Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to Asbury Automotive Group's Fourth Quarter 2022 Earnings Call. At this time, all participants are in a listen only mode [Operator Instructions]. Please note that this conference is being recorded.

At this time, I'll turn the conference over to Karen Reid, Vice President and Corporate Treasurer. Ms. begin. now may you Reid,

Karen Reid

Thanks, Rob, everyone. good morning, and

The Operations; our President Officer. Senior and As Chief Michael be at Dan Vice Officer; Participating afternoon. Senior available our available of call was of At is our Financial Hult, issued earnings Executive Vice prepared Welcome quarter will morning with Clara, President President for Asbury's up and later on remarks, will will David being recorded our call call. XXXX me questions and conclusion for quarter Chief is be Asbury earlier our Group’s today any noted, Welch, for release results investors.asburyauto.com. we questions. are and Automotive the and open detailing the fourth today's to follow-up fourth press and replay posted this later this site Web

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

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

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

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

XXXX Web We've highlighting Web on the measures investor updated measures any SEC also such year As GAAP posted results. our and reconciliations our financial site. provide an our comparable directly applicable of full quarter investors.asburyauto.com required by on most fourth site to rules, we presentation non-GAAP

David? my now hand CEO, to our is David to call pleasure the over Hult. It

David Hult

year for good revenue, billion and earnings billion $XX.X XXXX Asbury. quarter record in and XXXX. full Welcome We to up you, call. Thank was morning, XXXX year a generated Karen, everyone. $X.X our fourth from

the $XXX billion, year to for in share serviced cars in we Our over over by was a adjusted expanded increase at of sold hit over an of and We milestone and vehicles $X.X XXX,XXX $XX.XX. EBITDA we X million. number XXXX adjusted earnings XX% per million

All of our this long trajectory much larger even of a through is manage our term a effectively result at to size. growth

back were we a billion with revenue. XXXX, Looking company $X.X in to

We XXXX. have grown to billion in responsibly over $XX

to throughout going while XX.X% have efficient an We of refined discipline and maintained XXXX. been have profit Through of optimizing continuously our adjusted company. enhancing profile the operational in power our XX.X% XXXX from this the doubling and period size portfolio, and to accretive for gross and SG&A than we our more execution

million. by grew grew EBITDA $XXX $XX $X.XX, increase Turning quarter. million to in to now XX%; by increase fourth EPS revenue million, of the results We an adjusted to $X.X an gross delivered to million $X.X billion increased adjusted $X.XX by operating of to an X.X% profit margin; XX%; adjusted billion; $XXX and $XXX expanded our from

gross margin and XX.X%. SG&A adjusted profit of XX.X% was was a gross percentage Our our profit as

For XXXX end levels growth. our full times term at turn years, about our debt long Adjusted we decreased At year, the business in last $XXX which times of over speaks support billion cash Even the our been full $X.X $XXX of million we year X.X large recent of to net million XXXX, at robust flow, an December, of had liquidity. model. adjusted end the from a leverage has in increase we to end operating to of have generated X.X acquisitions the with diligent XXXX.

opportunistic with balance our Our us share strong buybacks. strategy. It enables and to acquisitions cash and allows to muscle deploy sheet flow, be liquidity or flexibility us potential

XXXX during shares million X.X repurchased $XXX for we million. approximately announced, As

board has discipline to opportunistic and Asbury. believe opportunities share accountable an shown make to our We held million. evaluate ourselves increase based that acquisition We we about for robust sense million Our that our repurchase authorization criteria growth. several $XXX approved continuously for on $XXX to have last acquisitions the

North December, In nine continuous stores Carolina as represent million. These we estimated part divested revenue stores the of $XXX optimization. portfolio our of an annualized

are We maximizing to opportunistic, allocation capital thoughtful returns shareholders. regarding strategic and and our our our

relies including our guest commitment offering team also among high centric model providing unique of benefits, to to best teammates which in is in our our members our equity a Our by level awards on stores, class peers.

were program to of volunteer team hours up Our back XX their up nearly communities have over team as giving to member. year hours to also XX% volunteer year our members been off time per

of Finally, I Dan? over a and It like performance. dedication our to incredible members strong our XXXX. guest best discuss start hand team hard thank Dan work but my your to a all year you. of and to provides is great experience an and to operating Thank business, for would that the performance strengthens now I'll the is come. call the yet to

