Asbury Automotive Group Inc

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 Invest Relations. Thank you, and you may begin.

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 second quarter 2025 earnings call. The press release detailing Asbury's second quarter results was issued earlier this morning and is posted on our website at .asburyauto.com. Participating with me today are David Holt, our President and Chief Executive Officer, Dan Clara, our Chief Operating Officer, and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open up the call for questions and will 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 Form 10-K for the year ended December 31, 2024, and 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 -over-year basis unless we indicate otherwise. We have also posted an updated investor presentation on our website, .asburyauto.com, highlighting our second quarter results. It is now my pleasure to hand the call over to our CEO, David Holt. David?

Thank you, Chris, and good morning, everyone. Welcome to our second quarter earnings call. This is an exciting time for Asbury, and I want to begin my remarks by thanking our team members who make it all possible through their hard work and approach to execution that has helped us consistently lead the pack in operating efficiency. I would also like to formally welcome the more than 2,000 team members from Herb Chambers. And finally, I want to personally thank Herb Chambers for the opportunity to be a steward of his business. We look forward to a bright future together, and we're eager to partner with the Herb Chambers team members to continue growing our presence in the New England market with the high level of service you have been delivering for 40 years. Shifting to our operational performance, we continue to see strong demand in the second quarter as consumers weigh the decision to buy ahead of potentially higher prices from an ever-changing tariff landscape. But we did see the star decline as the quarter went on. We believe the outlook for the second half of the year will be heavily dependent on how various tariff decisions make their way to consumer-level pricing. While new vehicle GPUs have been resilient year to day, we still see those metrics trending back towards the 2,500 to 3,000 range over time, with optimism that we end up more towards that 3,000 level. Use vehicle profitability has remained strong, supported by a constrained supply environment. Based on the limited pool of used vehicles, we have chosen to focus on gross profit, but we'll continually evaluate that approach based on how the used vehicle market evolves. Our parts and service business continue to deliver stable, consistent growth, with same store gross profit up 7% for the quarter. We are continuing to invest in tools and technology that will enable our fixed operations business to operate more efficiently and deliver an even better guest experience. Our transition to Techeon is part of that investment, and we are happy to report that our Coon stores are now 100% converted to the new DMS. As I mentioned at the start of the call, it's been an exciting but busy time for Raspberry. Our near-term focus will be ensuring all of our critical initiatives are executed at the highest level possible. I couldn't wrap up my comments about our operational performance without commending the team for their focus on running the business efficiently. Our same store adjusted SG&A as a percentage of gross profit was .2% for the quarter, an improvement of over 100 basis points from the second quarter of 2024, and a sequential improvement from the first quarter of 2025. It is important to note that we still see opportunity to further reduce our SG&A profile over time. Our ability to grow the company through transformative acquisitions while maintaining our operating margin profile is a point of pride for us, but it's just one element of our broader approach to strategically managing our portfolio and deploying capital to its highest and best use. In the second quarter and through July 28th, we divested of nine stores as part of an ongoing capital allocation in our effort to optimize our portfolio. The proceeds from these transactions help to offset some of our investment in herb chambers, and we anticipate prioritizing leverage reduction over the next 12 to 18 months as we work to integrate the acquisition and focus on our migration to Techion. That said, share repurchases are an important component of our capital allocation strategy, and we will be opportunistic in our execution of share buybacks, even as we work to reduce our leverage ratio. And now for our consolidated results for the second quarter. We generated $4.4 billion in revenue, had a gross profit of $752 million, and a gross profit margin of 17.2%. We delivered an adjusted operating margin of 5.8%. Our adjusted earnings per share was $7.43. And our adjusted EBITDA was $256 million. Before I pass to Dan, I want to once again acknowledge our team members for their focus and dedication to the business. Your commitment every day puts us on the path to be the most guest-centric automotive retailer, and we're optimistic about the future. Now Dan will discuss our operational performance. Dan?