Sonic Automotive Inc. said its new- and used-vehicle sales are improving in May and the company is expecting better results later in the year than previously forecast for used-vehicle volumes and parts and service gross profit.
The nation’s sixth-largest new-vehicle retailer said Tuesday that it continues to see improvement in business that took a hard hit in late March and early April because of the coronavirus pandemic. Sonic said new-vehicle sales are down less than 20 percent to date in May compared with the same period a year ago. Used-vehicle sales at franchised dealerships are down less than 15 percent and less than 10 percent at its standalone used-vehicle EchoPark stores.
Parts and service gross profit is down less than 30 percent month-to-date in May, Sonic said.
“Over the past few weeks, we have continued to see increasing consumer activity in the majority of our markets, as stay-at-home orders have been gradually relaxed,” Sonic CEO David Smith said in a statement. “Our new- and used-vehicle sales volume and fixed operations gross profit have performed at or above our expectations and continue to improve week by week.”
Shares of Sonic were down 4.5 percent to $22.93 in early trading Tuesday.
On April 29, Sonic’s guidance called for a return to pre-COVID-19 business levels by the summer. Sonic had said April new-vehicle sales tumbled about 40 percent, used-vehicle sales at franchised stores and EchoPark fell about 30 percent, while parts and service gross profit dropped about 40 percent.
The retailer said its April new-vehicle sales performed 17 percent better than forecast and it expects new-vehicle sales to return to normal levels in August. Used-vehicle sales at franchised stores performed at expected levels in April, and Sonic anticipates volume will return to pre-COVID-19 levels in July and perform above its original predictions for the rest of the year.
EchoPark sales in April were 23 percent higher than anticipated. The company expects to reach typical EchoPark volumes in July and sales to be higher than its initial forecast through December.
Parts and service gross profits in April were on target with the forecast, while Sonic expects parts and service gross profits to reach pre-COVID-19 levels by August or September. It expects performance to be above its initial thinking from August through the rest of the year.
The company said it will provide updated guidance the week of June 15.
Sonic, of Charlotte, N.C., ranks No. 6 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 114,131 new vehicles in 2019. It retailed 162,149 used vehicles for the same period, ranking it No. 6 on Automotive News‘ list of the top 100 dealership groups in used-vehicle sales.