Dan Clara

extend extraordinary stated Thank like and all Starting I in with would same my results you, to good everyone. our XXXX to pertain otherwise. will to the their store to experience. commitment performance team remarks new exceptional David, delivering morning, members thanks an My also vehicles. consistently and unless guest for their

day quarter supply. a XX the at $XXX ended inventory vehicle which represents new Our million,

XX Our import was constraints, domestic volume being day over supply our new new XX continued we XX year if days, segment Even luxury by missed at flat year X%. grew supply by with vehicle days vehicle at revenue fluctuated while days. at and

per New average gross profit $XXX the per vehicle quarter. decreased from year

profit new increased a or XX% we basis, full $X,XXX over On by XXXX, increased by the to X% $X,XXX year. for year full vehicle it PBR year year. gross the For

down vehicles. quarter, the X% from was of expected market $X,XXX profit revenue for the gross the per Turning was to to decrease per retail the Used year as Used used persisted. per quarter $XXX retail quarter. a the choppiness vehicle year from

represents supply. XX which $XXX quarter at million, day Our inventory a vehicle used ended the

quarter, from the another from the to to total Shifting delivered Our XXX%, basis yield a We prior an quarter. year $XXX used fourth the $X,XXX, ratio increase for vehicle compared new PBR F&I quarter. by an per to quarter year year quarter end $X,XXX. on vehicle with our prior of $XXX over XXX% year strong decreased F&I. down to front was In of the per

Moving and service. to parts

Our service its by parts and we the revenue built with profit growth XX% upon in momentum and gross increased pay Customer XX%. revenue XX% a expanded its quarter.

on Please to an for turning are Clicklane. store Now Clicklane, all note we basis. reporting that

this As fourth increase quarter, the quarter. year-over-year X,XXX which and over last was XX% time included in first LHM which since We record an through previous Clicklane XX% Stevenson a a over the the sold of sales quarter all a in rollout. our full increase reminder, was best, vehicles

with from revenue fully For the we full generated via approximately our over $X.X billion sold online vehicles XX,XXX year XXXX, tool. transactional of Clicklane

our by to all to We choices Clicklane the let of which and and differentiator This informed a lenders, optimized give customer's In protecting finance location is bundle expect that to best vehicle, generate Clicklane the our A the tailored for allows select to the fourth quarter, F&I menu usage. the XXXX presenting the them select for offerings billion are the them. Clicklane suggested across stores. to products, for power marketplace, for to consumer their we be works are X.X asset. $X.X key credit different with from in the XX which consumer the loan revenue unions and banks best

in finance adding also features, the are integrations new with XXXX OEM half bring including We captive first in of functionality enhanced to arms.

PBR customer front customers credit from an [X.XX], those yield. for time of our of some $X,XXX, that delivery received an and XX% miles, XX% During assistance. equates our a approval to Clicklane transaction cash which Asbury's to X us score was for of roughly additional remained average dealerships higher the distance the our approved The XX% deals finance quarter, Clicklane transactions stores. credit while an that PBR require with average F&I end dealership customers were offline which giving opportunity instant of to XX.X line score minutes applied network. were increased and XX quarter-over-quarter customers Average the financing. over $X,XXX leads. seeing incremental customers deals. for prior quarters, of retain rate full The is for normalize, than XX% than front won't the fourth the $X,XXX levels total of Total see our service customers are at were and at average with results. new internet we strong inventory our department. in early we are Clicklane end of to while of converting until double in And potential minutes traditional more parts

builds most among we imports XX% experience and top luxury. return domestic with we is retention. become the know XX% individual have In journey to automotive who the were stores for guest vehicles, Consistently most for exceptional clients important level XX% and amongst differentiator delivering reward rates provide. centric conversion at an guest service our of executed for in retailer, our us loyalty the we Our trust

I call discuss will now financial over hand to Michael the performance. our Michael? to

