Asbury Automotive (ABG) 25 Apr 232023 Q1 Earnings call transcript

Greetings, and welcome to Asbury Automotive Group's First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded.

to Vice conference President like host, to now Reid, Karen and would turn over the your I Corporate Treasurer. you. Thank

begin. may You

Thanks, all. morning, Rob, and good

As detailing Automotive morning on Group's will quarter XXXX earlier recorded later is this The and afternoon. quarter first noted, our press results call. investors.asburyauto.com. for issued release this Asbury posted available first website replay and to Welcome earnings today's call Asbury's is be at being was

our President Operations; Participating Chief today any for our will with of David Hult, we open Senior Financial of questions. me Dan follow-up our Officer; President Senior Chief will and our be conclusion the and and available Clara, At and are Executive Welch, the call later Officer. remarks, questions Vice up Vice President Michael for

begin, we is today to Before the that must you the we discussion statements. call during contain forward-looking likely remind

historical may of forecasts Forward-looking which uncertainties. other than statements those are certain are which current which in subject and subject to statements to nature, -- certain projections, financial expectations, are include each

to Form time may time, reports certain see earlier subsequently on filings that from our release from We the and the risks earnings these results quarterly for XX-K our issued ended forward-looking today. actual year December information regarding XXXX, disclaim SEC differ For statements, to our of update please including responsibility the filed cause with materially to any and Form XX-Q statements. expressly

SEC call. may addition, financial In defined discussed be certain non-GAAP this on as rules measures, under

also first results. the we highlighting on GAAP most our Investor non-GAAP applicable any measures by our posted to quarter such our Presentation updated measures rules, investors.asburyauto.com SEC on of comparable reconciliations an website required As website. We've provide directly financial

the call It's my CEO, David to over Hult. to David? now our pleasure hand

everyone. morning, our call. and quarter to Thank you, first earnings good Welcome Karen,

the of diverse proud am of profit revenue model streams. and and our team's QX its in business the execution I performance across

begins industry as starting see are to we to expected, normalize. trends the As

We continue a environment, changing we are within and prioritize to strategically profitability. operating

due couple Overall, limited to streams. last an the depleted leasing. our and focused has profit availability levels we been unbalanced inventory new this brand, fleet Over of maximizing pre-owned gross on in lack of of years, by inventory are pre-owned with

consolidated to Now, our results.

during contributed of in XX stores, revenue in $XXX reminder, the in we first in quarter, fourth nine XXXX, quarter, a million the As quarter. occurring divested second stores These four last and the year. three

for revenue, the of of in gross quarter XX.X%. had Now, profit we first generated XXXX, margin billion $X.X a

of was a XXX,XXX EPS as and SG&A of margin $XXX was our and profit operating We percentage Our delivered million. EBITDA million. for had $XX we X.X%, gross an shares an repurchased XX.X%, $X.XX, of

the yesterday, million. start $X the we second XX,XXX shares addition, of In purchased for quarter from through

a a continue and for are operational from to monitor for and acquisitions stringent thresholds that We for that company returns view. cultural the our the meet marketplace fit

Our to maximizing thoughtful our and opportunistic, for mindset continues be shareholders. in strategic, our that are we returns

haven't already. Now, at you all expanding second We to highlight we stakeholders, Report our I of Corporate Responsibility invite that read it you March. like to the would published end to if

strong what to XXXX. like fellow is my to centric are I a and The would Finally, members looking in to with for begins thank store. team forward experience guest we you start

over Thank to performance. discuss you. now the hand will call Dan? operating I Dan our to

everyone. Thank morning, and good you, David,

our hardworking consistently exceptional delivering to team like guest members thanks for experience. an also to would extend I my of all

performance, the in stated which same-store moving TCA Now, to unless dealerships otherwise. includes

from XXXX now XXXX, reminder, which as TCA acquire same-store were have in same-store. the many the Also, as stores late are As a stores that quarter. results during our entered for well XX excluded we divested

quarter vehicle represents XX-day a supply. inventory new at vehicles, new with $XXX which Starting ended our the million,

