Sonic Automotive Inc (SAH) Q3 2024 Earnings Call Highlights: Navigating Challenges with ...

GuruFocus News
3 min read

In This Article:

  • GAAP EPS: $2.13 per share.

  • Adjusted EPS: $1.26 per share, a 38% decrease year over year.

  • Tax Benefit: $31 million associated with an out-of-period adjustment.

  • Impact of CDK Outage: Estimated negative impact of $17.2 million on GAAP income before taxes.

  • New Vehicle GPU: $3,049 per unit, down $540 per unit from the second quarter.

  • Used GPU: $1,386 per unit on a same-store basis.

  • F&I GPU: $2,339, down 3% year over year.

  • Same-Store Fixed Ops Gross Profit: 8% increase in the third quarter.

  • EchoPark Revenue: $545 million, down 13% from the prior year.

  • EchoPark Gross Profit: $55 million, up 5% from the prior year.

  • EchoPark Segment Adjusted EBITDA: $8.9 million, an all-time record.

  • Powersports Revenue: $59.4 million.

  • Powersports Gross Profit: $17.7 million.

  • Powersports Segment Adjusted EBITDA: $5.8 million.

  • Available Liquidity: $834 million, excluding unencumbered real estate.

  • Cash and Floorplan Deposits: $418 million.

  • Quarterly Cash Dividend: Increased by 17% to $0.35 per share.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • EchoPark segment achieved all-time record quarterly gross profit, segment income, and adjusted EBITDA.

  • Sonic Automotive Inc (NYSE:SAH) reported a 17% increase in the quarterly cash dividend to $0.35 per share.

  • The company maintained a strong balance sheet with $834 million in available liquidity.

  • Parts and service operations saw an 8% increase in same-store fixed ops gross profit.

  • Sonic Automotive Inc (NYSE:SAH) successfully increased technician headcount, contributing to additional fixed ops gross profit.

Negative Points

  • Adjusted EPS decreased by 38% year over year, primarily due to normalization of new vehicle GPU and CDK outage effects.

  • The CDK outage negatively impacted third-quarter GAAP income before taxes by approximately $17.2 million.

  • New vehicle GPU declined due to larger headwinds from electric vehicle sales and stop-sale orders on high-margin models.

  • Elevated used retail prices remain a challenge for consumers, contributing to affordability concerns.

  • EchoPark segment retail unit sales volume decreased by 7% year over year.

Q & A Highlights

Q: What is the estimated impact of the CDK outage and BMW stop-sale on adjusted EPS? A: Heath Byrd, Chief Financial Officer, stated that the CDK impact is estimated at around $17 million, equating to a $0.33 impact on EPS. The BMW stop-sale impact is $2.6 million, or $0.05 of EPS, totaling a $0.38 impact.

Q: How did the recent storms affect Sonic Automotive's operations? A: Jeff Dyke, President, mentioned that the company was well-prepared for the storms, resulting in minimal impact. There was no inventory loss, and only minor damage occurred, such as an air-conditioning unit issue.

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