With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Industrials came out on top this year, with 22 companies featured on the list.

100 Fastest-Growing Companies

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

The Atlanta-based car dealership operator went up 23 spots on the <em>Fortune</em> 500 this year, as stimulus checks and a migration from city to suburbs sparked a stellar year for car sales. Asbury reported $254.4 million in 2020 net income, a nearly 38% increase from the year prior.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-428-Asbury-Automotive

Revenues rose 5% in 2019 at this Atlanta-based operator of auto dealerships, as consumers bought more used cars or sought to refurbish the vehicles they already owned.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Asbury Automotive Group is one of the largest car retailers in the U.S., selling and servicing nearly three dozen automobile brands. As of 2025, it operates over 150 new vehicle dealerships across 14 states. It also operates an online car-buying platform and a vehicle protection provider. The company was founded in 1990, but has recently embarked on major acquisitive growth with the purchase of several billion-dollar automotive groups, including the Herb Chambers Companies and the Jim Koons Automotive Companies.

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Q4 2024

Asbury Automotive Group (ABG): Company Profile, Stock Price, News, Rankings

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Asbury Automotive Group

asbury automotive group

Greetings and welcome to the Asbury Automotive Group fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Chris Reeves, Vice President of Finance and Treasurer. Please go ahead.

Thanks, Operator, and good morning. As noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's fourth quarter 2025 earnings call. The press release detailing Asbury's fourth quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Hult, our President and Chief Executive Officer, Dan Clara, our Chief Operations Officer, and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open the call up for questions and be available later for any follow-up questions. Before we begin, we must remind you that the discussion during the call today is likely to contain forward-looking statements.

Forward-looking statements are statements other than those which are historical in nature, which may include financial projections, forecasts, and current expectations, each of which are subject to significant uncertainties. For information regarding certain of the risks that may cause actual results to differ materially from these statements, please see our filings with the SEC from time to time, including our upcoming Form 10-K for the year ended December 31st, 2025, any subsequently filed quarterly reports on Form 10-Q, and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures, as defined under SEC rules, may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. Comparisons will be made on a year-over-year basis unless we indicate otherwise.

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

Thank you, Chris, and good morning, everyone. Welcome to our fourth quarter earnings call. As I said in our earnings release, 2025 was a productive year for Asbury. We grew the size of our business both in terms of revenue and in the geographic areas of the country in which we operate, acquiring $2.9 billion in revenue. More importantly, the composition of our portfolio continued to improve through strategic divestitures. Because of the discipline in running our business, we were ahead of where we thought we would be from a leverage perspective at 3.2x versus our forecast of 3.5x. We deployed $186 million in CapEx and continued our share repurchase efforts, buying back $50 million in shares for the quarter and $100 million for the full year. We transitioned 15 additional stores onto Tekion during the quarter, ending the year with 38 stores operating on our new DMS.

Managing our portfolio and allocating capital to areas that generate the greatest returns for the business and our shareholders has long been a core pillar of Asbury's strategic plan, and I am proud of the team's efforts to both grow the company and maintain our focus on expense control. Moving into 2026, we are confident these collective investments and the strength of our team position us to win, delivering value to our guests and returns to our shareholders. Next, I'd like to highlight some same-store operating metrics for the quarter. New vehicle sales volume were a reflection of prior-year post-election surge. PVRs on new vehicles continued to normalize, and we reiterate our view that new vehicle profitability will eventually stabilize in the $2,500-$3,000 range.

In used vehicles, we are beginning to see the results of our efforts to improve our performance, and while volumes continue to reflect a supply-constrained environment, gross profit rose 6% year-over-year, with used vehicle retail PVRs up 18%. On the ground, we noticed a pullback in consumer spending in parts and service. However, we are optimistic about the outlook and positioning of our fixed operations business. Later in the call, Dan will provide additional details on our operational performance. Our same-store Adjusted SG&A, as a percentage of gross profit, was up 162 basis points versus prior year, reflecting the impact of lower new vehicle profitability. We remain committed to operating our business in the most efficient way possible and will continue to adjust our cost structure as business conditions change.

