Asbury Q2 Earnings: Net Income Falls 25% as New Vehicle Margins Compress and SG&A Costs Rise
ABG sits 35% above its 52-week low of $172.01.
Summary
Asbury Automotive's Q2 2026 net income fell 25% to $114.6 million as new vehicle margins compressed and SG&A costs rose. The company repurchased $130.6 million in stock during the quarter.
Key Events · Earnings and Guidance · ABG
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Net Income Falls 25%
Q2 2026 net income was $114.6 million, down from $152.8 million a year ago, as new vehicle gross profit dropped 14% and SG&A expenses rose 7%.
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New Vehicle Margin Compression
New vehicle gross margin fell to 5.9% from 6.9%, with same-store new vehicle gross profit down 24%. All brand categories saw margin declines, with domestic brands hit hardest at a 28% drop.
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SG&A Costs Rise
SG&A expense increased to $506.4 million, or 67.2% of gross profit, up from 63.2% a year ago, driven by higher personnel costs and rent expenses from the Herb Chambers acquisition.
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Franchise Rights Impairment
A $4.2 million non-cash impairment charge was recorded on franchise rights for a dealership classified as held for sale.
Analysis · ABG · Trade & Services
Asbury Automotive's Q2 2026 results reveal a steep 25% decline in net income to $114.6 million, as new vehicle gross profit fell 14% amid margin compression across all brands. Same-store new vehicle gross profit dropped 24%, underscoring the ongoing normalization from historically elevated margins. Meanwhile, SG&A expenses climbed 7%, pushing the SG&A-to-gross-profit ratio to 67.2% from 63.2% a year ago. The quarter also included a $4.2 million impairment on franchise rights. On the capital allocation front, the company repurchased $130.6 million of stock, leaving $322.4 million under its current authorization. While the preliminary Q2 release on July 28 flagged margin headwinds, the full 10-Q provides granular detail on the extent of compression and the cost pressures eroding profitability.
At the time of this filing, ABG was trading at $231.70 on NYSE in the Trade & Services sector, with a market capitalization of approximately $4.3B. The 52-week trading range was $172.01 to $263.38. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.