Asbury Automotive Group Inc (ABG) 2024 Q1 法說會逐字稿

Greetings, and welcome to the Asbury Automotive Group First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

您好，歡迎參加阿斯伯里汽車集團 2024 年第一季財報電話會議。此時，所有參與者都處於只聽模式。正式演講後將舉行問答環節。

(Operator's Instructions)

（操作員說明）

I would now like to turn the conference over to your host, Chris Reeves, VP of Finance and Investor Relations. Please go ahead.

現在我想將會議交給主持人、財務和投資者關係副總裁克里斯·里夫斯 (Chris Reeves)。請繼續。

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 First Quarter 2024 Earnings Call. The press release detailing Asbury's first quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Hult, our President and Chief Executive Officer; Dan Clara, our Senior Vice President of Operations; 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 we 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.

謝謝接線員，早安。如前所述，今天的通話正在進行錄音，並將於今天下午晚些時候重播。歡迎參加阿斯伯里汽車集團 2024 年第一季財報電話會議。詳細介紹阿斯伯里第一季業績的新聞稿於今天早上早些時候發布，並發佈在我們的網站 Investors.asburyauto.com 上。今天與我一起參加的有我們的總裁兼執行長 David Hult； Dan Clara，我們的營運資深副總裁；以及我們的高級副總裁兼財務長邁克爾·韋爾奇。在我們的演講結束時，我們將開放提問，稍後我們將回答任何後續問題。在開始之前，我們必須提醒您，今天電話會議的討論可能包含前瞻性陳述。前瞻性陳述是除歷史性陳述之外的陳述，其中可能包括財務預測、預測和當前預期，其中每一項都受到重大不確定性的影響。

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 2023, 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. We have also posted an updated investor presentation on our website, investors.asburyauto.com, highlighting our first quarter results. It is my pleasure to now hand the call over to our CEO, David Hult. David?

有關可能導致實際結果與這些聲明存在重大差異的某些風險的信息，請參閱我們不時向 SEC 提交的文件，包括截至 2023 年 12 月的年度 10-K 表格以及隨後在表格上提交的任何季度報告10 季和我們今天稍早發布的收益報告。我們明確表示不承擔更新前瞻性陳述的任何責任。此外，本次電話會議可能會討論根據 SEC 規則定義的某些非 GAAP 財務指標。根據適用的 SEC 規則的要求，我們在我們的網站上提供任何此類非 GAAP 財務指標與最直接可比較的 GAAP 指標的調整表。我們也在我們的網站 Investors.asburyauto.com 上發布了更新的投資者演示文稿，重點介紹了我們第一季的業績。我很高興現在將電話轉交給我們的執行長 David Hult。大衛？

Thank you, Chris. Good morning, everyone. Welcome to our first quarter earnings call. I want to start by saying I am proud of the hard-working efforts of our team members who delivered our first ever quarter of more than $4 billion in revenue. As we continue to progress along our growth strategy, it is important to reflect on the performance of all of our team members, leaders and platforms that are powering our path forward, including our first fully operational quarter with our new team members from the Koons Group. Thank you all very much.

謝謝你，克里斯。大家，早安。歡迎參加我們的第一季財報電話會議。首先我想說，我為我們團隊成員的辛勤工作感到自豪，他們為我們的第一個季度帶來了超過 40 億美元的收入。隨著我們繼續沿著我們的成長策略取得進展，重要的是要反思我們所有團隊成員、領導者和推動我們前進的平台的表現，包括我們與昆斯集團的新團隊成員一起全面運營的第一個季度。非常感謝大家。

In our second quarter 2023 earnings release, we said there would be integration-related headwinds to our parts and service business that would extend into the third and fourth quarter before improving in Q1 of 2024. This quarter's performance shows we are progressing and expect this portion of the business to grow at mid-single digits or higher through year-end. In the fourth quarter earnings call, we discussed our commitment to a more aggressive stance in our preowned sourcing. We maintained same-store PVRs quarter-over-quarter and increased same-store unit volume by more than 9% or 2,700 units, versus the fourth quarter of 2023.

在我們的2023 年第二季財報發布中，我們表示我們的零件和服務業務將面臨與整合相關的阻力，這種阻力將延續到第三和第四季度，然後在2024 年第一季有所改善。在第四季的財報電話會議上，我們討論了我們在二手貨採購方面採取更積極立場的承諾。與 2023 年第四季相比，我們維持了同店 PVR 的季度環比增長，同店銷量增加了 9% 以上，即 2,700 台。

Now for our consolidated results for the first quarter. We generated $4.2 billion in revenue, had a gross profit margin of 17.9%, and our SG&A as a percentage of gross profit was 62.5%. We delivered an operating margin of 6.3%. Our earnings per share was $7.21 and our EBITDA was $259 million. As part of our multiyear capital allocation plan, we repurchased 240,000 shares for $50 million in the first quarter. We continue to be opportunistic with our capital deployment, prioritizing the most strategic and accretive use of capital.