Moving to capital allocation, we divested four stores in the quarter and are on track to divest another nine stores by the end of the first quarter. These 13 transactions, collectively representing $750 million of annualized revenue, are at attractive multiples and will further accelerate our path to reducing our leverage, giving us additional flexibility to pursue share repurchases. We expect to continue our repurchasing activity in 2026, the pace of which will be dictated by our share price, leverage profile, economic conditions, and trade-offs with strategic tuck-in acquisition opportunities. Now for our consolidated results for the fourth quarter. We generated a fourth-quarter record of $4.7 billion in revenue, had a gross profit of $793 million, also a fourth-quarter record, a gross profit margin of 17%, and expansion of 31 basis points. We delivered an adjusted operating margin of 5.4%, and our adjusted earnings per share was $6.67.

Our Adjusted EBITDA was $250 million. I am proud of what the team accomplished in 2025, and with the foundational investments we've made in our business, I'm excited about the path ahead for 2026. Now Dan will discuss our operational performance in more detail. Dan?

Thank you, David, and good morning, everyone. I would like to start off with a thank you to the team for the positive momentum going into this year as we undertook a number of growth objectives in 2025. Thank you. Looking back at the fourth quarter, we increased our same-store used gross profit thanks to our continued progress and execution by our team members. We also rolled out Tekion to an additional 15 stores during the quarter and, in January, added 8 more stores, which brings our current count to 46, or more than 25% of our portfolio. And on an all-store basis, we can see the positive lift from the Chambers Group in our new and used PVRs. And now I'm going to provide some updates on our same-store performance, which includes dealerships and TCA on a year-over-year basis unless stated otherwise.

Starting with new vehicles, same-store revenue year over year was down 6%, which followed a SAR contraction of 5%. We faced a tough comparable from last year's post-election surge and the pull-forward effect of demand earlier in the year. We did see some disruptions in our D.C. market, as expected. New average gross profit per vehicle was $3,135, a slight decrease sequentially as import brand PVRs gave some ground but were offset by the seasonal strength in luxury. Across all brands, our same-store new day supply was 49 days at the end of December versus 58 days at the end of the third quarter. All three segments were at lower day supply versus the previous quarter, led by several luxury brands in the domestics. Through 2026, we will manage our business based on what we're seeing in our markets and execute accordingly.

Turning to used vehicles, fourth quarter total used gross profit was up 6% year over year. Used retail gross profit per unit was up 18% at $1,749, a $271 increase over the prior year and a $198 increase over our reported third-quarter 2025 number. Our same-store used DSI was 35 days at the end of the quarter, in line with our DSI at the end of the third quarter. Shifting to F&I, we earned an F&I PVR of $2,335. The non-cash deferral impact of TCA was $105, so without the year-over-year impact, the PVR would have been $2,440. We plan to implement TCA to the Chambers stores by year-end to complete our rollout across all platforms. Finally, in the fourth quarter, our total front-end yield per vehicle was $4,897, up $259 sequentially.

Now moving to parts and service, our same-store parts and service gross profit was up 2% year-over-year. When looking at our customer pay and warranty performance, customer pay gross profit was up 3%, with warranty gross profit higher by 6%. We lapped tough double-digit comps in both customer pay and warranty, which in 2024 were up 13% and up 26%, respectively. For the quarter, we generated a gross profit margin of 58.1%, an expansion of 13 basis points. On an all-store basis, this was a record fourth quarter for our parts and service business as total revenue grew 12% to $658 million. We remain optimistic about the trends we see supporting the long tail of parts and service operations. The average age of the car on the road, combined with the increasing complexity of technology in vehicles, positions us to reap the benefits of this large addressable market.

We believe we're well-positioned to unlock meaningful efficiencies as we navigate in our journey to becoming the most guest-centric automotive retailer, enabled by the hard work of our team members and continued investment in technology. Thank you. With that, I will now hand the call over to Michael to discuss our financial performance. Michael?

Thank you, Dan. Good morning to our team members, analysts, investors, and other participants on the call. For our financial performance in the fourth quarter, Adjusted Net Income was $129 million. Adjusted EPS was $6.67 for the quarter. In addition, the non-cash deferral headwind due to TCA this quarter was $0.31 per share. Our Adjusted EPS would have been $6.98 without the deferral impact. Adjusted Net Income for the fourth quarter 2025 excludes net of tax: non-cash asset impairments of $87 million, net gain on divestitures of $26 million, $5 million related to the Tekion implementation expenses, $3 million related to the non-cash fixed asset write-offs, and $1 million professional fees related to the acquisition of Herb Chambers Automotive Group. We divested four stores in the quarter, which generated an estimated annualized revenue of $150 million.

