On the Dash:
- Asbury sold 13 stores in Q1, freeing capital and cutting exposure to underperforming brands
- DMS transition creates short-term inefficiency but sets up long-term operational gains
- Efficiency benefits from the tech rollout likely won’t fully materialize until 2028
Asbury Automotive Group is prioritizing long-term efficiency and profitability despite a slowdown in new-vehicle demand, backing that posture with dealership divestitures and a major technology transition already underway.
“We believe the foundational investments we’ve made position us to drive meaningful efficiency gains and improved performance as we progress through the year,” Asbury CFO Michael Welch said during the company’s first-quarter 2026 earnings call on April 28.
Asbury Automotive, based in the Atlanta metro area, sold 10 dealerships in Missouri, South Carolina and Indiana and terminated three additional dealerships in Massachusetts and Rhode Island. The exits included an Infiniti franchise, along with the group’s only Alfa Romeo and Maserati franchises, brands that have generally underperformed industrywide.
Welch said the divested stores generated an estimated $625 million in annualized revenue. As of March 31, Asbury operated 158 new-car dealerships. The company said the moves reduced capital expenditures and freed up funds for reinvestment.
Asbury reported $3.5 billion in same-store revenue for the first quarter, down 9% from the first quarter of 2025. The company noted the year-ago period benefited from a surge in demand as buyers accelerated purchases ahead of tariff-related price concerns, creating a tougher comparison this year.
Net income rose 42% year over year to $187.8 million. Adjusted net income, which excludes items such as a $94 million one-time gain on divestitures, fell 24% to $102 million. The company said most of the divestiture gain was applied toward share repurchases.
The company is also in the midst of a major technology transition, selecting Tekion to replace CDK Global as its dealer management system, following a cybersecurity-related outage in 2024 that disrupted dealership operations across the industry.
Asbury said more than 50% of its dealerships are now operating on Tekion’s Automotive Retail Cloud platform and digital commerce system. The company reported $6.1 million in implementation expenses related to the rollout during the first quarter of 2026.
The automotive group expects to complete its nationwide rollout of the system in fall 2026. The company said efficiency gains are expected to become clearer in the second half of 2026, with full benefits not expected to materialize until 2028.
