Aggressive dealership acquisition strategies and consumer-centric digital buying platforms  helped Asbury Automotive Group and Lithia & Driveway deliver record earnings and revenue in their respective first quarters of 2022.

In fact, Asbury’s 2021 dealership buying spree catapulted it past its previous five-year acquisition target in the first year of the plan. That led the Duluth, Ga., group to revise its previously announced revenue goal for 2025 to $32 billion up from the $20 billion it announced in 2020, said CEO David Hult.

Hult made his comments during Asbury’s conference call detailing its earnings for the quarter that ended March 31.

“The acquisitions we made in 2021 almost doubled our annual revenue,” said Hult, during the April 28 call. “Today Asbury Automotive is a much larger, more productive and financially sound company with more opportunities to drive top line growth.”

He said the company’s original plan was to grow revenues from $8 billion to $25 billion by 2025. “Because of the significant progress we made in 2021, on a proforma basis we are now just over $15 billion in revenue,” he added.

Among Asbury’s acquisitions was the Larry H. Miller Dealerships of Sandy, Utah, which was projected to add approximately $5.7 billion in annualized revenue. The deal included 54 new car dealerships, seven used car dealerships, 11 collision centers and an F&I product provider.

Monitoring M&A

Hult said Asbury’s revised revenue plan calls for the company to up its dealership count to “225-ish”  from the 148 it owned on April 28.

“We’ll continue to monitor the M&A market as we believe there are potential opportunities that would enhance our already strong dealership portfolio,” he added.

In the first quarter, Asbury’s revenue increased 78% year-over-year to $3.9 billion and its adjusted net income in the same time period rose 134% to $212.2 million.

The company’s revised 2025 revenue plan projects additional same-store growth of $2 billion; $7 billion from acquisitions and $3 billion in revenue from Clicklane, its 100% digital retail sales platform.

Hult said Clicklane sold over 5,600 new and used vehicles in the first quarter. Its customers are converting at nearly double the rate of traditional internet leads, and its average customer  credit score is over 700.

Clicklane’s incremental sales

“Ninety-two percent of Clicklane’s transactions in the quarter were to customers that were incremental to Asbury’s dealership network,” he added.

Asbury’s total gross profit in the quarter increased year-over-year 107% to $792.0 million. In the same time period, F&I gross profit grew 118% to $192.2 million and parts and service gross profit of $276.5 million represents a 70% increase.

When compared to the year-ago quarter, the company’s overall new unit sales grew 44% to 39,174 and average gross profit per new unit rose 106% to $5,718.

In the same period, the company’s used unit retail sales grew 63% to 38,306 and its average gross profit per used vehicle retailed grew 24% to $2,501.

On a same store basis, total revenue in the quarter grew 5% to $2.27 billion and total gross profit climbed 23% to $466.2 million.

Asbury’s same-store F&I gross profit of $109.9 million reflected a 26% increase and its parts and service gross profit increased 10% to $176.3 million.

Also on a same-store basis, Asbury’s new unit retail sales declined 20% to 21,651 and used unit retail sales rose 6% to 24,597.

Lithia & Driveway

Lithia of Medford, Ore., in 2020 announced its plan to generate $50 billion in revenue by 2025. Since then, it has acquired $11.5 billion in annualized revenues, representing 58% of the company’s initial goal, its CEO Bryan DeBoer, said during the company’s April 20 earnings call.

“Driven by contributions from acquired businesses,” Lithia’s total revenue in its first quarter that ended March 31, increased 54.4% to $6.7 billion  and its net income increased 120% to $343.6 million compared with its first quarter of 2021, said DeBoer.

“The acquisition climate remains robust and we continue to add to our pipeline, which sits now  at over $15 billion,” he said during the call.

Lithia’s no-negotiation, online sales platform, Driveway, grew its sales sequentially in the quarter, DeBoer said.

Driveway attracted 1 million monthly unique visitors in February and completed 3,100 transactions in March for an annual run rate of 37,000 transactions, he added.

Target: 40,000 transactions

In the quarter, Driveway opened in 17 new markets with targeted advertising that reaches 29% of the U.S. population and over 97% of its business was with consumers who had not transacted with the company within the past 15 years, DeBoer said.

He attributes Driveway’s “outperformance” in the quarter to increased efficiency in the company’s care centers, the fine-tuning of its finance algorithms and making new vehicles available on the platform.

“We are more confident than ever that we will exceed our 2022 target of 40,000 transactions that was established only two short quarters ago,” DeBoer added.

As of March 31, Lithia operated 281 locations representing 40 brands in 25 states and three Canadian provinces, according to documents it filed with the U.S. Securities and Exchange Commission.

The company’s total gross profits rose 78.6% in the quarter to $1.27 billion, when compared to the year-ago quarter. F&I gross profits grew 57.9% to $313.2 million and its service, parts and body shop business gross profits grew 50.8% to $329.0 million.

Lithia’s new unit retail sales increased 20.6% to 64,942 and its used unit retail sales rose 24.8% to 73,689.

Same-store results

On a same-store basis, Lithia’s total revenue increased 11.7% in the quarter to $4.58 billion, when compared to the same quarter last year.

Its total gross profit on a same store basis, increased 32.2% to $897.2 million. F&I gross profit grew 16.6% to $218.4 million and service, parts and body shop gross profit improved 14.2% to $238.6 million.

Also on a same store basis, Lithia’s new unit retail sales fell 17.4% to 42,232. Conversely, its average new vehicle selling price grew 17.9% to $47,885 and its gross profit per new vehicle retailed grew 121.1% to $6,453.

Its same store used unit retail sales dipped 0.9% to 54,813.  Its average used vehicle selling price grew 31.7% to $30,177 and its gross profit