Michael Welch

analysts, some Dan. for provide you, financial like company. our highlights I call, Thank and members team To on would to other participants investors, good morning. our the

not compared for million financial Carolina related our fourth investor the $XXX year, site. share. For gains and North release net significant of presentation to and increased today net primarily on materialize divestitures to our supplement of to additional of netted per to to our that quarter million of performance $X.XX. XX% the on and all EPS quarter, $X.XX a net Overall expenses details last adjusted fourth adjusted income on see $XXX.X financial stores, acquisition the and for Web to did increased related Adjusted million, income which excludes diluted $X.X our press please the quarter XX% dealership XXXX our

quarter for for expenses these million of XXXX acquisition received we financing net $X.XX reference, $XXX the diluted fourth share. of expenses For acquisition $XX.X proceeds per divested million sale stores. or Adjusted the excludes and cash income in

versus We our rate to XX.X%. XXXX. tax expense XX.X% be XX.X% year the was effective tax in XXXX approximately for Our full anticipate

we generate flow cash adjusted million. of XXXX, operating For $XXX

we purchases, for spend real full on the million approximately estate Excluding capital year. $XX expenditures

for XXXX to be related about we replacement $XX We to plan million, the continued of approximately lease properties. acquisitions. this our Of CapEx XXXX is million this to expect $XXX year as related full million $XXX to

million TCA by the of TCA generated year. anticipate the which of for income, full included the to income For made TCA stores our a million XXXX. of pre-taxed million remaining pre-tax of We $XX of investment net rollout end quarter, $XX products $X income.

we contract. GAAP, to segment. TCA receive the to sale continue at in deferral sales income To are we the the the and products life TCA commission comparability, the time For will of that such for reflect maintain of dealership of over of segment the the for defer dealerships record required received commission in the

is of over transaction the recognition the the of timing and With of deferred the higher of amortized overall ownership profitability income the TCA, life while the is contract.

to last with expect Due to XXXX. impact deferral the these generate rollouts, of negative store deferral two to income the associated income of for to three $XX expect million We years. the we pre-tax TCA

Our shares billion used line revolving we credit strategic net to balance our strengthen We goals. generated balance our care -- availability robust the monitor potential already acquisition sheet end ratio XXXX, the as dealership facility. repurchased start our net end return lower of strong sheet continue times our market the XXXX, auto, we our would adjusted comprised million. on leverage look to cash liquidity, capital to were strong, portfolio accounts total approximately from share of $XXX down enhance at we of end and our robust able cash as with and approximately we offset times X.X proforma of to both cash and in are quickly of ratio We'll Also, $X.X stood flow year, generating for at opportunities cash, provide have to XXXX. at will Since year million the believe flexibility plan excluding purchases. and there floor the by our X.X after large and X.X that flow through achieve leverage the remains M&A we of

purchase our As million. to of David $XXX mentioned earlier, $XXX share million increase to an has authorization approved our board

a at Asbury, Finally, in also I members not and only our join strong year. to strong for like quarter thanking but another Dan David would team

drive and Your excellent dedication our hard work performance.

hand now providing David? to will I call back some closing over the David to remarks.

David Hult

you, Thank Michael.

XXXX. well supply and years positioned fixed be to market As operations of strong we look where XX day our continues this are a to will the average car over believe XXXX, we for we the in build. begins anticipate old is Also, to age continue we

uneven including range. are recovering day agile SAR supply the We one for believe in million conditions, cost planning our a if a with can we adapt industry. management We with expense $XX heading business our changing into disciplined for structure XXXX, to and mid the

to and to and our well cash for question. buybacks. it both call We'll acquisitions This strength now to to your us comes sheet flexibility and and well streams our it the us when the turn the revenue take Finally, comes remarks. opportunistic Operator? prepared balance our diversified when robust to operator flow be enables over have and concludes

Operator

[Operator line with Instructions] the from of And our Daniel first question Stephens. is Imbro

Daniel Imbro

this David, about XX, I side carrying inventory want vehicle reporting, started earlier the industry. levels. OEMs lower Obviously, week, start on historical talking than to XX of new the days large

maybe on inventory into is update the great. think you And to you slowly of light are trajectory building how evolves conversations going that think the us next Your about guess your with the I OEM through you on be that'd XXs. inventory? up how how mid and shed year, partners? could Maybe ‘XX do

David Hult

fourth the quarter. with start I'll

are while day quarter, our volume in stores had was was largest luxury grow import ability day Our and to a because governed so the that where it single digit deceiving, our was what supply numbers volume really little the supply, there.