現在是我們第一季的綜合業績。我們的營收為 42 億美元，毛利率為 17.9%，SG&A 佔毛利的百分比為 62.5%。我們的營業利益率為 6.3%。我們的每股盈餘為 7.21 美元，EBITDA 為 2.59 億美元。作為我們多年資本配置計劃的一部分，我們在第一季以 5,000 萬美元回購了 240,000 股股票。我們繼續以機會主義方式進行資本部署，優先考慮最具策略性和增值性的資本使用。

We continuously evaluate the performance of our portfolio, making acquisitions or divestitures where it makes the most sense. We divested a Lexus store in Delaware during the first quarter per our OEM framework agreement, and we will monitor opportunities to make other changes to the portfolio throughout the year. Looking ahead, there are factors like our brand mix that may influence our volumes on new and lead to near-term headwinds on performance. We are still in a tight market when it comes to sourcing quality used vehicles efficiently, and we will continue to prioritize profitable growth.

我們不斷評估投資組合的績效，在最有意義的情況下進行收購或剝離。根據我們的 OEM 框架協議，我們在第一季度剝離了特拉華州的雷克薩斯商店，我們將在全年監控對產品組合進行其他更改的機會。展望未來，我們的品牌組合等因素可能會影響我們的新品銷量，並導致近期業績出現阻力。在有效採購優質二手車方面，我們仍然處於緊張的市場中，我們將繼續優先考慮獲利成長。

I'd also like to highlight that we published our corporate responsibility report this month. We invite you to read it if you haven't already. Now before I hand the call over to Dan, I want to say thank you again to our team members as together we strive to be the most guest-centric automotive retailer. Now Dan will discuss our operational performance. Dan?

我還想強調，我們本月發布了企業責任報告。如果您還沒有閱讀過，我們邀請您閱讀。現在，在將電話交給 Dan 之前，我想再次向我們的團隊成員表示感謝，我們共同努力成為最以客人為中心的汽車零售商。現在丹將討論我們的營運績效。擔？

Thank you, David, and good morning, everyone. I'll join David in also thanking our team members driving our strong results and delivering a best-in-class experience. Now moving to same-store performance, which includes dealerships and TCA unless stated otherwise.

謝謝大衛，大家早安。我還將與 David 一起感謝我們的團隊成員，他們推動我們取得了優異的成績，並提供了一流的體驗。現在轉向同店業績，除非另有說明，包括經銷商和 TCA。

Starting with new vehicles. Overall, we were pleased with our new vehicle PVR performance given current market conditions. Same-store revenue decreased 1%, and new unit volume was flat to prior year. New average gross profit per vehicle was $3,988, and the new vehicle gross margin was 7.8%. Our same-store new days supply was 53 days at the end of March compared to 43 days at the end of the fourth quarter, a trend consistent with industry-wide growth in inventory. We continue to manage to an appropriate days supply and volume in new cars, given our brand mix.

從新車開始。總體而言，考慮到當前的市場狀況，我們對新車 PVR 的性能感到滿意。同店營收下降 1%，新銷量與去年持平。新車平均每輛車毛利為3,988美元，新車毛利率為7.8%。 3 月底，我們的同店新貨天數為 53 天，而第四季末為 43 天，這一趨勢與全行業庫存增長一致。鑑於我們的品牌組合，我們將繼續管理適當的新車供應天數和數量。

Turning to used vehicles. Used retail revenue decreased 4% for the quarter as we expected due to lower cost of sales. Unit volume, while down less than 2% year-over-year increased on a sequential basis, as David mentioned earlier. Used retail gross profit per vehicle was $1,647, roughly in line with the fourth quarter of 2023. We appreciate the progress of the team's performance on volume and gross profit in such a challenging environment. Our same-store used DSI was 25 days supply. We still view 2024 as a challenging year to acquire preowned vehicles until supply returns.

轉向二手車。由於銷售成本下降，本季二手零售收入下降 4%，正如我們預期的那樣。正如 David 之前提到的，單位銷量雖然同比下降不到 2%，但環比有所增加。每輛車的二手零售毛利潤為 1,647 美元，大致與 2023 年第四季持平。我們同店使用的DSI是25天的供應量。在供應恢復之前，我們仍然認為 2024 年對於購買二手車來說是充滿挑戰的一年。

Shifting to F&I. We delivered an F&I PVR of $2,218 in the quarter, holding resilient amidst continued pressure on consumer payments. On a consolidated all-store basis, our PVR was $2,259. The deferred revenue headwind of TCA contributed $67 of the $85 decrease in the consolidated F&I PVR number year-over-year, and we anticipate this headwind to be impactful throughout 2024. In the first quarter, our total front-end yield per vehicle was $5,080.

轉向金融與工業。我們本季的 F&I PVR 為 2,218 美元，在消費者支付持續面臨壓力的情況下保持彈性。在綜合所有商店的基礎上，我們的 PVR 為 2,259 美元。綜合 F&I PVR 數量將年減 85 美元，TCA 的遞延收入逆風貢獻了 67 美元，我們預計這一逆風將在整個 2024 年產生影響。

Moving to parts and service. Our parts and service gross profit grew 6%, and we earned a gross profit margin of 56.9%, an expansion of 213 basis points versus prior year first quarter, despite weather issues in several of our markets. The last several quarters, as we mentioned, were impacted by integration efforts, and it is encouraging to see our fixed operations business returning to growth. The hard work of our teammates and leaders is paying off, and we expect even better performance in the quarters ahead.