Adjusted SG&A's percentage of gross profit on a same-store basis came in at 64.1%. We feel confident in our ability to manage overall cost over the next few quarters as we progress the Tekion implementation across our stores and navigate normalizing new vehicle unit profitability. The adjusted tax rate for the quarter was 25.8%. We estimate the full year 2026 effective tax rate to be approximately 25.5%. TCA generated $12 million of pre-tax income in the fourth quarter. The negative non-cash deferral impact for the quarter was $8 million. Our updated TCA slide in our presentation reflects the rollout to Chambers during 2026, the disposal of our held-for-sale assets, and revised SAR estimates based on external forecasts. Now moving back to our results. We generated $651 million of adjusted operating cash flow during 2025. Excluding real estate purchases, we spent $186 million in capital expenditures this year.

The assets we sold and haven't held for sale allow us to avoid some low-return Capex to deploy cash for more strategic capital decisions. We anticipate approximately $250 million in Capex spend for both 2026 and 2027. Adjusted Free Cash Flow was $465 million for the year. We ended the year with $927 million of liquidity comprised of Floor Plan offset accounts, availability on both our used line and revolving credit facility, and cash excluding the cash at Total Care Auto. Our transaction-adjusted Net Leverage Ratio was 3.2x at the end of the year. Our results were better than expected from a leverage standpoint, which we believe gives us room to continue with our path of disciplined strategic capital decisioning.

Finally, before I finish our prepared remarks, on behalf of everyone, I want to thank our team members for their hard work in 2025, and we look forward to 2026. With that, this concludes our prepared remarks. We will now turn the call over to the operator to take questions. Operator?

Thank you. We'll now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is from Jeff Lick with Stephens Inc.

Good morning, everyone. Thanks for taking the question. This is maybe for David and Daniel, kind of pack a few questions into one. I guess if you look at 2025 as your base year, obviously, there's 3 or 4 years inside of that year. As you now look at 2026, lapping tariffs, lapping the EV credit, you've got lease returns, potentially maybe you guys have highlighted some more GPU normalization. If you could just kind of give us a little roadmap to how you see things playing out and maybe if you could give some granularity in terms of the first half and the second half, just kind of the qualitative path of travel of what we should look for as the year progresses.

Thanks, Jeff. This is David. I'll start, and Dan can jump in if he wants. I think we're forecasting to go slightly backwards in SAR, but SAR is an overall number that includes fleet and wholesale, and I think it's going to vary by brands. We have a lot of Stellantis stores that were a percentage of our business that were challenging for us in 2025. All brands are cyclical, and we believe Stellantis will come back, so hopefully, that'll turn into a tailwind for us in 2026. We have over 50 stores now in the Northeast. January has been ridiculously tough with weather, so it's been a challenge starting off the year, and we've even had a challenging weather in the Southeast as well.

I would say the first half will probably be a little bit more of a struggle, and the second half should start to free up a little bit. I don't know that the tariffs have fully settled across all brands. There's still movement on pricing, and it's yet to be known what incentives will look like in the future. We're optimistic about our parts and service business and where that's headed. We've had a lot of distractions in 2025 between the acquisition and rolling out Tekion. Now having a third of the company on Tekion and the rest of the company being rolled out by the fall, we think that's going to really bode well for us, not only from a cost perspective but an efficiency perspective going into 2027. We will have some headwind in 2026 paying for both DMSs.

As you can imagine, when you transition a store into a new DMS, other than the excessive cost for a period of time, there's a transition getting everyone comfortable with the software and efficient on it. We think all this blocking and tackling and the heavy lifting we're doing is going to pay dividends going into the future. For us, we probably got 5, 6, 7 months of bumpiness and distraction of going through all of it, but we know the outcome will be very beneficial for Asbury.

Jeff, maybe just a quick hi, Daniel. Thank you.

I was just going to add to David's comments on when you think about, from a used car standpoint, what we're expecting in the second half with lease turnings coming in, you can see the results of our renewed strategy and execution by the team. So we are very confident that it is working, and that has paved the way, for lack of a better term, to when that influx of inventory coming in, that we can pull that lever and execute accordingly while still remaining disciplined to maximizing the gross profit per unit.