XX import greatly days, days, Our within domestic luxury at among being and with brands at days, segment and supply fluctuated XX varying at by those and day models XX segments.

new revenue by vehicle we X%. while new year-over-year, vehicle down was X% grew volume Our

$X,XXX, per a $XXX profit vehicle the from gross average decrease New prior of was year quarter.

quarter, Turning of was retail vehicles. mainly profit to sales. due year to from of X% Used $X,XXX $XXX per down per year the Used the the used a through dropping cost prior gross retail for vehicle revenue was decrease quarter. quarter,

used inventory XX-day represents at the Our vehicle quarter which ended $XXX supply. a million,

an quarter. of decrease $X,XXX, to the Shifting year F&I a F&I, delivered prior compared to we of $XXX PVR

credit quarter. financing front end the consumer did a In quarter, not timing decrease per in Regarding of of the first $XXX. yield vehicle see our miserable general, total $X,XXX, a we impact in was

of and service our gross its parts Moving its pay source growth, the quarter. revenue Customer and to quarter. XX% XX% upward in profit a with in business expanded momentum the XX%. was parts by and strength service, increased we Revenue continued

increase and the and Clicklane, for for sales XXXX Now, in quarter. over features. of Please basis. approximately quarter, note offers Clicklane, XX,XXX a which Clicklane. of was of turning $XXX generated first XXXX are store revenue revenue achieved set by that all-time quarter. and quarter the record over XX% We last quarter, on for in guest year-over-year, tool to for million Clicklane of are XX% a on experience our through an our and the omni-channel previous were XX% we XX% all first reporting centric just estimate that retail total powered we $X.X we Clicklane increase Approximately We track Clicklane in full first sales an a annual billion best, Clicklane the our vehicles

finance some credit to XX approved end $X,XXX of average PVR KPIs those XX% required customers at $X,XXX, total of PVR deals some The those time equates which instant the customer of remained minutes Average than assistance. while the the customers Clicklane and for of is to XX% score higher the which offline credit transaction end applied was financing, for X.XX, yield. score quarter. our in front of first were quarters, for approval $X,XXX, that remaining an prior received stores. which F&I front of average on Moving Total with cash line minutes deals. from and eight

us was XX% were were our which and sales. and XX.X miles, margin average finance lender dealerships departments. The from in a sales cash allows to high Clicklane of retain parts service distance customers our XX% delivery

In level our is recognize guest have the journey service differentiator we we provide. naturally important of the centric automotive that trust, retailer, and we the that most follow. to become retention most Then, loyalty,

our now to will hand I the call Michael discuss to over performance. financial Michael?

team To other you, investors, call, analysts, on participants and Thank Dan. morning. good our our members,

provide to highlights some our company. I for would like financial

for our financial website. our Investor details see For financial our release Presentation and additional today on quarter, on our the performance press in our please supplement

the non-GAAP adjustments in first to XXXX. were EPS no was income net XXXX for the excludes the for quarter. There $XX.X first quarter Overall, quarter to of net income $XX.X income of was sale $XXX of four EPS million to and net quarter $X.XX on dealerships gains $X.XX million related This of net adjusted million a by $XXX,XXX and XXXX leaseback. the sale of gain $X.XX. a first gain tax on Adjusted

Our effective to tax was the We XX.X% quarter quarter of estimate first rate approximately XXXX of remainder compared our the for first XXXX. XXXX of XX.X% XX.X%. for tax be the to rate for

first capital approximately $XX purchases, quarter. real expenditures the in on spend we estate million Excluding