As our in pipeline. walk inventory XXXX, coming -- a have of XX% so still we're pre-sold, it's robust we over into still

be it's a all for going to think year I different manufacturers.

going with sooner back to are of supply, and day lot to most a up some them some it. it'll think I catch come the to take year

And down think it's it to talking really amongst have. that which you're about. brands we mix come depends of peers ourselves, I and So the going brand upon our to

to domestic. a with slower a anticipate it's of going as recovery relates year another we then in say half and Honda. So be it and But the uptick to quick first the Toyota Stellantis,

Daniel Imbro

think about have inventory I how you think this GPU sequentially. ability as through new expected we and about relationship out think shake as of obviously, to I mean, the inventory inverse improves that the learned And is you relationship, than better barely implications that, price most the do GPU declining year? what with that quarter,

David Hult

prediction quarters conversations difficult What COVID I'll navigate so million to SAR, $XX few does less have last the a SAR. issues I'll XX standpoint a from that. last you, and say the levels, back supply it tell few $XX have and don't when years just chain But a been on. all we're the see I ‘XX forecasting to been than have it get between million

up lot spikes pretty that when their at the in OEMs day margins look well. you can are history, over have You back mean We SARs think a certain below from but doesn't million, $XX have time. moments of hold learned won't supply,

it'll Asbury for us. day by inventory I margins be as I think forward incentives supply, the think we car for anticipate car will to going year, margins it's we XX of upon well. average pretty look again, be bringing a they've not is to hold been up we new the does vary age certainly real day a pretty year It And comfortable OEM depending supply. gangbuster with But with good a at whole, not we think as back a large they'll come to years, the over while assume incentives. market. If because on

Daniel Imbro

Michael, last maybe jumping sheet. then balance to for one the And over me,

debt. paid down You lot a of

update Any ask for active color. I the you capital week. but net going buyback forward. a I was encouraging portfolio think we also acquirer stores I to in of update capital you in back the divesting XQ. should last done move use the were just How there forward? guys with are some we mean, we divestitures, to allocation market? about as think being just Are on wanted

David Hult

of the that portfolio script opportunities the an Michael to said new divesting necessarily due partly at of stores the stores highest from on materialize. quarters. of performing $X.X that we're Carolina not North acquisition of trying with start leverage had North of jump referenced in. been then And coming and for our I've the have. acquiring proper. to we materialize, that maximize was always be maintained contract divestiture Michael that already kept stores in million we Carolina and focused didn't to under our many acquisition and balance We're I'll sell the are stores. and it on accretive in can it flow that that might our had The the sure we cash in and assets didn't things our our level. anticipation our very platform to making cost When we

Michael Welch

capacity, lot It with $X.X of a low a leaves liquidity very so ratio. us billion and leverage

So of capacity this that plenty we per share if capital acquisitions have year or buyback. if materialize to deploy

for deployment. a XXXX in us leaves So for capital good place

Operator

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

John Murphy

of land? is kind important. you GPUs just year corollary through ultimately variable gross, I how see Maybe linked GPU as a course it's sales we much vehicle kind they comes And to compensation How because you go might natural little SG&A gross down also the meaning the there's of that, pay dollar where question, the in progressing over but a to is your as David. new a as sort And that this and reduction this to of fair of time? on that unfair folks bit know do follow-up of to

David Hult

brands, would complicated, But every with I of predicted they to close been you, say, than levels. lot were things it's that I to I'll significantly day quarter, year in the Well, mean, our higher there's tell supply, margins the got back XXXX. right? And normal fourth of year no brand one the a in John, So one's coming. domestic on. what were what going gross unique the

in certainly, prior in you our it's from will results. tell But that significantly were margins be confidence fallen can have year off ‘XX we higher ‘XX. So than they

of car really when it's they think But comes SAR going above going all be each $XX be pretty We it'll and million back. healthy. be be new the But a good stated, of come to we it's things below year it'll brand I've and story we think because a particular a to So margins. well how ‘XX. back think for

