Despite a drop in used-vehicle sales at Sonic Automotive Inc.‘s growing EchoPark brand and declines in new- and used-vehicle sales on a same-store basis at its franchised dealerships, the retailer saw its net income increase slightly in the third quarter and double-digit revenue growth.
Sonic’s net income increased 3.3 percent to $87.3 million as revenue rose 12 percent to $3.4 billion, both of which were third-quarter records, the company noted.
Among its franchised dealerships, average gross profit per retail new vehicle surged 29 percent to $6,627. The average gross profit per used vehicle at its franchised dealerships, however, fell 11 percent to $1,704.
“During the third quarter, we continued to see persistent consumer demand for new vehicles and sustained growth in our parts and service business, driving all-time record fixed operations gross profit,” Sonic CEO David Smith said in a statement.
EchoPark’s third-quarter revenue fell 8.4 percent to $607.8 million. The used-vehicle unit posted a pretax loss of $29.9 million in the quarter, an improvement from a loss of $34.9 million in the second quarter.
Sonic expanded the EchoPark brand by opening a retail hub in Roseville, Calif., in September. In August, Sonic opened an EchoPark delivery center in Tulsa, Okla. The company operates 52 EchoPark locations nationwide. In the statement, Sonic President Jeff Dyke said EchoPark has reached half of the U.S. population and remains on track to reach 90 percent by 2025.
Sonic completed one acquisition in the third quarter with its August purchase of Audi Owings Mills in Maryland.
Shares of Sonic Automotive closed up 0.6 percent to $44.71 on Wednesday.
Q3 revenue: $3.4 billion, up 12 percent from a year earlier
Q3 net income: $87.3 million, up 3.3 percent from a year earlier
Q3 vehicle sales: Franchised dealerships sold 50,888 new and used retail vehicles, up 4.8 percent. On a same-store basis, volume of new and used retail vehicles at franchised stores fell 9.3 percent to 43,872 vehicles. EchoPark stores sold 15,422 used vehicles, a decline of 27 percent. EchoPark’s volume dropped 44 percent on a same-market basis to 11,809 vehicles.
Records: Third-quarter revenue, third-quarter net income and third-quarter finance and insurance gross profit per retail unit of $2,477
Ranking: Sonic ranks No. 7 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S., with retail sales of 103,486 new vehicles in 2021.