$XXX CapEx $XXX We our lease continue million as related replacement of this is million, million rollout to we acquisitions. about expect to Of related property. XXXX full-year to $XX to expected planned be be our XXXX CapEx the to

which net gains. million For $XX TCA of excludes income, the $X million of unrealized pre-tax quarter, made

out all in expect rolled the our and to decrease of rollouts, stores by We XXXX. the of to expect Louis, have the deploy of St. into TCA XXXX, store a our and income we Texas, deferral to stores in pre-tax end of Colorado, TCA with we rest generate to million the associated Due XXXX. the of from $XX $XX million income for TCA the

revolving of comprised total strong approximately care offset of cash, our $X.X managed sizeable support acquisitions as long-term on quarter facility. our credit with in both years, Even floor accounts billion our Our and sheet levels auto, liquidity we debt strategically our to excluding ended balance line recent remains growth. used have availability plan to with we cash and

end forma at net leverage was pro X.Xx March. adjusted Our the of

cash to and driven able XXXX, seize million our For generation, our cash quarter business the goals generated adjusted opportunities. robust achieve With $XXX by be strong model. operating flow to we have flow the of flexibility our strategic first of we

acquisitions for enhance shares We versus to would that shareholders. to constantly the further repurchasing return our gauge strong portfolio capital potential market

Finally, like to also I our would thank Asbury members. team

centric Our dedication guest to result model. is the by driven your

I will call provide to the to hand over now some back David David? closing remarks.

Thank you, Michael.

results, complexity of and from encouraged we levels a service by cars, especially car same-store our well I'm EVs such still parts business. the for age and our bodes depress as In historically park, strong newer an our performance.

opportunistic are sheet, more in which We philosophy to our strategic robust have be and been for and buybacks. cash actions. potential our flow in grown has balance time, and over acquisitions and With we our strong continue

the the Operator? our now to prepared We'll remarks. questions. concludes operator your and turn This over take call

session. a you. Thank At question-and-answer [Operator conducting time, Instructions]. this we'll be

Our Daniel Please first with Inc. question from proceed with comes your Stephens, Imbro question.

of you new demand a job. production or in doing today have at some Clicklane, second, how units of the new trends? sold than there pre-sold? I that try with what's And trended as the feel as related to are sales other side, I has operationally one, guess that improve assess things then one, we pre-order vehicle margin of like what domestic maybe guys the protect the getting elevated percent are the here GPU on vehicle David, great done some are of you especially and on OEMs. a guys terms to backdrop

on and David, XX% is were pre-sold of Dan can quarter incoming. our take Last in. it cars this about Daniel, I'll jump

For QX, to it XX%. dropped

certainly as healthy number, we So but was pretty there there think a a still drop well.

side, didn't to determined up just pre-owned it make in sequentially, we the we chase went sense On volume. PVR; actually that

but to because the much is about selling price the price dictates what be. sale profits Our the not are going gross price, acquisition the market so

consumer. We to felt weren't buying cars or a us purchasing overall. vehicles really off aggressive trade-ins focused gross EPS we generated which and auctions from was for like a direct have trade-off higher on lower better better profits, from that. So at it We anything and lease volume cars

add. nothing have I David, to

I think you covered it well.

it's been used is down? Are Are discernible seeing lost that for quarters. weakness then they've buyer to you And that point there attachment out or you it lower F&I Maybe follow-up, tell changing that the Are on from side, a couple on any would in seeing you you anything pre-owned trade obviously consumer of thank in still of product seeing and market. that. how you that materially consumer? change

of time years. on first You cost sale, our little it for bit a of can dropped in couple a the see

over So we the put rate sign. interest with increases see that as that's time, more Certainly a all pressure payment. good on the

being not taking time. as people So more thoughtful about and I think are quickly reacting

in them the can are if finding turn challenge looking find fit. biggest a Really that so you manner cars imagine The trying quick people right right will. as to is you for now you those can

again, margin that we right off-lease can of is believe the the feel to XX% focus we focus we're can cars So vehicles. we as trade-ins our hold And maintain onto that and almost going be. are if selling we what is best can, which now we

I in then in cash cash? M&A What and last trying for specifically XQ. on is just me, the the like balance one the there are or divestitures you would you the a follow-up as any brands or Michael, to that sheet, Great. certain for in billion on $X.X with fill And fill in financials, to did are markets guess appetite

sense out there for comparing make We're market in for trying the buyback We then acquisitions share still out well. opportunities are the like we're mean, find to those strategic I that we're the as in. that looking and us strategically to markets that acquisitions. Yes, there

uncertainty balance markets. to and little bit best is think trying for the just those approach is I and it just the So cash, opportunities with being right environment the our the with strategic now the that just with the with cash uncertainties two in a items right the economy, what waiting in

we just And David, M&A really a land we're I'll about. good just amount been something this opportunities seeing activity come strongly say feel our and that seeing of haven't is way, to able

forward and going for detail. all the luck of best Well, thanks Great.