Michael Welch

the And SG&A side. John, on

commission, lot generated, in of You're the lot stores with the natural so SG&A in is of off a fall tied decline. kind there's a in fall gross the profit a match off profit right, and is the any to the pay gross up that of to

David Hult

I'll The bring new dollars you're a up us add, cost John X of number It about used to do well. and I'll talking other transaction. as thing but

your So volume deteriorates really or with to chase growth lower SG&A. hurts

volume each fair chasing for a get necessarily to not at while as catch asset about an not up thoughtful cars return us. trying very we're but of to letting and looking really these So it one aging

John Murphy

on then And Clicklane, were sort of of think I things that said two you opposite. kind

You said, then but your I within which think indicate transactions that delivered in new were customers of they're you were Asbury, of already said XX% to miles, XX vehicles the could market.

where XX So correct, miles, that it maybe curious another coming Clicklane customers the Was something are I it from like Clicklane? coming just going where incremental to just they're And in opposed incremental. another like misheard are trying have as the sounds were you're maybe. from. here statement, sounds just they're good there, potentially coming folks dealer within I'm revenue from, to up from bump brand to because if a XX% these I'm understand

David Hult

do answer my I'll John, that. So best to

will to sell please that the catches these That made is with fact the you believe At little occasions. away, were take a years the XX come or instead on follow that the it's showroom. -- XXX dealer But other what the the us. as customers in that love business are market want off we a chose point they certain parts of number tools. business, that really car service were being of we dealer need brand incremental and We groups a of that business and XX% doing bit fall up the some transact miles a transactional relationship retention, the because into. We local. But they ease that to over don't If with to leave will local we're with over doing online sitting means able transparency to that the up, decision, it. to

and try So rooftops within XX focus a our and we around really radius Clicklane our do on transactions we that mile space.

they meaning were that us, to with other local competitors market. we that business against customers in new doing XX% So compete

John Murphy

a in ‘XX, So So that's alone. on X% in that you saying increase XXXX. in X% about revenue coming ‘XX mean you're mean, your for big $X.X from then. kind Do to It's remain Because of XX% Clicklane just ‘XX? that's just follow for Clicklane a I of billion up almost I incremental expect incremental, like right? incremental and to that's a that year-over-year base $X.X $X.X shy billion to billion a statement.

David Hult

quarter. store a Clicklane timing. didn't Clicklane We full numbers We've of a have conversion on them most them right. a up in couple software get added the and it Some takes on a the Stevenson LHM the market Anytime We in year. fourth years. for the year it's to been of rate goes Clicklane, or

for SARs we're you're some at going to as incrementally And up up, new assuming experiencing day then So catching conversion and to We're tool going sales higher our increase which a the stores points as increase supply the of you the during based. to added. just a have well. it's We're logic going going the little year, with the to is bit. sales

two rather in you and spend If from a very that hours purchasing showroom. spending a would your you car room, the than half XX transparently do living could minutes

throughout the full year. increasing year. and a other The legacy on it the is being the store the slightly So company conversion additional their if $X.X will, conversion improving for on acquisition rates billion, full is stores you new

John Murphy

performance. you I but of appreciate pretty impressive billion incremental, is question mean, is is $X.X I it it so But incremental, humble, being a it and timing. it's

think Just leverage, the the net you I at of lastly, times X.X ‘XX. guys end you you were on said at

was of to should if to large to could where there that available another and came where think about you the that that at ‘XX. we target times want end You've deal been at you? X.X How go

Michael Welch

that if kind place margin So we comfortable, if, of there, probably the in times but environment. ideal X.X is at right three we're this had something our deal times out

David Hult

say, things acquire are we're that don't John, of we us things. of at. would we even XX% to front put the in trying aggressively look I not And

that for us. upon We are really accretive acquisitions very at disciplined looking are

to going certainly So to of benefit our the to hit not more add value we having certain it's things shareholders. a target, we're to portfolio acquire important that feel that force the assets

Operator

the next Sigdahl Our questions line from of Graig-Hallum come with Ryan Capital.

