahl

mechanic. mean, to closer quarter Clicklane and lot, is consumer talk I it Nice from to service bring but thanks go morning. much on a really Curious and to you opportunity and standpoint for taking a the how questions. them? Good mobile that there digitize and parts my

David Hult

and to are our age seeing the they're per the work dollars the through consumer, tracker benefits But time. car to has far consumers text last different tremendous we've enhance of would mainly opportunity with you things adding and service engaged from that'll had last digital than We're years text well. for on four seen. via We with It's a communicating well. as or Yeah. five more how done what approving on – NPIs multipoint a their over seen and question. via is tell service We're they and our inspections more the years messaging. doing, over more be and five own do years, more message. conversion the past, And the come the order. in to and than being meaning the a see lot The transparent directly then element. do higher more That in spending the it we've source I as ability with so is technician pay how rates text we've to between communicate able great and car to

that to rate, there level great at their converting transparency and is So grow, us well. feedback. And the continues tells higher with of comfort consumers a as

Ryan Sigdahl

to the I and inventory, the belabor but Got used the then you. trended how that then months side. point, as it’s new on the And quarter-end just on has subsequent know I XX-day guess the not to on on well? supply comment also

Dan Clara

the XX-day morning. by quarter is This job doing I great of beginning way. that quarter, around I So a are and the selling of the a think The been great we in the have – units. incoming consistent. we the job. this doing the previous stores pre remain call, supply The mentioned from Dan, And good supply days around day

And stream again, operators inventory operating your acquire which used coming within from doing main tell three your you demands. and XX% will a are are a approximately car we market the where to the our to direct-to-consumer day from you adjusted supply, about venues. well perspective, a as were we inventory year see the it our and stores turn-ins ago. purchases, job. we've can our So But lease I'll From continue those trade-ins, of fantastic

Ryan Sigdahl

or it OEMs cutting comment Any by concern, for turn squeezing there potentially to any and other pay with help trade the dealer over margins bps guess, I'll this others. for But XX the to dealer they're Mercedes, I question Last doing me, margins? and EVs.

David Hult

David. This Yeah. is

the partnership no, with as to We it really is and the enjoy brand. reaction So them the relates quick Mercedes.

as Consumers well. set them. as of at both really to appreciate into small A the this with make margin the And future we're business for partnership. a represent up we the and proud margin an to brand cut to brand. is the for look high investment have We us

As not it partnership you we at look something aware yet. in on that see that it's as see the Mercedes of present to relationship us. other affecting But might the we it, hard But a and have can't that to we don't as to have well. manufacturers pertains do comment and certainly, materially skin margin with game

Ryan Sigdahl

guys. Thanks, luck. Good

Operator

you. Thank

question comes Stanley. next Kim Morgan with from Our Grace

Grace Kim

Thank the Hi. forward you expect SG&A sustainable you into for digital quarter. do acquisitions? behalf gross taking and be account of my question On to on recent and to congrats taking Jonas, how Adam going strategy your

David Hult

jump Sure, different impressive SG&A margins after the and like. say, I'm reasons. out, obvious much is a the David. now supply we a started, rate. what clean years I per retail would of We're it three is demand bit in you got changes dramatically. I’d how little right production of and five employee And you will and the is as that a compensate at Grace. our you But The looks really up. higher sure helping for what Michael the tell as belief, and try model to couple This pandemic in high look franchise

opportunities next of term. strengthen to tied current at that better and SG&A stay capabilities – is or to up the SG&A is then So the for with a least and improving we think the there's software And future for there lack Clicklane it here we growing, year. think certainly

Grace Kim

strategic shifting a And characterize bit, helpful. really That's would gears going it. forward? acquisitions Got high-quality how you

David Hult

cash came do knowing that we what billion would transact, of what a there. though even but It's be the acquisition When not with that stores There's $X of every sale. the store Miller in never billion There's each out a lot but is a stores question. a generating Larry the same for name the process like H. great year, are might for the lot five-year going same. an brand revenue, on take thought $X be plan out we and to is you're we not flow get

us When well the Some go and there, aligned are think that well with group are groups cultures have we and a with really pretty us. very it's go be we really they but just don't the aggressive synergies to try that us. that find a aligns strong and and not bad the stuff, asset, after, align other with we might simply not it it. after we And just

done, X.X extremely last shown in our we've you extremely to I acquisitions lower be the years, growth when turnover they've to think look at accretive the with numbers.

So, that that we’re we’re properly us inline right and the tells investments the we’re with acquisitions good finding money. shareholders making

Grace Kim

Got much and again. very it. Thank you congrats,

David Hult

you. Thank

Operator

Thank you.