轉向零件和服務。儘管我們的幾個市場出現天氣問題，但我們的零件和服務毛利潤增長了 6%，毛利率達到 56.9%，比去年第一季增長了 213 個基點。正如我們所提到的，過去幾季受到整合工作的影響，看到我們的固定營運業務恢復成長令人鼓舞。我們的隊友和領導者的辛勤工作正在得到回報，我們預計未來幾季會有更好的表現。

Finally, on a same-store basis, we retailed 10,832 units through Clicklane or about 16% of overall units. New vehicle represented 5,186 of these units, a 14% increase in new volume over first quarter last year, and those vehicles are making up a larger portion of Clicklane transactions versus the first quarter of 2023. Consistent with recent trends, over 90% of customers are new customers to Asbury, and we remain committed to this key differentiating omnichannel tool. I will now hand the call over to Michael to discuss our financial performance. Michael?

最後，以同店計算，我們透過 Clicklane 零售了 10,832 件商品，約佔總銷量的 16%。其中新車數量為5,186 輛，較去年第一季新增銷量增加14%，與2023 年第一季相比，這些車輛在Clicklane 交易中所佔的比例更大。的客戶是 Asbury 的新客戶，我們仍然致力於這項關鍵的差異化全通路工具。我現在將把電話轉給邁克爾，討論我們的財務表現。麥可？

Thank you, Dan, to our investors, analysts, team members and other participants on our call, good morning. I would like to provide some financial highlights for our company. For additional details on our financial performance for the quarter, please see our financial supplement in our press release today and our investor presentation on our website. Overall, net income was $147.1 million, and EPS was $7.21 for the quarter. There were no non-GAAP adjustments to net income for the first quarter of 2024 or 2023.

謝謝丹，我們的投資者、分析師、團隊成員和其他參加我們電話會議的參與者，早安。我想提供一些我們公司的財務亮點。有關我們本季度財務業績的更多詳細信息，請參閱我們今天新聞稿中的財務補充以及我們網站上的投資者介紹。總體而言，本季淨利潤為 1.471 億美元，每股收益為 7.21 美元。 2024 年或 2023 年第一季淨利沒有進行非 GAAP 調整。

SG&A as a percentage of gross profit came in at 62.5% versus 61% in the fourth quarter 2023, driven by higher service loaner costs, elevated advertising expenses and several Q1 specific costs, namely share-based compensation. For the year, we expect SG&A as a percentage of gross profit to be in the low 60s.

SG&A 佔毛利的百分比為 62.5%，而 2023 年第四季為 61%，原因是服務借貸成本上升、廣告費用增加以及第一季的一些特定成本（即基於股份的薪酬）。今年，我們預計 SG&A 佔毛利的百分比將在 60 左右。

Tax rate for the quarter was 24.9%, and we estimate our tax rate for the full year 2024 to be approximately 25%.

本季的稅率為 24.9%，我們預計 2024 年全年的稅率約為 25%。

TCA generated $19.5 million of pretax income in the first quarter, and we anticipate full year results to be between $30 million and $45 million on a pretax basis. We plan to offer TCA across our remaining stores in Florida and Koons later this year. For the quarter, we generated $209 million of adjusted operating cash flow, a portion of which was used towards our previously mentioned share repurchase activity.

TCA 第一季產生了 1,950 萬美元的稅前收入，我們預計全年稅前業績將在 3,000 萬美元至 4,500 萬美元之間。我們計劃今年稍後在佛羅裡達州和昆斯的其餘商店提供 TCA。本季度，我們產生了 2.09 億美元的調整後營運現金流，其中一部分用於我們先前提到的股票回購活動。

Excluding real estate purchases, we spent $26 million on capital expenditures in the first quarter, and we anticipate full year spend to be $200 million to $225 million. Free cash flow was $183 million for the quarter.

不包括房地產購買，我們第一季的資本支出為 2,600 萬美元，預計全年支出為 2 億至 2.25 億美元。該季度自由現金流為 1.83 億美元。

We ended the quarter with $712 million of liquidity, comprised of floorplan offset accounts, availability on both our used line and revolving credit facility and cash, excluding cash at Total Care Auto.

本季結束時，我們擁有 7.12 億美元的流動資金，包括平面圖抵銷帳戶、已使用額度和循環信貸額度的可用性以及現金，不包括 Total Care Auto 的現金。

While we will continue to use our floorplan offset account to manage interest expense, we expect floor plan costs to remain relatively flat through the year as we balance the impact of rising inventory levels with the opportunity cost of deploying the cash to more accretive activities.

雖然我們將繼續使用平面圖抵銷帳戶來管理利息支出，但我們預計平面圖成本將全年保持相對平穩，因為我們平衡了庫存水準上升的影響與將現金部署到更多增值活動的機會成本。

Our pro forma adjusted net leverage was 2.6x at the end of March, and we will continue to be opportunistic in our capital allocation approach across share buybacks, M&A and organic investment opportunities.

截至 3 月底，我們的預期調整後淨槓桿率為 2.6 倍，我們將繼續在股票回購、併購和有機投資機會的資本配置方法中保持機會主義。

Finally, I would like to join David and Dan as we thank our valued team members and leaders for a strong quarter and start to the year. Thank you. This concludes our prepared remarks. We will now turn the call over to the operator, and thanks for your questions. Operator?

最後，我想與大衛和丹一起感謝我們尊貴的團隊成員和領導者為我們帶來了強勁的季度和今年的開局。謝謝。我們準備好的演講到此結束。我們現在將把電話轉給接線員，感謝您的提問。操作員？

Thank you.

謝謝。

(Operator's Instructions)

（操作員說明）

Our first question comes from the line of John Murphy with Bank of America.