you. Thank

question. your Our next Jonas Stanley. with Adam Morgan with question Please is from proceed

Hey morning. everybody, good

I there in remarks, was financial about measurable no think after my sign question. the quarter? during question first your the How So that My tightening quarter. you of said is, first prepared

David. our the in is percentage is is tell would business. as month a this last of X% subprime we XX% I normally just state over Yes, of is our Adam, you reminder, that our business quarter a yet. about Not

credit XXX a So our customers core over score.

We we're up have signed that over XXX lenders with.

of a here options So we seeing have and any we we're tightening today. not lot sit as

Okay.

lender So it just going yes right? tightening, side, that, don't on fair XX there interpretation, -- X, see you because to happening interpret from the but it's a Is is to maybe that

locations, after we Well, looking aggressive in go-to-market business, store how tell subprime. for just go so would not our we're I our our you,

the say up number have compared others. But as their of that have, So it that again, imagine some -- don't I the we as available can to seeking issue of polarity at look to us, we there's majority an And you of practices of lenders we I have banks the tightened wouldn't way much. that wouldn't certainly lending. just because with have those

it. got I David. Thanks,

would be Just a to Thanks. to on ATP comment year say follow-up, delivery us also environment. ago. of trended, was can MSRP, that the where sales given versus then are or your percentage update maybe exiting that's last your current that how there kind on ordered helpful any let's that or And of you pre-ordered, year gap new

I Last a were off were our it was of that incoming. QX, there. fourth Sure. In get it. drop bit quarter, of XXXX, XX% XX% so of pre-sold of quarter hope I a all vehicles little

versus ATP MSRP.

vehicles would vehicles we're we Yes, a of XX-day like supply, MSRP holding single I discounting percentage at day that of and have to that certainly of this and north certainly models MSRP, say expect say supply have certain a point. it's you'd just

is question Please from question. of with Our proceed next your John Bank Murphy America. with

up healthy about big because real guys. it such everybody or things I issue. one it's profits the your but putting the you to profits. into you're be thing for consumer, it business. a just is vehicle And near pretty for And may record morning, for affordability. Good And claims a are record get not issue wanted you in new that

them even new side. So the from as them a a where and avenues buying you process two you the transitioning you good vehicle service they're profits used in and pretty successful what's an and new parts think how about somebody coming a vehicle in are to vehicle, and/or challenged buying and to make affordability perspective into customer, transitioning relative

John, good morning. This is Dan.

aspect the surely but of car slowly it. the term, better I first from say in a leasing So a taking for new lack a from starting see we're to affordability the pace a of perspective, faster of aspect would

returns And that's going the the down but car all leasing at for used back. road the done know into they on on all price know a be see that done a from car three as all from the second, those lower challenging So so the the We consumer a or really back first to department, sales you lease that get perspective to we able service. that years opportunity want of getting third, coming fourth, that new allows that sell car through and the is have our payment. we the is car benefits dealership to

we making they're making service, respect time, to cycle do extremely and we from focus the they in and for turnover sales that first we important. just put So that time getting people's out sure come I if that that's that so in on transaction much to Not may services their cars that service come. that why when grow wise service on going is continue know time, to we that that continue the because comment the we mentioned with the as to I a we And going their people's job then getting loyalty respect extent completed earlier sell to us. is years in to if we're retention to do good in the sure

the of built I heavy that an in the sense quarter inventory vehicles that the would expensive we add chip in the side, of, with had domestics And some to people on first content slow pressure there the John, approach especially a domestic really and were was the And we quarter, what related contented vehicles. one for in were the first than there. the heavy was looking were in our everyone thing of trucks did on less went see shortage, pricing during there incentives had. we imbalance