And then just a quick follow-up, I mean, because your GPUs are still north of that 2,500-3,000 kind of settling range you've talked about. I guess where do you see let's say you get into the middle of that range, 2,750. Where does that come from? How does that decline in GPU manifest itself? Is that more inventory, finally getting 3 million units on the ground? Is that because Toyota gives a little back? I'm just curious because you guys have been pretty steadfast to that 2,500-3,000 mark. I'm just curious, where do you see that further adjustment to come?

It's a great question, Jeff. I think as long as the inventory stays somewhat balanced the way they are, we kind of look at our brand mix and the way the incentives have been tracking. With the divestitures we've had and the several that are coming, our percentage of luxury goes up from 32% to probably about 36%, which benefits us overall. I would say if the SAR was going to stretch and the inventories were going to grow, that puts the most pressure on margins. But where most OEMs are predicting a flat or a little bit backwards year, we don't anticipate sitting on a high-day supply. Now, the winter months, you tend to sit on a high-day supply because you're coming off a busy fourth quarter and things slow down, but that should normalize over the next quarter or two.

I think we're conservative in our approach when we give estimates at 2,500-3,000 based upon our brand mix, but it's also difficult to predict the future. I think the biggest thing that's going to govern the volume this year is what we've all been talking about. It's the high cost of sale. For new, we're over $52,000 in the quarter, and that's a stretch. So when people are stretching into purchasing, it tends to put pressure on margins as well to try and consummate the deal. Dan, I don't know if you have anything you want to add?

Well, thank you for taking my question, and best of luck in 2026.

Our next question is from Rajat Gupta with JPMorgan.

Hey. Thanks for taking the question. I just wanted to follow up on parts and service. The customer pay growth was a little weaker than we would have expected. I understand the warranty comps. I know you mentioned it had a tough comp, but I also felt fourth quarter of 2024 had some easy compares from fourth quarter of 2023 because of the DMS transition. So I'm curious if the customer pay number is satisfactory to you. I mean, is there more opportunity there? Any sense you can give us around the outlook for 2026? Have a quick follow-up. Thanks.

Yeah. Good morning, Rajat. This is Dan. No, we're not satisfied with the customer pay growth. Just as it is with used cars, we have a renewed strategy in fixed operations that we feel very confident in executing. When you look at the age of the car on the road and then you look at all the technology enhancement that is coming with the new product, we know and we're ready to take advantage of that part of the market. So our forecast remains the same as it's been in the mid-single-digit in customer pay like we have been talking about over the last few quarters.

Rajat, this is David. I would add, in previous quarters—and I think it's the case for our peers, but I'm not confident—the growth in parts and service has been more top-heavy on dollars than actual cars coming through the service drive or repair orders. I made the comment in my remarks. The traffic counts were okay and normal for us, and based upon that, we should have been higher on the dollars. We saw less dollars being spent per the consumer. So it wasn't so much the traffic that took a hit as much as it did what the consumers were willing to spend. As you can see because I think we have it in our IR deck, when we talk about how much we're generating per ticket, combustion engine is over $550.

These numbers keep going up, which is great, but it also puts a limit a little bit on customers. I was shocked to see the pullback in October and November with the dollars being spent. It rebounded in December. In January, starting off, the dollars are pretty good again. I can't explain what happened in October and November. The biggest headwind we have in January is the traffic because of all the weather.

Got it. Any preview on the renewed strategy for parts and services that you can give us going forward?

I would tell you, Rajat, the biggest thing is there's a massive difference between our current DMS and Tekion, and there's a learning curve there. And our original stores that went on it a year ago are performing better than most of our stores in our company because of the efficiencies and benefits of the software. But when these stores transition to the new software - and now we're up to over 40 stores - it takes them a few months. We actually become less efficient for the first couple of months as they're trying to get used to the software and work out the kinks. So we'll finish the Tekion rollout late in the fall. I look at 2027 as a really efficient, productive year for us that you'll notice in both our production with Tekion but our cost control with Tekion as well.