我們的第一個問題來自美國銀行的約翰‧墨菲。

Just one quick question on the store that was sold per framework agreement. I'm just curious if you can sort of discuss what that brand is or was? And how the framework agreements are potentially morphing or easing as you guys are on the acquisition pace and other stronger acquisition pace or maybe not changing at all?

只是一個關於根據框架協議出售的商店的簡單問題。我只是好奇你是否可以討論一下這個品牌是什麼或曾經是什麼？隨著你們的收購步伐和其他更強的收購步伐，框架協議可能會如何變化或放鬆，或者可能根本沒有改變？

Sure, John. This is David. I'll take my best shot at it. The store we divested of was a Lexus store. We are limited in every framework agreement we have with, and every manufacturer is different. And we're limited to only own 8 Lexus stores in the U.S., and that's consistent with the brand, whether you're public or private. So whenever we buy a group that has a Lexus store and then if we're capped at 8 and we have 8, it's always going to include a divestiture at some point in time. There's extreme differences within framework agreements between all manufacturers. So there's no easy way of stating it. But I'll tell you, our framework agreements haven't changed in a while. Some have been updated in the last couple of years. And based upon our geographic locations of our stores and our brand mix, we're not governed at this point to grow, other than with specifically the number of Lexus stores we have.

當然，約翰。這是大衛。我會盡我最大的努力。我們剝離的商店是雷克薩斯商店。我們與我們簽訂的每一項框架協議都受到限制，而且每個製造商都是不同的。我們在美國祇能擁有 8 家雷克薩斯專賣店，這與該品牌是一致的，無論是公立還是私立。因此，每當我們收購擁有雷克薩斯專賣店的集團時，如果我們的上限為 8 家，而我們擁有 8 家，那麼總會在某個時間點進行資產剝離。所有製造商之間的框架協議存在極大差異。所以沒有簡單的方法來表達它。但我告訴你，我們的框架協議已經有一段時間沒有改變了。其中一些在過去幾年中進行了更新。根據我們商店的地理位置和我們的品牌組合，除了我們擁有的雷克薩斯商店數量外，我們目前還沒有成長的約束。

Got it. Okay. That's very helpful. And then the used environment seems like it's challenging from a supply standpoint. Given that we've sold so few vehicles -- new vehicles in the past 3 or 4 years, when is your expectation of that supply actually improving? It seems like that's more like potentially even a '26 event as opposed to a '25? And what can you do in the interim to deal with that shortage?

知道了。好的。這非常有幫助。從供應的角度來看，使用的環境似乎具有挑戰性。鑑於我們在過去 3 或 4 年內售出的車輛（新車）如此之少，您對供應量的預期何時會真正改善？看起來這更像是 26 年的活動，而不是 25 年的活動？在此期間您可以採取什麼措施來解決這種短缺問題？

Generally, we've been focused on gross profit over volume. And as we said in the fourth quarter, we're going to kind of pivot a little bit. Historically, our company purchases about 10% outside of our structure, cars to bring in to sell. Last quarter was about 20%, which obviously put pressure on our PVR. To your point, really since COVID began - through 3 years forward, there's really a depletion of multiple millions of vehicles that didn't hit the market. So we're in that pool now where this year, and I believe next year too is going to be a more challenging year. I think this is the toughest year. I think you get some relief next year with some fleet business from rental car companies and that stuff. But I would think normalization would be early '26 potentially into '25.

一般來說，我們一直關注毛利而不是銷量。正如我們在第四季度所說，我們將進行一些調整。從歷史上看，我們公司在我們的結構之外購買大約 10% 的汽車來出售。上季大概是20%左右，顯然給我們的PVR帶來了壓力。就你的觀點而言，自從新冠疫情爆發以來，三年來，確實有數百萬輛汽車沒有推出市場。所以我們現在就在這個池子裡，今年，我相信明年也將是更具挑戰性的一年。我認為今年是最艱難的一年。我認為明年你會因為租賃汽車公司等的一些車隊業務而得到一些緩解。但我認為正常化將在 26 年初，可能會持續到 25 年。

Got it. And then just one last one on parts and service. I mean 6% was great. It was actually up against a somewhat tough comp. As we think about the rest of the year, the comps get a bit easier. It sounds like you're making progress in acquired stores that are going into the base. Could we think about a 5% plus parts and service or sort of high single-digit parts and service same-store sales comp maybe for the remainder of the year and potentially maybe even beyond that?

知道了。然後是關於零件和服務的最後一項。我的意思是 6% 已經很棒了。它實際上是面對一個有點艱難的比賽。當我們考慮今年剩下的時間時，比賽會變得更容易一些。聽起來你在收購進入基地的商店方面正在取得進展。我們是否可以考慮在今年剩餘時間內，甚至可能超出這個範圍，使零件和服務的同店銷售收入增加 5% 以上，或者某種高個位數的零件和服務同店銷售收入？

John, this is Dan. I'll start and then David can add on whatever I miss. Yes, we're very happy with the progress that the team members are making and have shown over the past few quarters as we integrated the new acquisition. And to answer your question directly, yes, I think that that's a realistic target as we continue through 2024 meaning the 5% growth.

