Asbury Automotive Is Trading Lower On Heels Of Q1 Earnings Report
Portfolio Pulse from Nabaparna Bhattacharya
Asbury Automotive Group Inc (NYSE:ABG) shares fell over 3.4% after reporting Q1 earnings per share of $7.21, missing estimates of $7.76, amid a tight inventory market and volume challenges. Quarterly sales were $4.201 billion, below expectations of $4.264 billion, but revenue increased 17% year over year. Gross profit rose 8% to $750 million, though gross margin dropped to 17.9%. The company also repurchased 240,000 shares for $50 million during Q1.
April 25, 2024 | 4:01 pm
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Asbury Automotive's Q1 earnings miss and subsequent share price drop reflect challenges in the inventory market and sales volume, despite a year-over-year revenue increase and share repurchase activity.
The share price of Asbury Automotive dropped significantly due to the earnings miss, which is a direct result of the tight inventory market and volume challenges. The company's efforts to grow same-store preowned volume and strategic investments are positive, but the immediate market reaction to the earnings miss and the decrease in gross margin highlight investor concerns over short-term profitability and operational challenges.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100