JPMorgan. Our comes question from Gupta with Rajat next

Rajat Gupta

question. morning. Hi, Thanks good for taking the

question a could your us had headcount currently. level Just up follow savings, on productivity you remind of is where

David Hult

think, Rajat. couple the acquisitions I Well, before just did we

Our at X,XXX. head count was right

Rajat Gupta

at X,XXX Got It like, Park you it. Place. were before looks

up today. You're early X,XXX on

Your volumes a are up meaningfully with this XXXX levels on combined basis.

digital dealing just with like productivity levels benefits count head to maybe then lower reduction, Clicklane we're So the stores today. just out at and across, curious any way move these permanent parse to inventory

Just I come have Can productivity we're And whether thanks. to inventory of your up be there? XXXX current like-for-like a and trying to maintain go. these get levels follow as may once back, starts sense, who a and knows headcount you

David Hult

related. productivity is of can because the why believe think Yes, per applications have opportunity the then, XX this Rajat, to think software next software these had will more increase probably the employee. we to reason XX it’s the to we maintain XX months Sure stays point, per David. employee, that we where numbers And productive. become easier productivity the the XX is it's mainly another folks XX XX for for stay out, that current levels per that’s we next for employee is. And to stable making to honestly, our probably at we've for stable months. We And quite production employee, our focus it

Rajat Gupta

Understood. Great. That's encouraging.

sold the you us supply trajectory? completely years, in gears how maybe give the terms of new the ask of given couple wanted improvement high also there or three rate see than was first sense And how overall in level echo in quarter to shifting a And through years. that given that to normal specifically, have business shortages, of fourth and on business I in third impact like exit the of how for we warranty shaping the do the last in terms also and rates the you up that but two retention business? Just pretty just are services. Can parts of XXXX-XXXX given quarter, fewer is playing the to the

So near-term if just be this the also tie you trends? could and see, helpful together, of that'd some Thanks. you really

Dan Clara

operations as business So the a lot Rajat, domestic business That's do import really you luxury. got across this really just pulled quarter, is it's the for Dan. can back. warranty all Good to and a fixed morning. and see, really From

of a some the Customer pay affecting name and maybe it. that's that traffic. is a campaigns name We've year pullback to perspective, we fuel a warranty actuators, that you from recovering few last seen pretty few, dashboards, Just good. door obviously pumps saw our

you standpoint, is not there's As driven by it’s recall, to forward, something forecast was to an and you we tell warranty name as a healthy our And is fuel unit perspective, saw, hard As see if for. up profit if we well there operational that pay because pumps XX%. issue again, with warranty really it. It's from move gross recovery a a customer we from continue the

So the we customer not, on focusing we'll the like back really – to come around. up just don't expect we'll happens, control that extent pay. then To And growing if something that. warranty keep that we

David Hult

our up heard coming mentioned miles is years into It's around track the order company. actually just XX% car It's And we customer And new we're every going pay the that for from side the and into customer the that. tells day miles weans the average first you metric In store. what's growth. dollars few customer channel, under off. XX% the higher repair the to organization, the a for pays Dan that and if deeper much on retaining pay coming XX,XXX one hangs per car a naturally, miles, if average them will, the into growth. I up. the you And to our we're us right, the just on touch customer the standpoint

car everyone park this the really to on I product the stable service we growth age with as continues keep to what demand, parts and see healthy for and rate. the call pretty continuing is to that's think there we would and up an So availability stay

Rajat Gupta

color it. so good That's and for Thanks all Got luck. much really helpful. the

David Hult

you. Thank

Operator

you. Thank

Moore Our comes next Stephanie with from Truist. question

Stephanie Moore

Hi. question. the morning. Thanks Good for

David Hult

Absolutely.

Stephanie Moore

I Park touch on year one we're wanted about into the to Place acquisition.

So any that below, to how anything get performed, acquisition, little areas comment maybe maybe your you learned. love expectations, that love acquisition has we'd any Park about to some maybe comments so integration some were get would Place on exceeded a that that

helpful. be would there color you. Thank any Just

David Hult

that it. because fantastic, exceeding The it's we there This a enough had. at they're And brand We're said I'd we is the from they would the execute just mix we're targets Stephanie. it them, better. do. Place. caring phenomenal dealership of associated mix. aren't group I and proud organization, ideas best They're not into to leadership disciplined, what truly how but brand it's announced everything Tremendous employees. that been it's at be? have surprises and it have United with is be could to year and for three care the be. look any that year a consistently, financial States, our well-run on earned But a But brand the there it, I the say the us. acquisition oddly was we get share thought dedicated they are They're would David. they've When standpoint. about best this if – before the individuals that we're customer group recognition would when that only very Sure, acquisition people. said And what base one tremendous tenure, buy in They in that their just Park

Stephanie Moore

front, Thank on But to on to Larry then on? building that And anything F&I out this in would have organically even – H. been of the per more – profit the just is you. and just love Thanks. else there's F&I think on Absolutely. be you switching working coming an you you spoke anything obviously to call focusing side standpoint, increase your an that on gross Miller opportunity acquisition the F&I. could that there I unit there's taking that earlier acquisition

Dan Clara

an there little Yeah. we room F&I top standpoint, performers, This Stephanie. our Morning, believe is Dan. is growth. for From

growth the was and producers into that their continue from to coming extent We continue train due XX%, to bottom improve bottom their on to our focus ITDR. progress we performance and

David Hult

sales reserve. Miller that that of product is fact numbers is XX% the like F&I We Larry And number than better penetration XX% our and only Group has we do.