約翰，這是丹。我先開始，然後大衛可以補充我錯過的任何內容。是的，我們對團隊成員在過去幾季整合新收購專案時所取得的進展感到非常滿意。直接回答你的問題，是的，我認為這是一個現實的目標，因為我們將持續到 2024 年，也就是 5% 的成長。

No, John, I really don't have anything to add. I would tell you we're pleased with the margin increase. Like everyone else in the first quarter, we suffered some shutdown of some days in the Mountain States because of heavy weather. Between Colorado and Utah and Idaho, we have almost 40 stores, I think, 38 stores to be specific. And we had multiple days that we were shut down and you just can't make up for those fixed days. But as Dan stated, the progress is certainly good. It's continuing into this quarter. And to your point, the second half of the year as our comps get easier. So we should certainly see a minimum of 5% or greater.

不，約翰，我真的沒有什麼好補充的。我想告訴你，我們對利潤率的增加感到滿意。與第一季的其他公司一樣，我們在山區各州因惡劣天氣而停工了幾天。在科羅拉多州、猶他州和愛達荷州，我們擁有近 40 家商店，具體來說，我認為有 38 家商店。我們有好幾天都被關閉，你無法彌補那些固定的日子。但正如丹所說，進展肯定是好的。這種情況一直持續到本季。就你而言，下半年我們的比賽會變得更容易。所以我們肯定會看到至少 5% 或更高。

Our next question comes from the line of Rajat Gupta with JPMorgan.

我們的下一個問題來自 Rajat Gupta 與摩根大通的對話。

Great. Just had a question on SG&A first. It looks like there was some deleveraging here in the quarter because of the weak domestic brand unit sales and maybe still a little slower growth in service business. But curious, as the service business now returns to mid-single-digit type growth and whatever you're embedding in terms of new GPU expectations for the course of the year? And how should we think about that SG&A to gross ratio moving forward from these levels? And I have a quick follow-up.

偉大的。我首先有一個關於 SG&A 的問題。由於國內品牌銷售疲軟，服務業務的成長可能仍略有放緩，本季似乎出現了一些去槓桿化的情況。但令人好奇的是，隨著服務業務現在恢復到中個位數成長，以及您對今年新 GPU 的預期有何嵌入？我們應該如何看待 SG&A 與毛利率從這些水準向前發展的情況？我有一個快速的跟進。

This is Michael. On the SG&A side, we'll have the continued decline in new vehicle gross profit, which will put pressure on the SG&A. But to your point, the return of fixed ops to good growth and then a few items that are unique to the first quarter that we're going to be able to cut some costs out later in the year. We think we can hold these kind of low 60s levels for SG&A percentage of gross going forward.

這是邁克爾。在SG&A方面，新車毛利將持續下降，這將對SG&A帶來壓力。但就你而言，固定營運恢復良好成長，然後是第一季特有的一些項目，我們將能夠在今年稍後削減一些成本。我們認為，未來 SG&A 佔總收入的百分比可以維持在 60 多歲的低水準。

And Rajat, I'll just add to that. While the domestic volume was not great, I still think PVR, like $3,900 all is extremely healthy. And certainly, you can maintain SG&A costs in that market. Brands are cyclical as far as how as they go. We have a heavy mix of Stellantis. And it was a tough quarter for Stellantis as everybody knows, and certainly was for us as well. But we know over time that will change.

Rajat，我補充一下。雖然國內銷量不是很大，但我仍然認為 PVR 3,900 美元的價格非常健康。當然，您可以維持該市場的 SG&A 成本。就其發展方式而言，品牌具有週期性。我們有大量的 Stellantis 混合物。眾所周知，這對 Stellantis 來說是一個艱難的季度，對我們來說當然也是如此。但我們知道隨著時間的推移，這種情況將會改變。

And what's the kind of like GPU decline like you or assuming like the same pace for the rest of the year, like on the first quarter or...

像你這樣的 GPU 下降是怎麼樣的，或者假設今年剩餘時間保持同樣的速度，例如第一季或…

Yes, our assumption is $300 a quarter, but you could have a plus/minus in any given quarter to kind of the natural trend of kind of $300 over the next few quarters.

是的，我們的假設是每季 300 美元，但在任何給定季度中，您都可能會出現正負值，從而形成未來幾季 300 美元的自然趨勢。

Got it. Got it. And just a follow-up on capital allocation. You mentioned earlier on like using the floor plan offset as like a lever to manage for those floor plan expenses. But you did buy back some stock here in the first quarter. Like how should we think about that decision between buyback versus M&A in the current backdrop and what you're seeing in your pipeline for deals today?

知道了。知道了。這只是資本配置的後續行動。您之前提到過，喜歡使用平面圖偏移作為管理這些平面圖費用的槓桿。但你確實在第一季回購了一些股票。例如，在當前背景下，我們應該如何考慮回購與併購之間的決定，以及您今天在交易中看到的情況？

I would say our opinion, we're proud of our business and our operating margins, and we think that our multiple is low. And generally, when you look at that, it seems like it's a better return to potentially look at stock buybacks. In the current market that we're in, there's certainly a lot of stores on the market from an M&A standpoint. But I think we really want to be extremely selective. It's never been about the growth for us and how large we get. It's really about the returns for our shareholders and how well we run our business. So every month, we're constantly evaluating what's the best use of capital. But I would say from an acquisition standpoint, it would have to be something that was accretive for us and really interesting for us at this stage.

