Asbury Automotive is pulling out of the Mississippi auto market, according to the company’s fourth-quarter earnings report. The auto group plans to divest all five of its dealerships in the state, which brought in approximately $334 million in yearly revenue.
“Our returns [on the Mississippi stores] haven’t been what the company averages are,” said Chief Executive David Hult during the call, noting that it has been difficult to manage the market.
The deal, expected to close in March, comes on the heels of Asbury’s acquisition of 20 Park Place franchises, a Dallas-based luxury chain expected to generate $1.9 billion in annual revenue. That deal is also expected to close in March.
Asbury also divested a Nissan store in Atlanta that brought in about $77 million in revenue. It is the fourth Nissan dealership the auto group has sold in the last 12 months, Hult said, noting that he expects to use the capital from the sales to focus on different regions.
Across its 89 dealerships, used-vehicle sales climbed 8% to 88,602 units in 2019, while new-vehicle sales remained mostly flat, at 105,243 units. Still, revenue jumped 5% to $7.2 billion, largely due to high profit margins on its parts and services offerings. Looking ahead, the focus for 2020 will be on paying down debt, reducing costs and expanding its footprint in the Colorado market, Hult said.
Shares of Asbury (NYSE: ABG) were trading at $99.64 at press time. The auto group has a market capitalization of $1.93 billion.
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