the in expensive contented the on truck. little seeing I less for we're truck certainly looking less people So bit it of think side a sense

is to department vehicle on right the sell and across vehicle can them a mean, fundamentally buying follow-up different that vehicle, affordability mean, maybe Are a on and been or a vehicle if which harder and consumer? new I'm afford? if you transition into have a those the that selling walking can vehicle I side, them those can on folks challenged don't just have harder And guys this, new -- I having the that? success what's and in in Okay. curious, buying to they're with you there? the success used vehicle I pricing is Or you the moment. on at working able comes but to used somebody you they

John, usually and pre-owned. answer sales a portion to I'll it's get it. Yes, It's transitioned your not, of

As an you than do have and new, can see, mix about lower overall model of day supply. it's pre-owned we more so than supply else we a anything day

answer from vehicle no easy that People for in constantly there's about pre-owned segment. that So looking right new but pre-owned, they're the your it's having to to flip question.

it availability there that So that's is issue we we do when successfully, it's there not naturally obviously an have. the when

the I Is else looking sales on same-store on I if gating the something were And I availability constraint there sale the factor or sort growing -- service got be she same-store -- side, the thinking apologize, there? is parts call mean, it. about Got late, on should and strong. tech very sales that of the as the

point, technicians future at amount from we're only the and them within. then a now labor a is to having availability available but is technical very again. local that out relationships we take put how not is may This I in We'll for know tech there we The with good -- all this us. of level entry hire we if developing market able tremendous will Yes. Dan emphasis where every institutes technician competitive

that us out markets. our bay and away of has certainly, going capacity shying we is more we're because technicians have we from But -- fill So to it well working in technicians. with the that more actively not out need for many after just

one choppy XX with parts their folks economically, and but onto add, service. a the market the those ways invest to would a it's the history thing to and hold tend shown age in John, over lot years, has of in I cars of average car

years So being healthy for many again, we see and come. parts service to

to is much how on improve I function Okay. volume just cost this SG&A and the a save point, just really as it lastly And Or at of there then holding grosses comes David? the on cost mean, is opportunity out side, letting costs take back? over line time

Yes.

That's we sales and months where I of make look went software on tailwind just several software next which employee that all for positive little to omni-channel with market the things months a bit we our that a were per during and should than where XX had. to with One road person, working approach, productivity from trying lower to XX had things in for are. up to that think we our us. be lot But the for in get down with we're there's segments, will of we're we happen the the a to another out even level us months XX go. would create some though for it the we efficiencies into per of say opportunities volatility the production quarter our really of a the to working depressed difficult

Instructions]. [Operator

Graig-Hallum Group. question. with proceed with Our Capital comes Please Ryan from your next question Sigdahl

Good morning.

one question on for Just us Clicklane.

it what the a the look piece? the So F&I the quite quarter. relative incremental I at I when the improvement Clicklane you in underlying business attribute specifically are more overall to sequentially biggest retail dealerships, on but KPIs good, do than get in increased the the bit F&I,

interesting Ryan, question. had is because we David. the this It's same

to reality selling obvious. the I'll so it someone's not to you're pretty I what preconceived buy. things. but people I've It's when in think much products the is buy again. about things have store; People before, And notions be sold it stated love willing say

it's the if customer. employee consumers products them And doesn't it been very doing no F&I still the The doesn't intervening sales. domestic are or opportunity it a Asbury matter doing it's solely We've rate. F&I import, shop to used; with there's at on the their based luxury. on happy great because converting self-selection for is if This matter our that own are

question from Please next Morgan. Our is J.P. with proceed Gupta your Rajat with question.