Ryan Sigdahl

on somewhat to you I in vehicles, stabilizing as January. sustainable so kind two, be used several that's seems months look here what pricing One, you of year? in out you want the are think over this to do then think next focus do trends and

Dan Clara

We are seeing the use car valuation and pricing stabilizing.

We also go credit. approaching selling also to for a and term, comes keep the are in mind season better what we with of lack our a tax

an So along. capacity, going standpoint. some big we QX that now but stabilize. depreciation still we QX to has definitely coming still the valuations that from saw in there's market believe the that feel But we stabilized some be pressure into And will still availability

Ryan Sigdahl

for for then my attach if on interest rates, in either follow-up, curious that's financing? And just the on impact or having not rates any favorable

Dan Clara

that asset from seen it of own any on car the But when an product, major we a protect put concern Obviously, is at the you add the when F&I to whatever try nation. want is a payment seen you not to level. store whether negative to it is there at look monthly have a have you not across the We average always pressure concern payment. with does impact. impact And

lenders, with and captive on but unions. we our the we only with was lenders of that local deal not credit things also the I loan have call institutions marketplace. deal One mentioned our We

our able to the out flexibility consumer. best provide be us gives to that there So rate for

Operator

Our with Jonas is next the of from question line Morgan Stanley. Adam

Daniela Haigian

Adam This is Haigian for Jonas. Daniela on

while name you're the have you So Tesla with necessarily some of or products. all comparable might so doesn't with in cut, the selling, some compete out came XX% plates a stores that and price

So time we're prices, real demand traffic saw those cuts? or you any whatsoever after see curious whether showroom to impact on

Dan Clara

And down do that we close rates, retailing The paying below fresh cars and were standpoint the was it were quick current emphasis We the what news from cases on inventory kind real have to pricing was good adjust. was stores. most condition, it a XX. Tesla they saw sure to announcement take when able thing we of adjust across first cars. a market of we to did assessment brought The in of the that make those the a

impact system good I on have strength selling EVs respectfully, end believe the that EVs, for speaks and distributor far the the system that we sell, consumer. the we a of the that As integrity to as being that and within franchise just

David Hult

seen the impact any come of time, to out say repricing because sales Tesla. won't of to also material point some as Not of haven't EVs We but any on incentives anticipate in with at we well. the come year brands, our it throughout

Operator

The next JPMorgan. question is Rajat from the line of Gupta with

Rajat Gupta

assumptions a moderate, when think based follow have to So like trying drop I the Just like general Is the decline up. understand how this GPU? to and that kind we about SG&A follow into understand side? looks as through XQ profit should new there to rule particularly And just from and looking we a think down seasonality thumb vehicle comments. but about on XXXX I up want XQ of of whatever $XX make GPUs expenses on on to gross on were on typically, some million was million quarter-over-quarter a quarter-over-quarter. $XX

David Hult

efficient. have history we productivity employee a stores say, for really and of working getting sale. legacy at would down very being I We've at cost years disciplined transactional our per cost for and our been

of the acquisitions naturally standpoint. we level from are same that our new All aren't an efficiency at

which believe is we we in slight the look work get potential us. stores, that we really have a legacy for to tailwind in efficiencies ‘XX to those all So

Rajat Gupta

or key and should should Curious And the of a and maybe supply you And years. that on how is is growth has inflation, the segment growth strong terms hiring? key we contributor services, business how maybe fourth and it last And are this about about in puts to likely some how year? product been cooling be think think parts technician for with couple to for the planning to quarter. pricing growth, XXXX? we improving growth also particular again here in still What limit

David Hult

we never have can always enough us, like I assume, more. and use most we techs

you're I the the to more of seeing has aging think the with dollars car. increasing what do with

more every As cars go work need costs they up the age, year. certainly parts and

least ‘XX So as growth as very what as at in standpoint, don't we similar look far ‘XX we from We were point, at to a growth. results think this it's see it our look a slowing the at going we don’t believe certainly are rate have but time that on People positive onto off. be parts longer. holding if and down an their cars will or over And increases that'll impact leveling impact. jobless to service,

