Jeff Liquid's questions to Asbury Automotive Group Inc (ABG) leadership • Q3 2024
Question
Jeff Liquid questioned the future trajectory of SG&A as a percentage of gross profit, especially with the planned Tekion DMS rollout, and asked if the current F&I PVR represents a new base level given headwinds from the Total Care Auto (TCA) business.
Answer
SVP & CFO Michael Welch projected SG&A to remain in the mid-60s in the near term but anticipates long-term benefits from Tekion driving the metric into the 50s by late 2026 or 2027. Welch and President & CEO David Hult clarified that the F&I PVR will face significant headwinds in 2025 and 2026 due to TCA's deferred revenue model, with a notable impact expected in the second half of 2025.