Sonic’s Q2 net income slips 17% on lower vehicle sales

Sonic Automotive Inc. described lower internet cash flow but larger profits for the 2nd quarter as new- and employed-motor vehicle volume at its franchised dealerships and its EchoPark employed-only stores dropped.

Sonic’s net profits tumbled 17 per cent to $94.8 million, whilst revenue amplified 9 % to $3.65 billion, an all-time record, the Charlotte, N.C., retailer reported Thursday.

Sonic also declared it was backing off particular ambitions for the EchoPark standalone utilised-car or truck unit and ending a strategic evaluate of the enterprise, with no motion taken.

“Irrespective of persistent industrywide headwinds that contributed to decrease new vehicle profits quantity as a result of ongoing supply chain disruptions and stock constraints, we ongoing to see powerful new auto pricing and buyer demand from customers through the next quarter,” Sonic CEO David Smith stated in a assertion.

Smith also said Sonic has “manufactured major progress” on the integration of RFJ Automobile Associates Holdings, a 33-retail outlet dealership group obtained in December. The RFJ offer added 22 franchised dealerships and 11 used-only retailers to Sonic. Smith said the acquisition is anticipated to consequence in “significant synergies in long term durations, more demonstrating the energy of the franchised dealership model and Sonic’s potential to reinvest in its business enterprise for extensive-time period growth and shareholder returns.”

Second-quarter income for the EchoPark unit rose 12 per cent to $665.6 million, a file. The utilised organization posted a pretax reduction of $34.9 million in the quarter.

Sonic expanded the manufacturer by opening an EchoPark shipping center in Columbus, Ga., and a retail hub in Raleigh, N.C., in April. In May well, Sonic opened an EchoPark retail hub in St. Louis. Sonic operates 50 EchoPark spots nationwide.

Sonic shares have been trading up 3.7 per cent late Thursday morning to $41.38.

2nd-quarter income: $3.65 billion, up 9 % from a calendar year earlier

2nd-quarter net cash flow: $94.8 million , down 17 %

Second-quarter auto product sales: Franchised dealerships bought 52,498 new and used retail vehicles, down 11 p.c. On a exact-shop basis, quantity of new and utilized retail cars at franchised shops dropped 25 per cent to 43,690 autos. EchoPark stores offered 16,608 made use of automobiles, down 22 p.c. EchoPark’s volume dropped 41 percent on a exact same-sector basis to 12,440 automobiles.

Information: All-time quarterly revenue, all-time quarterly gross financial gain, all-time quarterly overall finance and insurance policies gross profit for every retail auto and all-time quarterly EchoPark profits

Ranking: Sonic ranks No. 7 on Automotive News’ most current list of the leading 150 dealership teams primarily based in the U.S., with retail income of 103,486 new motor vehicles in 2021.

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