Sonic Automotive (SAH) Tops Q4 EPS by 9c, Revenues Beat

Sonic Automotive (NYSE: SAH) reported Q4 EPS of $0.97, $0.09 better than the analyst estimate of $0.88. Revenue for the quarter came in at $2.75 billion versus the consensus estimate of $2.74 billion.

Fourth Quarter Highlights

• All-time record quarterly earnings per diluted share from continuing operations of $1.04 for the fourth quarter of 2019, up 104% compared to the fourth quarter of 2018
• All-time record quarterly consolidated total revenues of $2.7 billion and gross profit of $393.9 million for the fourth quarter of 2019, compared to $2.6 billion and $370.7 million, respectively, for the fourth quarter of 2018
• EchoPark revenues of $308.6 million, up 52% from the fourth quarter of 2018, EchoPark retail volume of 12,676 units, up 45% from the fourth quarter of 2018
• EchoPark segment income of $2.1 million, up 145% compared to the fourth quarter of 2018
• Same Store Franchised Dealerships Segment operating results:
  • Revenues up 8.5%, gross profit up 9.4% compared to the fourth quarter of 2018
  • New vehicle unit volume up 7.5%; new vehicle gross profit per unit up 1.4%, to $2,213 per unit
  • Retail used vehicle unit volume up 9.7%; retail used vehicle gross profit per unit up 2.6%, to $1,269 per unit
  • Parts, service and collision repair gross profit up 6.2%, Customer Pay gross profit up 10.2% compared to the fourth quarter of 2018
  • Finance and insurance (“F&I”) gross profit up 13.7% compared to the fourth quarter of 2018 (all-time record quarterly F&I gross profit per retail unit of $1,809 on a total Sonic consolidated basis)

David Smith, Sonic’s and EchoPark's Chief Executive Officer, commented, “Our 2019 performance was exceptional, with record-breaking consolidated total revenues and earnings per diluted share from continuing operations. This was led by tremendous year-over-year annual revenue growth of 66% at EchoPark, our specialty pre-owned vehicle stores, as well as strong performance from our franchised dealerships.”

Mr. Smith continued, “During the fourth quarter, EchoPark opened its Long Beach, California store, our ninth location nationwide and our first in California. Upon opening, this location proceeded to sell over 450 vehicles within the first 45 days of operation. This is an excellent start and it speaks to the strength of our unique business model and the industry-leading guest experience our EchoPark stores provide. EchoPark experienced strong growth in 2019, and we believe it is poised for further growth in 2020 as we capitalize on opportunities to expand EchoPark’s reach into new markets, which we expect to include three new stores by the end of 2020. Taking into consideration EchoPark’s growth trajectory and the continued strength of our franchised dealerships, 2020 marks the beginning of our march towards our long-term goal of achieving $20 billion in total annual revenues this decade.”

Jeff Dyke, Sonic's and EchoPark's President, commented, “In 2019, we continued improving our operational performance, driving increased gross profit to our bottom line. As a result, we achieved record net income from continuing operations of $3.31 per diluted share for the year. At the same time, we moved forward with our deleveraging initiatives, resulting in a total debt reduction of $238 million. With the progress we have made, we are well on our way to reaching our stated goal of reducing debt by $300 million by mid-to-late 2020. With our strong 2019 results and improved balance sheet, we are well positioned to execute on our growth plans for our increasingly profitable EchoPark business, even as we continue to strategically grow our core franchised business.”

For earnings history and earnings-related data on Sonic Automotive (SAH) click here.

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