我想說的是，我們對我們的業務和營業利潤率感到自豪，我們認為我們的本益比很低。一般來說，當你看到這一點時，似乎考慮股票回購可能會帶來更好的回報。在我們目前所處的市場中，從併購的角度來看，市場上肯定有很多商店。但我認為我們真的想要非常有選擇性。這從來都不是關於我們的成長以及我們的規模有多大。這實際上關係到我們股東的回報以及我們的業務運作。因此，我們每個月都會不斷評估什麼是資本的最佳利用方式。但我想說，從收購的角度來看，它必須是對我們有增值作用並且在現階段對我們來說真正有趣的東西。

And on the floor plan expense side, the increase in inventory over the rest of the year and then some of the cash will be able to put to the offset count. We think that floor plan expense number for the first quarter will continue through the rest of the year, again, increased inventory and then a little bit of cash going into the offset account.

在平面圖費用方面，今年剩餘時間庫存的增加以及一些現金將能夠用於抵消計數。我們認為第一季的平面圖支出數字將持續到今年剩餘時間，同樣，庫存增加，然後少量現金進入抵銷帳戶。

Our next question comes from the line of Ryan Sigdahl with Craig Hallum Capital Group.

我們的下一個問題來自 Craig Hallum Capital Group 的 Ryan Sigdahl。

I want to stay on the used side. So you have challenges on the used vehicle supply that's fairly obvious across the industry. Your GPU was down sequentially despite favorable industry seasonality or peers being up, et cetera. So I guess curious to dig a little bit deeper on your takeaways, kind of in early metrics, positive and negative from leaning more into volume relative to your internal expectations when you made that strategy pivot.

我想留在二手的一邊。因此，二手車供應面臨著整個產業相當明顯的挑戰。儘管行業季節性有利或同業上漲等，但您的 GPU 卻連續下降。因此，我想更深入地挖掘你的收穫，在早期指標中，積極和消極的方面是，當你制定策略時，相對於你的內在期望，更傾向於數量。

Yes. And I mentioned it earlier. I would say we -- percentage-wise, we doubled the number of cars we purchase. We make significantly less gross profit on a vehicle that we have to purchase because we're competing to buy it within the market. When we trade in a vehicle, we're still north of $2,000 a vehicle, and we think that's very healthy. Some of the benefits, I'm sure our peers have discussed it in the past, -- is your parts and service increased business from reconditioning cost and the F&I income that you pick up as well. But there still has to be a healthy balance, and you really have to make sure you maintain what we would think would consider a healthy front-end margin on preowned. Dan, I don't know if there's any you want to add.

是的。我之前有提到過。我想說，從百分比來看，我們購買的汽車數量增加了一倍。我們在必須購買的車輛上獲得的毛利大大減少，因為我們在市場上競爭購買它。當我們進行車輛交易時，每輛車的價格仍然高於 2,000 美元，我們認為這是非常健康的。我相信我們的同行過去已經討論過，其中一些好處是您的零件和服務透過翻新成本以及您獲得的 F&I 收入增加了業務。但仍然必須保持健康的平衡，並且您確實必須確保維持我們認為的二手車前端利潤率。丹，我不知道你還有什麼要補充的嗎？

I'll just add a little bit more color. And yes, we saw sequentially dropping, I think, from $1,666 to $1,647 from a PVR standpoint, back to your point. But then from a new car -- I mean, from a used cost standpoint, I believe we increased it 9% sequentially quarter-over-quarter. And that just goes to validate the strategy adjustment that we made that we announced at the end of Q4 in 2023, that we were going to get more aggressive, go after the volume because we know. back to what David stated, the benefits that it brings to our internal gross profit in parts and service, F&I and then obviously, putting another unit in operation out there that we can service down the road.

我只會添加一點顏色。是的，我認為，從 PVR 的角度來看，我們看到了從 1,666 美元到 1,647 美元的連續下降，回到了你的觀點。但從新車來看——我的意思是，從二手車成本的角度來看，我相信我們的成本比去年同期成長了 9%。這只是驗證了我們在 2023 年第四季末宣布的策略調整，我們將變得更加積極，追求銷量，因為我們知道。回到大衛所說的，它為我們在零件和服務、F&I 方面的內部毛利帶來的好處，然後顯然，讓另一個部門投入運營，我們可以在未來提供服務。

Helpful. Anything else on -- from a regional standpoint? I know you called out some weather impact, but anything Southeast, Southwest, Texas to call out?

有幫助。從地區的角度來看，還有其他的事情嗎？我知道你提到了一些天氣影響，但是東南部、西南部、德克薩斯州有什麼需要指出的嗎？

No, I would say -- I mean, for us, it was fairly stable. We saw a little bit of a hit for us in full-size trucks, from a year-over-year perspective. But the imports performed extremely well. We have a very low days supply of them, probably could have done better there as well. We had the tough headwind for Stellantis, but the other 2 domestic brands held up pretty well in the quarter. And luxury is very stable for us. So all in all, based upon the market and what went on in the first quarter, we're pleased with what the team did from a performance standpoint.

不，我想說——我的意思是，對我們來說，它相當穩定。從同比的角度來看，我們看到全尺寸卡車受到了一些打擊。但進口產品的表現卻非常出色。我們的供應天數非常少，也許那裡也可以做得更好。 Stellantis 面臨嚴峻的阻力，但其他兩個國內品牌在本季表現得相當好。奢侈品對我們來說非常穩定。總而言之，根據市場和第一季的情況，從績效的角度來看，我們對團隊的表現感到滿意。

[Operator's Instructions)

[操作者須知]

Our next question comes from the line of Bret Jordan with Jefferies.

