Asbury Automotive Group (NYSE:ABG) Reports Record Q3 2025 Earnings but Misses Revenue Estimates

Asbury Automotive Group (NYSE:ABG) reported financial results for the third quarter of 2025, delivering record net income but falling short of analyst revenue expectations. The automotive retailer's performance highlights both operational strength in profitability and the challenges of a competitive sales environment.

Earnings and Revenue Versus Estimates

The company's third-quarter performance presented a mixed picture when measured against Wall Street forecasts. While profitability exceeded expectations, the top-line revenue figure did not meet analyst projections.

• Earnings Per Share (EPS): Asbury reported adjusted diluted EPS of $7.17, which surpassed the analyst estimate of $6.89. This represents an 11% increase from the $6.35 per share reported in the same quarter last year.
• Revenue: Total revenue for the quarter reached $4.80 billion. This fell short of the consensus estimate of $4.89 billion, despite marking a 13% increase from the $4.24 billion reported in the third quarter of 2024.

The divergence between strong bottom-line performance and a revenue miss suggests the company effectively managed costs and profitability even as sales growth slightly lagged expectations.

Market Reaction

The market's initial reaction to the earnings report was negative. In pre-market trading following the release, Asbury's stock declined approximately 0.8%. This price action indicates investor focus may have centered on the revenue shortfall relative to estimates, overshadowing the stronger-than-expected earnings performance. The stock had been relatively stable in the weeks leading up to the report, with minimal movement over the past month.

Operational and Financial Highlights

The earnings press release detailed several key areas of strength and strategic progress during the quarter.

• Profitability Growth: The company posted a record net income of $147 million, a 16% increase year-over-year. Gross profit also saw a significant rise, climbing 12% to $803 million.
• Segment Performance: The new vehicle segment was a primary growth driver, with revenue increasing 17% and unit volume up 13%. The parts and service business also showed robust growth, with revenue up 11% and gross profit increasing 15%.
• Capital Allocation: Asbury continued its share repurchase program, buying back approximately 220,500 shares for $50 million during the quarter. The company had $226 million remaining under its authorization as of September 30, 2025.
• Liquidity Position: The company maintained a solid liquidity position, reporting $687 million in total liquidity and a transaction-adjusted net leverage ratio of 3.2x.

Looking Ahead

The press release did not provide a specific quantitative financial outlook for the coming quarter or full year. Consequently, the company's forward-looking guidance cannot be directly compared to analyst estimates, which project Q4 2025 revenue of approximately $5.07 billion and full-year 2025 sales of $18.48 billion. The absence of formal guidance is a neutral factor and does not inherently explain the market's reaction.

Conclusion

Asbury Automotive Group's third-quarter results underscore its ability to grow profitability in a dynamic market, as evidenced by its record net income and earnings beat. However, the revenue miss relative to high expectations appears to have tempered investor enthusiasm, leading to a negative near-term stock reaction. The company's continued focus on strategic initiatives, including technology integration and a balanced capital allocation strategy, will be key factors for investors to monitor in subsequent quarters.

For a more detailed look at historical earnings and future analyst estimates for Asbury Automotive Group, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available data and should not be relied upon as the sole basis for investment decisions.