the this opportunity line. I I the questions. wanted Great. the just strategy how mean, given book down trade-off. used with you around lose approach, cars and and volume the repair work F&I you versus Thanks parts follow-up for maybe to to plan on taking to long curious the GPU like persist

have like how long on at that thoughts retain this And persist reevaluate to Thanks. any maybe just this is would So eventually? I customer to point and going follow-up. some you a

tell couple as depressed it we continue you, this think Rajat, evaluate there. I to see inventory isn't with think long next you'll will we as this start is in. We years David. availability it's month. every some to the back approach would come a Again, we year of have those cars and COVID

with ride So it changes, to to year that and nimble. we benefit day adjust entire philosophy, us but quickly The will it. of allows if pretty supply low that be we the market maybe shifts this

been up I lower can than being chased our shareholders. margin would've for would've down, been if SG&A say profitability our volume our and our other we

maximize is best think upon to approach market have current trying returns give highest to this SG&A. our we're again, returns and So conditions, right based lowest the our now, and a we

maybe it, just anything this hearing recently, do Tesla. to get these other round need to more cuts plans GMs, are OEMs your this. counter on -- Got cuts reacting the heard feedback any that for cuts it. you've from or -- the the from this price on the I'm you're from how or clarifying SMs with ground, Got thanks consumers Good. to from price of And that. thoughts it. with -- for Thanks price curious,

what like maybe hearing on ground. Just the you're

have. thoughts all your are Just need the that's what implications I And on of this.

we're scale legacy now not, a out to Generally models. isDavid OEMs This lot a tax the market It's excellent credit Depending again. the the a point EVs and an now, assist. tough of with good complicated with coming certainly whether are for a of incentive they than qualify in or Rajat. and Tesla's. Most at really answer. price to coming that's speaking, upon good question lower really and Okay, cars

did. I not equally, are how So will plays you they the for boats the year part what out all that's floating if The produced. be But assume gets of to over see will. reason it to of demand next EV relevant what interesting

I through and driven build, the think and we've for be seen the customer selfishly we will needs what incentives or will see four get last to traditionally that you'll a healthy to those decades to up leasing start because get think lot as incentives really a return We're retention to that leasing volume inventory really hopeful levels. speed starts increase. to of back

Got the it. last for Got sorry. Maybe one Thanks it. just one, color.

targets. On and were hitting be XXXX to those but they a used the driver reiterated targets, big looks vehicle is going of like growth

offsets could year perhaps new situation, embedded mean next get the this M&A those persistent maybe you that like into car targets GPUs. extending other or maybe more more year are Over still any I there to

comfort as changed versus curious around of initially. the that like that you caught and Thanks. targets when Just maybe with have level competence those just

Sure. This is Rajat. again, David

the on As last large a at fell we were we stated end. that quarter, acquisition apart

a our XXXX on by great team we're we're year little target. market the We're things other now. We in we'll year end that going our things can I to now. with tracking it's the of other the a inventory feel not challenging we're point that how growth XXXX as towards and within in. line bit levels But would a right we control a at same-store market sight -- of the at that have operating looked have how target. we adjust year, We But

So an couple for back I for track on us of can update put for right that. but say us look acquisitions the a would end at XXXX,

it's and intend too do us early any the year. of we end to to So make that the at for updates

Great. good color Thanks for all and luck. the

you. Thank

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

Can vehicles and speak segment, consumers incentives? content the performance pricing were that the a touched versus David, what new Was slow of you in to of with by react fact you domestic? for the divergence luxury domestic to the looking of of that unit import function OEMs issue on were that some it

really on it you we our release, and is our hot didn't of obviously And the and quarter much the supply. so towards import have extremely vehicles. brand whether of most all. Toyota. Southeast, varies can Sure. in mid-teens on had tell largest And we had jumped supply. the Midwest. as It I at quarter day day market, flying quarter, really to inventory was single The by it's single we a day up the second our of Honda see an side, entire models, Southwest you end the earnings supply close

at So a the was demand was think healthy we margin. there and the volume there to more do

on one volume. and in supply had we more demand cars available, still luxury we see the luxury Lexus, our side. Again, were know sales pretty our good a quarter, a single of there is quarter, On day We sales during there. the usually the and of number Lexus side, governed and pre-sold lot were the were

this But down headwinds our sit well model-based on are it's we our import combustible And whether at we getting and it's think standpoint. as on we're side EV. it's today, certainly we and fairly or think luxury aligned Now domestic cost the here structure vehicles.

