Asbury Automotive Group delivered a solid Q3 2025 with a record consolidated revenue of $4.80 billion and a gross profit of $803 million, achieving a gross margin of 16.7%. Management attributed the solid top-line performance to pent-up consumer demand and the expiration of the EV tax credit, as well as the favorable contribution from the Chambers acquisition, which lifted new and used-vehicle PVRs and pushed a heavier luxury mix through the portfolio. The company posted an adjusted operating margin of 5.5% and adjusted EBITDA of $261 million, with adjusted EPS of $7.17 (before a $0.23 per share noncash deferral headwind related to Total Care Auto, TCA). After adjusting for items related to acquisitions and divestitures, Q3 adjusted net income was $140 million. In addition, ABG resumed opportunistic share repurchases ($50 million in the quarter) and completed the divestiture of 4 stores (annualized revenue of ~$300 million) as part of portfolio optimization.
From a cash-flow and balance-sheet perspective, ABG generated $543 million of adjusted operating cash flow year-to-date and ended Q3 with liquidity of $686 million and a transaction-adjusted net leverage ratio of 3.2x. Year-to-date free cash flow reached $438 million. The company guides for approximately $175 million of capex in 2025, with some spend shifting into 2026 to accommodate Chambers integration. A major near-term headwind remains the TCA deferral impact and a slower-than-previously-expected SAAR recovery, which the management and investor presentation acknowledge will delay the previously contemplated earnings trajectory toward the mid-to-late decade targets. Looking forward, ABG’s growth potential rests on (i) continued monetization of the Chambers platform (luxury mix and higher GPUs), (ii) savings and productivity gains from Tekion, (iii) opportunistic acquisitions and divestitures to optimize portfolio, and (iv) deleveraging to enable capital returns. The near-term investor takeaway is a strong cash-generative business with clear long-horizon catalysts, balanced against macro headwinds and integration costs that may temper earnings in the near term.