我們的下一個問題來自布雷特·喬丹和傑弗里斯的對話。

New GPUs, I think you talked about $300 a quarter for the next few quarters. Is it reasonable to think then the $3,000-ish is the -- is what you expect to be the new base level for new GPUs?

新的 GPU，我想你談到了接下來幾個季度每季 300 美元。您認為 3,000 美元左右的價格是否會成為新 GPU 的新基準水平？

Yes. Bret, this is David. It's really tough to navigate. Will it be rate drops throughout the year. How aggressive do the incentives get. It still the adage of supply and demand. Right now, the demand is high on imports, the days supply is low, so the margins are holding up really well. In the near term, we don't see that dramatically changing. So we think that holds up pretty well. Even back in '19 and before, our domestic gross profits were always pretty healthy, because now the amount of domestic stores we've added out in the Mountain States, we anticipate that we'll do well and certainly above what '19 did. And luxury is going to be mixed as well, but that's a pretty resilient market. Our margins are still really high. There may be some fall off there. But we think wherever the falloff is it's significantly above where it was in the past, which gives us a good edge into keeping our SG&A down.

是的。布雷特，這是大衛。導航真的很難。全年利率會下降嗎？激勵措施有多激進。這仍然是供給和需求的格言。目前，進口需求很高，供應量很低，因此利潤率保持得很好。在短期內，我們看不到這種情況會發生巨大變化。所以我們認為這非常有效。即使在 19 年及之前，我們的國內毛利潤也一直相當健康，因為現在我們在山區各州增加的國內商店數量，我們預計我們會做得很好，而且肯定會高於 19 年的表現。奢侈品也將好壞參半，但這是一個相當有彈性的市場。我們的利潤率仍然很高。那裡可能會有一些脫落。但我們認為，無論下降在哪裡，它都明顯高於過去的水平，這使我們有很好的優勢來降低 SG&A。

Okay. And then on Clicklane. -- you talked in the past about those transactions usually physically close to the selling dealership. Is that still the case? And I guess, what are you seeing in F&I attachment in those online transactions?

好的。然後在 Clicklane 上。 ——您過去曾談到那些通常距離銷售經銷商較近的交易。現在還是這樣嗎？我想，您在這些線上交易的 F&I 附件中看到了什麼？

Brett, this is Dan. Yes, we are still seeing the average delivery distance in Q1 of 2024 was 49 miles. So pretty consistent to what we have seen in Q4 '23, that was 51. And then just as a reference point in Q3 of '23 was 40 miles. So pretty consistent with what we're seeing there. From an F&I PVR, we are looking at for Q1 of '24, we finished around $2,190 a car, which is slightly below about 1.3% below sequentially and about 3.7% behind last year. So we are happy with the numbers. Like I stated in my script earlier today, we're committed to this omnichannel, and we strongly believe that it is going to continue to enhance the guest experience.

布雷特，這是丹。是的，我們仍然看到 2024 年第一季的平均配送距離為 49 英里。與我們在 23 年第 4 季看到的情況非常一致，即 51 英里。 然後作為 23 年第 3 季的參考點是 40 英里。與我們在那裡看到的非常一致。根據 F&I PVR，我們預計 24 年第一季度，每輛車的售價約為 2,190 美元，比上一季略低約 1.3%，比去年低約 3.7%。所以我們對這些數字感到滿意。就像我今天早些時候在腳本中所說的那樣，我們致力於這種全渠道，我們堅信它將繼續增強賓客體驗。

Great. And I could slip one more in. I guess, what are you seeing on OEM lease promotions? Are they ramping up lease focus in the lines where inventory is building or is that pretty stable?

偉大的。我還可以再塞進去一張。他們是否在庫存增加的領域加大租賃力度，還是相當穩定？

We are starting to see, yes, increasing slightly. And obviously, it depends by OEM as well. But to answer your question directly, yes, we're starting to see a slight increase.

是的，我們開始看到略有增加。顯然，這也取決於 OEM。但直接回答你的問題，是的，我們開始看到略有增加。

Our next question comes from the line of David Whiston with Morningstar.

我們的下一個問題來自大衛惠斯頓與晨星公司的對話。

First, a 2-part question on consumers' willingness to spend. Unit volume for luxury was down just a little bit, whereas as you noted, import is doing quite well still on the volume side. And so is there any hesitation with luxury customers on spending money in any way? And then also across all of your segments of volume, more luxury, is there any hesitation on consumers in terms of not getting a vehicle option they would have a few years ago or not doing TCA or not getting an F&I product attachment they would have earlier?

首先，關於消費者消費意願的問題分為兩部分。奢侈品的單位銷售量略有下降，而正如您所指出的，進口在銷售方面仍然表現良好。那麼奢侈品消費者在以任何方式花錢時是否會猶豫呢？然後，在您的所有銷售細分市場中，更豪華的產品中，消費者是否會猶豫是否不獲得幾年前擁有的車輛選擇、不進行 TCA 或不獲得他們之前擁有的 F&I 產品附件？

It's a great question. I would tell you with any new hot luxury vehicle that comes out regardless of the price point, they sell right away, they're presold. So I think it's more of a timing issue. From our perspective, we view the first quarter as being stable, and we actually thought it was pretty good. There's still some transitioning within the luxury brands with model mix and timing, and you never have enough of the SUVs and you might have a few extra EVs, and that's balancing out as well. But I think it's pretty healthy there, and that luxury customer is pretty resilient. When you get to the import side, and even domestic, and then Dan could add more color to this than I can. But you're reaching a price point with those interest rates where they are, it's affecting the F&I numbers a little bit. It's affecting the cost of sale.