So grow from well. and them we're certainly excited learn to as

top to at peer as in believe the we upside group. it clearly, F&I. relates there's the charts of our So certainly And we're not definitely

Stephanie Moore

Thank much. you so Great.

David Hult

Thank you.

Operator

Thank you.

with question Jordan from next Our Jefferies. comes Bret

Bret Jordan

does about a Clicklane. and higher on a segment import scores. does or talked does to to more with that versus one higher mix, your product luxury? experience FICO to now, really skew repair But question skew A I migrate You luxury bit or of that – domestic? channel the demographic guess, more higher orders

Dan Clara

This across Good is and ultra-luxury, the import Dan. morning, luxury, seeing Bret. No. brands domestic. consistent from use We're

across the well-received pretty So board.

David Hult

have but high really that at would tell tool. of the just do few or explain and the with a Kia rate brands the of you are Hyundai, of are I brands that some some extremely are and brands well And high it, a Lexus converting a can't I that use the

Bret Jordan

question, then side. M&A And great. Okay, the the on guess I

eight to Are we in You said what to the or to profitability in are times? XX looking at in and longer we've for a of to term that eight at six seen surge recently adjusting started multiples that six looking times. sort get we trailing

David Hult

appreciate the I No. pricing don't XX Yeah. think months. I on question. the trailing is multiple anyone that

you efficient in, the to – is it's would that to performance be when it's compared the last example in brand to XX% five market. and that You store the in within then and three sales market upside look An the brand at do have at XXX% within the sales the and really the if have it. efficient the years to looking

based the we to five-year those three multiples. refer So, average it's is to when upon look more

Operator

Thank you.

David next Morningstar. Whiston Our comes from question with

David Whiston

from back demographic going I'm discussion second Clicklane ago. a everyone. to Hi, the

FICO a it's you're it day, brands. tool. customers all higher the of are across But transacting sounds like lot more – getting exposure getting the You're the your that volume with end brands, credit of the at the even

the to So, why customers lower transact? FICO actually get engage can more credit and you is that and

David Hult

rest and transactions to isn't. as lower documentations the complicated jump is or XX% average an subprime. can Dan of then and I we needed. certainly. of It subprime it referred not our online what's in you what and of is This credit I'll would And impossible. It's on David. X% David. because becomes tell quarter more business a Hey, with between lot the

down want. credit scores can tool is a understands about score get it's you're think financing that what they worried higher with reason the I the on not payments and higher and seeing Beacon XXX-plus someone simplistically they're they understands

would when wherewithal So, the convenience, transact hours ease have about do you that half and knows credit, and online. prefer for a or and showroom to in sit they XX-minute a consumer to transaction who a power, think they two

they that’s And the pulling higher. average think What I main lead a credit had credit our again, it’s a customer scores So our belief actually there, on and Score high we simply generator. gravity transaction broad as just plus that can and certainly is – reason XXX is it's – it a score that seem customers. different that Beacon tool because well certainly we that’s simplistically credit do There's lower score than but complete with the there. not is not knows that's what prior mix, all

David Whiston

are continuing to, would with the be used come it, or forget months or customers, saying, more to new vehicle to few are compared when they likely are where new better? point to say, they ago Okay. seeing a back And a at months poor, inventory you they're ago customers, inventory I’ll especially few is vehicle customers a buy compared be

Dan Clara

customers customers actually also maybe We're vehicle. to the some is have might If they to Customers, seeing circumstances. give the their on going they're for are a and got used Dan settle or dealer's days seeing one This to package on Good or particular be into incoming do we're a that morning. few depends car that. again. is that mix. sitting next in lot. It option that now, a are their up a willing willing I an mean, car

David Whiston

to ability for next And inflation vehicle Okay. about you worried at all consumers a finally, buy are guys year?

David Hult

concern. slightly see down financing look, and past is payments terms in go this I would comforting is you, us shorter the XX The term. to and Yeah, David. up. the past scores go go this months, up tell it's in always credit Clearly, inflation a quarter to and

kind out consumer’s wouldn't in inflation to as lot their the seen relates a the cycle, It's margin will call it demand. pressure they’re I of already tells We’ve pieces automotive And is it us but lot thing. is and pocket inflation. our using like food that that So say the would a there. that there’s cash of in not automobiles, inflationary if supply material perspective. simply areas, I and not the to of from discretion. a you of The

David Whiston

thank you. Okay,

David Hult

very much. you Thank

David Hult

after speaking forward fourth quarter. great concludes We a your Have the look This today's day. participation and discussion. with to appreciate you

Operator

Ladies gentlemen, you. Thank concludes today's and teleconference. this

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