Understood. Understood. That's helpful. Maybe just follow-up question, maybe for Mike, around the leverage. Good to see the progress there. I believe you do have a few more divestitures in the pipeline that you're looking to execute. Any update on that? How soon can you get below three times? Is it earlier than 2026? Any timeline around that would be helpful. Then just related to that, how should we think about free cash flow deployment priorities as well in 2026? Thanks.

Yeah. So we talked about the nine divestitures that we have out there that will close in first quarter, and that will free up some cash to get our leverage down some more. So we think here kind of by the summer, we'll be below three times. The only caveat to that would be with where our share price is, we think there's some opportunities to deploy some cash for share buybacks. And so our goal is still to get below three times by the end of the year. And if we can do that and buy some shares back along the way, we'll kind of balance that as we go throughout the year. But if we just took the cash from the disposals and the free cash flow and put that toward the leverage, we'd be able to get there by kind of the summer of this year.

Understood. Great. Thanks for all the color, and good luck. And best of luck, David, Dan. Thanks.

Our next question is from Glenn Chin with Seaport Research Partners.

Good morning. Thanks, folks. Can you just clarify for us the path forward for Tekion? How many more stores do you have to transition? It sounds like it'll be done by fall of this year. And then to what extent you will encourage these double expenses for running two DMSs simultaneously?

Good morning, Glenn. This is Dan. So we have 125 more stores to roll out. We have 8 more being rolled out this weekend and then another 8 the following week. But like David stated, it will be done by the third quarter of this year. As far as the expense, I'll let Michael give clarity on that.

Yeah. So once we roll out a store, you have to kind of you can't cancel it right away. You have to kind of roll it out, make sure everything's working, all the data comes across, and then we can go cancel the other products. So there's a couple of months of duplicated cost in there when we roll it out. So the first half of this year, you'll see kind of a hit on SG&A for this duplicated cost plus the implementation fees. By the time we get to kind of mid-year, we'll roll over, and the savings from Tekion will more than offset the duplicated cost. So I'll call it a front-half hit to SG&A and then a back-half benefit to SG&A. And then to David's point, when we get to 2027, the efficiencies that we're going to see from it, you'll start seeing those as well.

So that's kind of the pace: duplicated cost first half, savings from the software the second half, and then those efficiencies will come in during 2027.

Okay. But then, Michael, to clarify it, it looks like you adjusted it out for the dual expense. You adjusted it out this quarter, I guess?

No. We only adjust out the implementation costs, the costs I'm having to pay to do the implementations. And then also in third and fourth quarter of 2025, because of the SOX requirements from internal controls around the Tekion software, we had a pretty heavy lift on just I'll call it auditors and all those type of IT folks, third parties, to help us get over the hump with the initial year of SOX compliance on Tekion. So those Tekion costs is heavy, heavy SOX control and then the implementation cost. We have not been adjusting out the duplicated cost of the software.

Okay. It sounds like we should expect it to hit even adjusted numbers in the first half. Can you quantify for us how much that might be?

Well, we have not quantified that number, but we'll work on that for first quarter to give you guys an insight into the first quarter. It wasn't that material for fourth quarter because we didn't roll out a ton of stores, and we only rolled them out at the very end of December. But in first quarter, we'll kind of give you how much of an impact that was.

Okay. Yeah. That would be helpful. Thank you. Okay. And David, will you be on future earnings calls?

I think I'll be on the next earnings call, and that'll probably be it for me.

Okay. Very good. Well, hope you're doing well there.

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question is from John Babcock with Barclays.

Thanks for taking my question. I did want to ask, I know it's still early in the Tekion rollout here, but with some of the first stores that were put on the system, are you starting to see benefits, or is it still too early to tell?

Yeah. Good morning, John. This is Dan. Yeah. The first four stores where we rolled it out, they were here in Atlanta, and we are seeing the benefits from an efficiency standpoint, from a productivity standpoint, from a guest experience standpoint. And then you can also see the flexibility that it gives us because it is a cloud-based DMS. When you're talking about enhancing technology and AI in conjunction with our internal development team, you get rid of all the bolt-ons, and it's a lot easier to enhance the technology to improve the guest experience and efficiencies across the store. So yes, we are seeing the effects.