All right.

you has So you you to you it with do is, question them It or the changed to domestics market that market? were talked incentives. to mentioned to the about before come change, when expect -- the slow come to expect that issue, David,

Sure. Stellantis is the one that has impact the us. on biggest

Stellantis. XX-day over have of We supply

incentives as in stop table. they govern your that sales increase but to slow truck markets it have the sale difficult, that's trucks make going also to come continued We to have And to so were well. their

have with vehicles still have trucks today. are contented stop-sale as we here that we sit up, So and we heavily incentives catching

just speaking confirm, And Stellantis, primarily of not Okay. three David, you're to big that's the overall?

Yes. I with balance seeing right would standpoint, majority of from it say now. a we're a Stellantis again

customers on a that quick you And for good. housekeeping this percent normally that new specify of then are Asbury. you very to question, Okay, Can quarter? share Clicklane, the just

Sure. same think I It XX%. last quarter. was as It -- it the was number was

question with with proceed next Our Jordan Jefferies. is from your Bret question. Please

that Could update on an network? is rolling is across obviously out issues, the internal the you the there Asbury but the guess broader accounting give some changing through you'd any product that Miller had acquired acquisition? cadence of it insurance that us And Larry I

our So to just that. Louis. large rolled We on later Texas into stores. legacy go St. have of stores, an through it rolling our We're still year. Colorado and this it out Florida update and Georgia We've markets

progress the that And the rolled is so getting it we're year. over making kind out, on progress of steady good of remainder but a

deferral that we legacy of income take that's as over kind life to product roll cycle. to income it and The we one that of year the get stores, then hit out we our recognize the

toward end on put And groups see rollout hit so that kind Florida. some and you'll we of these the in larger of as Georgia the of year

kind the good we be. just on making So XXXX. slow we're of process a what progress throughout It's target for thought entire we'd

of obviously going back GPUs see talked of that pre-pandemic? of selling normal the new But a your sort do I have we and with and with new ends? world your about Or I incentive rates, think in guess lower another quarter sort about think you you when and the in the than maybe to And recovery a a belt, feeling of sustainably you two-year it XXXX-ish trend cadence of the whatever higher expenses. sort do the you mix prepared under sort remarks, is front of are Okay. trend? inventory for GPU high

to that the the the impact used But a and sustaining we a have we higher Bret, going not cars availability it's day we inventory Good we're it's with we that's the know near how demand see far I and bit that supply Dan. morning. It's away in come see And are, then don't that levels supply certainly higher GPUs. but in of I future. Hi, current exactly an -- moment a think have, the to proposition. away, little

long-term the to we were back those surge? But us we on trending pre-XX to of prior think expect we're you see Or are Do not structurally new higher? numbers sort where you Okay. over GPUs? again to the do

don't be Yes, Bret, on I might David. getting there. back this pollyanna us this. is But see I

think acquisitions think the stores the car better OEMs higher. at be higher float our selling day XX Crown had couple cars is to and again, that be going I age lot naturally a will are available, been and in the last the And of with I Asbury supply. And to of and average years, Mississippi efficient and it'll we the press off more years. -- haven't specifically

for we we couple As years. XXXX the the soon see they drop ever. we if in long check, of back next healthy keep supply maintain day Albeit all coming some, we as margins may can think can at anytime don't

you strategic Okay. XX. said mean, they are UAW And day for I be over obviously or strike example, supply, the sake they just that producing? producing Stellantis Is on of that because may the

put -- Yes. their would don't trucks would I specifically on We've they've answer normally fortunate. just suppliers the that part reminder, day issues getting vehicles of a with necessary But to I that assume less had vehicles, supply say products I been quickly. stop-sale turn but necessarily as together. pretty and is content getting their know that

So a and as months for it's trucks day those supply. them, the can't couple certainly hurting sell sit we

today's concludes of the second you. participating That talking look day. you everyone We Have great to We a to Thank forward call. today. appreciate the end at quarter.

conference. This concludes today's

your and for thank time, You participation. this may at lines you we disconnect your