這是一個很好的問題。我會告訴你，任何新推出的熱門豪華車，無論價格如何，它們都會立即出售，它們會被預售。所以我認為這更多的是一個時間問題。從我們的角度來看，我們認為第一季是穩定的，而且我們實際上認為它相當不錯。豪華品牌內部仍然存在一些車型組合和時機方面的轉變，SUV 永遠不夠，你可能會擁有一些額外的電動車，這也是平衡的。但我認為那裡的情況相當健康，奢侈品客戶也很有彈性。當你談到進口方面，甚至是國內方面時，丹可以比我添加更多的色彩。但利率已經達到了某個價格點，這對 F&I 數據產生了一些影響。它影響著銷售成本。

You've seen it come down. I think our cost of sale on used was back in '22 at a high of like [$32,500] (corrected by company after the call) -- so it's down dramatically and it's continuing to come down. But on the new side, it's only coming down slightly because the build probably hasn't caught up yet. So there is a little bit of pressure, but still, again, on the import side, if there's a new product coming out, like anything else. The demand is higher than supply and the margins are holding up well. So the market, we feel has been pretty resilient. We don't think that we can sustain another rate increase or 2, I think that would be a little painful for us. But so far, I would say, generally speaking, the customer base has been fairly resilient. Dan anything you want to add?

你已經看到它掉下來了。我認為我們的二手銷售成本回到了 22 年的高位，大約為 [32,500 美元]（公司在電話會議後進行了修正）——所以它大幅下降，並且還在繼續下降。但在新的方面，它只是略有下降，因為構建可能還沒有跟上。因此，存在一點壓力，但仍然是在進口方面，如果有新產品問世，就像其他產品一樣。需求高於供應，利潤率保持良好。因此，我們認為市場相當有彈性。我們認為我們無法再維持一次或兩次升息，我認為這對我們來說會有點痛苦。但到目前為止，我想說，總的來說，客戶群相當有彈性。丹，你還有什麼要補充的嗎？

I agree, nothing to add.

我同意，沒什麼好補充的。

Okay. On the balance sheet and capital allocation, there's buybacks and M&A, but there's also possibly debt reduction, but the earnings normalizing, do you feel the need to accelerate that reduction at some point this year?

好的。在資產負債表和資本配置上，有回購和併購，但也有可能減少債務，但獲利正常化，你覺得今年某個時候有必要加速減少嗎？

No. I mean our stated range is kind of 2.5x to 3x. If we don't find anything good returns, and debt would be good, but the share buybacks and acquisitions are good allocations - but we don't need to get it down kind of into the below 2.5x. But we'd like to be in this kind of mid-2% range with the EBITDA coming down -- or the gross profit coming down on the new vehicle side.

不，我的意思是我們規定的範圍是 2.5 倍到 3 倍。如果我們沒有找到任何好的回報，債務會很好，但股票回購和收購是很好的配置——但我們不需要將其降低到 2.5 倍以下。但我們希望在 EBITDA 下降的情況下保持在 2% 左右的範圍內，或者說新車方面的毛利下降。

And I would say with the stacks we have out there with the bonds, you can only chip away so much of it. And the big stack that's in '26 is really mortgages at considering the rates in the market significantly lower than what the market rates are. So it's really tough to justify taking that capital and paying off 3% debt.

我想說的是，就我們現有的債券堆疊而言，你只能削減其中的大部分。考慮到市場利率明顯低於市場利率，26 年的大筆貸款實際上是抵押貸款。因此，很難證明拿走這筆資金並償還 3% 的債務是合理的。

Okay. And on -- you mentioned you probably can't handle rates going up much. But if we were to actually get even one rate cut, is that going to matter in your opinion this year? Or do we need multiple rate cuts for the consumer to feel better?

好的。還有——您提到您可能無法應對利率大幅上漲。但如果我們真的要降息一次，您認為今年這會很重要嗎？或者我們需要多次降息才能讓消費者感覺好一點？

Yes. This is just an opinion. Obviously, no way of knowing, but I don't think one rate cut is going to -- it's a nice park. It will probably do well for the market for the day or so. But from our standpoint, it probably needs 2 or 3 rate cuts for us to really, what I would call a tailwind for us.

是的。這只是一個意見。顯然，沒有辦法知道，但我認為一次降息不會——這是一個不錯的公園。當天左右的市場可能會表現良好。但從我們的角度來看，可能需要降息 2 到 3 次才能真正實現我所說的順風車。

Thank you. Ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the call back to David Hult for closing remarks.

謝謝。女士們、先生們，問答環節到此結束。我想將電話轉回給大衛·霍特，讓其致閉幕詞。

Thank you, operator. This concludes our call today. We appreciate everyone's participation, and we're looking forward to speaking with all of you at the end of the second quarter. Have a great day.

謝謝你，接線生。我們今天的電話會議到此結束。我們感謝大家的參與，我們期待在第二季末與大家交談。祝你有美好的一天。

This concludes today's conference. You may now disconnect your lines at this time. Enjoy the rest of your day.

今天的會議到此結束。此時您可以斷開線路。享受你一天剩下的時間。