Rajat Gupta

one. last one just Maybe

still plan, reiterated in EPS backdrop. we're the used a car somewhat $XX demand You weak

mentioned $XX.X XX% would seems like new the it $XX, EPS a You SAR, million from XX industry, in and pretty to both used. getting it recovery need sharp growth, still

earning what backdrop where tighter confidence to targets? happening is in are higher What So that for you like $XX? rates you still year in this outside cars due supply to those to else it to that reasonable And in see confidence path or get this an don't of prices high assume are decline gives used moving see high, you you term. to Clicklane, gives that before the current again, medium

David Hult

the it's are market for We please groups really a the back. that large that's stores only piece, XX% of If market ourselves. acquisition, owned I think of miss by XX% like that are that opportunities come

acquisitions. for potential of plenty there's So

We also the the think naturally to will over SAR next in years, time grow. few continue

great if still too the recover, -- is all to ability opportunity SAR, acquisitions software with over time, so Clicklane We few more next to out, software. Fast get efficiencies ‘XX, but and just better the years, to don't we to the much in forward the growth think the three there. of next we SG&A aren't and even and our make combination potential between that over still and time and valid. the few with opportunity the opportunity SAR the doesn't call efficient, and lower acquire your see acquisitions, growing years say become the those get point I SAR tools our years stores to with give more things and So with our of the wouldn't think us next early it's we use over

Rajat Gupta

million $XX.X to and year on might SAR that your this relatively and not still with XXXX, parts kind on just Is that growth, maybe earnings strong backdop? consistent But GPUs. comments it assume services, of decline safe

David Hult

know, a question. fair You it's

interest plan come have you on costs, that'll naturally. your things floor the rates, have you You you up have different

per Your day's as today, as your supply. healthcare for And sit don't guaranteed year, timeline costs I with is go every how have employees each go up here a well. so I up to cost single ‘XX recover going manufacturer

sit here it's I that the hold that will but we margins three years. throughout year, been altered. odd As car an new up could well mean, truly we the be today, last believe

margin seen you've years. we think side, have car ‘XX you marketplace pretty good, used because few it's in fall going last back where the don't still the but supply been to depleted it's levels, the On issue a

So not year, was sit we it'll off prior think we it as far quite be as strong may while here it today, we be potentially of as think don't XXXX.

Operator

line question next of Jefferies. is Bret from Jordan with the Our

Bret Jordan

versus sort volumes? what of parts and you the was On the price versus quarter, in ticket service, could traffic about talk

Dan Clara

by RO pay, an Part of was from customer down increase segments, domestic count. count quarter. maybe price, it just different saw down and flat, it also every but saw at, X% was the you in an When the segment throughout our an look break increase, RO we relatively

that. we're So for it when schedulers, service lack we're so appointment the the term traffic can we that and when we benefits into us. schedulers, the of a wide and better the keep seeing them And it our results seeing stores online not a customers open benefits coming out of

David Hult

really thing point we're one we a of -- a simply number we Bret, a the with out, we because efficiency rooftops year our doubled ago, and a and would same we to company within have small now spent shops. have stores legacy the in up that years almost And production get year. half We I opportunity all to on And working relatively acquisitions. those

So we over our next got efficient great teams business. years tailwind those nice growing becoming that with a couple up at the think we working more markets and

Bret Jordan

what smaller or more a that production buyers SAR I afford think forecast be in do natural see group you it normal the constrained? of XXs. constrained this just you environment? on then available, puts demand SAR -- higher with or And mid is of and vehicles able guess, Is is takes, your were of to sort if the -- about when

David Hult

our a one it's pre-sold. the it's question product the made tough of is to ask I to Yes, incoming over and XX% answer. comment,

number ‘XX standpoint. nowhere a to You were that you go back levels, near from pre-sale

tells job years XX% an the -- opportunity, average of them to with supply it So EV the last car XX ground that to not million growth. the market. cars couple production before the record, a $XX XX There's that working selling we and converting pre-selling have a we being still you that continue And issues good. that years resilient an there's inventory a age and hits able get your because there still pretty OEMs age and still plus be of and because average that vehicle again, won't to the over XX of We demand of of launches you purchase still creates opportunity constraint being think out but to back is the there. you that a over of don't I want are lot on of vehicles have lot months. be SAR, R&D steady broken next don't availability, think to

could shift point. change So Certainly, that a of the We're it's and dramatically. at seeing combination not demand I of this things. drops lot a where think just economy