John, one thing I would add. Every store we roll out, technicians don't like change. They hate the new software. It's a lot of key changes and difficult. But if you went back to the original four stores, they would tell you they wouldn't work at a store that didn't have Tekion. So it makes the employees more productive, increases the transparency between departments, and it also increases the transparency with consumers, which you can visually share with them. So there's a lot of benefits. There's cost savings for sure, but there's productivity benefits as well. Human behavior takes a little while to change and get used to a new software, new language, for lack of a better term. But the early adopting stores that we have are really running efficiently well on it. Costs are lower. Productivity's up, which is everything we anticipated.

Okay. Thanks. And then just next question. I was wondering if you could talk about just broadly how the demand environment feels right now, both for new and used, if there's any discrepancy between the two. Just generally want to get a sense for what you're hearing from the dealerships.

Yeah. John, I'll start, and David can add if he wants to. I'll tell you, for January, the beginning of January was good until we got hit by the weather. And so that pullback that we saw, October, November, was not there the first few weeks in January. But after the weather hit us, it impacted us pretty big because that storm came in through Texas, and it basically just followed our path of where we have stores all the way to the Northeast.

Okay. Thanks for the call. That's all I have.

Our next question is from Ryan Sigdahl with Craig-Hallum.

Hey. Great. Thanks. This is Matthew Raab on for Ryan. Just quick on TCA. It looks like the SAR assumptions were changed very slightly in 2026 and 2027, and then non-cash deferral was raised a little bit through 2029. Just what drove that change, and just talk about where TCA stands today. Any color there would be great.

Yeah. So on that one, we just looked at the third-party kind of different your guys' assessments and then other third-party providers out there for their SAR projections. And most of the people were coming up 15.8, kind of 16.2. And we originally had that forecast in there based on those third parties at 15.7. So we just bumped it a little bit to 15.9 to reflect kind of the additional color out there from the third parties. And also, that's what we use kind of to base our budget off of for 2026 is that 15.9 number. So small adjustment there, just as kind of SAR projections came up a little bit during the fourth quarter. And the TCA, we talked about it earlier in our comments. Our last platform to roll out is Herb Chambers. We're going to roll them out on Tekion.

And then following the Tekion rollout, we'll roll them out on TCA so sometime this late summer, probably. And that will complete the rollout to all the stores. And then we'll be done with kind of the TCA rollout side of it.

Our next question is from Daniela Haigian with Morgan Stanley.

Hi. Thanks for taking the question. So kind of on that point of adjusting SAR forecasts, we also saw the U.S. You made a comment about supply remains tight. What kind of assumptions are you baking in on affordability, what the consumer is facing this year, consumer credit availability, and how does that flow through into used? We definitely saw a stronger used margin and then a bit weaker on the volume side. So how does that play out into 2026 in your views?

Yeah. Daniela, good morning. This is Dan. We continue to stick to our strategy of not chasing volume and maximizing gross profit. There's several items that we have been executing on, really limiting the number of acquisitions through the auction and improving the number of cars that we take through the trades or that we purchase directly from our guest. That is working well. That's where you see how we're maximizing the PVRs and the impact that it had in the fourth quarter. The average cost of our used car being over $30,000 is definitely something that we're focused to bring down because we know that the lower the cost of sale, the faster that inventory turns. We believe that the opportunity to do that is going to be on the second half of the year as lease turnings start to come in.

We have better availability of inventory flowing, and then we can really pull the lever. If the availability of inventory is there, we can pull the lever of going after the volume while still maintaining our strict discipline on the gross profit per unit.

Got it. Thank you. Second is just on your EV outlook for the year. Obviously, there's a big deceleration following the removal of the tax credits. Do you believe your inventory levels here are sufficiently right-sized, or is there more room for that to play out?

I will tell you that overall, company-wide, I would say our EVs inventory is right-sized. We have pockets, specifically Colorado, where there was a high demand for EVs that we have a little bit more inventory than I would like to. But overall, it's been right-sized. And in the fourth quarter of 2024, our EV sales were like 5% of the total sales, and in the fourth quarter of 2025, it was about 2%. And I would expect that to continue as we go into 2026.

Thank you. There are no further questions at this time. I would like to turn the floor back over to David Hult for any closing comments.

Thank you. We appreciate everyone joining our fourth quarter earnings call. We look forward to speaking with you after the first quarter. Have a great day.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.

Asbury Automotive Group (ABG) Q4 2025 Earnings Call Transcript

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