Bret Jordan

is standpoint think sort outright a step not just OEs topic one lately? couple then purchase something to drive volumes, as that question that challenging. of an Do to affordability more be has last obviously topic you And but on or been likelihood there's leasing from and quick the in a leasing facilitate not years, more in hot the gets

David Hult

customers certainly And been to I depend time hasn't has luxury over because great. and happened important leasing retain was We the the think to the it's by been going it them returning. the because from out selfishly, availability. retain incentive is be to the it in hope But us to manufacturer first there really leasing product is it. it's brand brand, your what so. because their Yes, earnings, available as they within hasn't naturally, to been important When upon a would segment leasing benefit the and which That it's the business for There that to leasing, in brand. retained way get OEMs, feathered into been we hasn't well. back

Operator

from line is Whiston final Our of the with question Morningstar. David

David Whiston

to had there going import was import high vehicle. of more as but the the GPU, had it pricing only Toyota, fell there, -- vehicle David, Going the some opposite in preserve of a categories, percentage most talked tight looked volume? looking category, you’re three given unit you Honda surprised looking just the that wise, every at like growth, want most. imports, back just about vehicle And But new in wanting happened to I the because you new to at the little inventory, out by that get not

David Hult

that it I out wouldn't plays say way.

for have The supply strong margins, still the off. But in as You that that lot with falling think import we $X,XXX as your had a on of the a a get within I single segment. number so point far don't vicinity the profit very brands or think imports. day major extremely we high brands gross is was that's issue.

day point healthy to Honda over competitive and Toyota margin having we're within a that falling be a like segment we I generating other day and have higher equate that, SG&A very this so the a again, efficient higher supply. see percent. But to as a market. that you maybe X% going brands don't can have margins. some and But will year, supply high import with that it's your operating again, still So see, margin to still there

David Whiston

shortage, issue I plus Honda, absenteeism? time wide. for what with is it do COVID driving industry and their chip it mostly? I how and now are And is it still some mean, giving you you think mean, has much Toyota long been a inventory an communication they purely chip

David Hult

Look, it's day brands. consumers, conversation for to frustrating it's then we it's about our the it's as in they and well represent can. these fortunate us as honestly the them. of see could frustrating with what half to really first to XX We're and typically talk potentially we'll see year. communicate quite us, And there's what frustrating to best They increment in

supply unique things from [targets], they going don't, what's time. impact those all lot hit world negative A sometimes a depending up on, at with chain over come in a parts it could issues. upon come and moment have these they Sometimes of the

David Whiston

that end maybe still you, know And interest you the strong. how point? curious demand become But just year, I back said of at worried are high rates issue an

David Hult

this basis raises at times think two only the it points, way. just If fine. XX we'll we more be answer can or I Fed one

our or for the on. COVID got to belief launched, going that have did war would If I happen would in something marketplace think the came it when there alter another to what's something if in levels like to worse, was extreme significantly catastrophic out back it automotive us there -- today dramatically that change here with we'll than we retail, other most discussed, industries, the like throughout things. But believe age think already job of the year. be market, better as won't things park, affected it’s we've we fare all not we sit car the

David Whiston

you speaking, size. mind deal comment significant through I acquisitions, as something large assume a smaller But size? And that like you significant pursuing us than a or Miller's that on know on specific Larry you just fell deal. And tell can't in just when that still acquisition, don't should referred to we're one you a more, generally it's we if acquisition significantly

David Hult

I'll rare. this they're try at and best Most one the size aren't navigate LHM, I can. the of opportunities extremely

So and acquisition, size This would've the Miller. of the It the but you probably not one two. middle have size rooftop very was been XX somewhere a everything in between of rooftops. healthy

David Whiston

Thank it. appreciate I you. Okay,

David Hult

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

Operator

your concludes conference. you This participation. today's Thank for

You time. lines now disconnect your this may at

Asbury Automotive (ABG) 2 Feb 232022 Q4 Earnings call transcript