Transportation services provider launches cash register campaign benefiting Children's Miracle Network Hospitals and gifts a passenger van to National Pediatric Cancer FoundationFORT LAUDERDALE, Fla., June 12, 2025 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), a provider of personalized transportation services and an ardent supporter of cancer-related causes, today announced a new and impactful Drive Pink (DRV PNK) campaign focused on pediatric patients. In partnerships with Children's Miracle Network Hospit ...

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Company Overview - AutoNation, Inc. is one of the largest automotive retailers in the United States, offering new and used vehicles, maintenance and repair services, vehicle parts, extended service contracts, and financing options through third-party sources [12]. Investment Ratings - AutoNation has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [12]. - The company also has a Value Style Score of A, supported by attractive valuation metrics such as a forward P/E ratio of 9.95, which is appealing to value investors [13]. Earnings Estimates - In the last 60 days, five analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.43 to $18.67 per share [13]. - AutoNation has an average earnings surprise of 1.6%, suggesting a positive outlook for its earnings performance [13]. Investment Considerations - With a strong Zacks Rank and top-tier Value and VGM Style Scores, AutoNation is recommended for investors' consideration [13].

Core Viewpoint - AutoNation, Inc. successfully completed its first asset-backed securitization, raising $700 million for its automobile loan portfolio at a competitive fixed interest rate of 4.90% [1][2]. Group 1: Financial Performance - The asset-backed securitization achieved a final interest rate lower than the cost of the debt it will replace, indicating effective financial management [2]. - An initial advance rate of 98% was accomplished, showcasing strong demand for the offering [2]. - The size of the offering was increased by $200 million, providing additional capital to support the company's capital allocation priorities [2]. Group 2: Company Overview - AutoNation is one of the largest automotive retailers in the United States, offering a wide range of new and used vehicles, customer financing, parts, and maintenance services [3]. - The company has a nationwide network of dealerships and is recognized for its brand strength [3]. - AutoNation has raised over $40 million for cancer-related causes, reflecting its commitment to community engagement and social responsibility [3].

Company Overview - AutoNation, Inc. is one of the largest automotive retailers in the United States, involved in retailing new and used vehicles, offering vehicle maintenance and repair services, vehicle parts, extended service contracts, and vehicle protection products [11] - The company also arranges financing for vehicle purchases through third-party sources [11] Investment Ratings - AutoNation holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating a solid position in the market [11] - The company has a Value Style Score of A, supported by attractive valuation metrics such as a forward P/E ratio of 10.03, which is appealing to value investors [12] Earnings Estimates - In the last 60 days, five analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.43 to $18.67 per share [12] - AutoNation has an average earnings surprise of 1.6%, suggesting a positive trend in earnings performance [12] Investment Considerations - With a solid Zacks Rank and top-tier Value and VGM Style Scores, AutoNation is recommended for investors' consideration [12]

Core Insights - AutoNation, Inc. reported first-quarter 2025 adjusted earnings of $4.68 per share, a 4% increase year over year, surpassing the Zacks Consensus Estimate of $4.35, driven by strong revenues and profits from retail new and used vehicles [1] - Total revenues for the quarter reached $6.69 billion, exceeding the Zacks Consensus Estimate of $6.57 billion and up from $6.48 billion in the first quarter of 2024 [1] Revenue Breakdown - New vehicle revenues increased by 9% year over year to $3.24 billion, exceeding the estimate of $2.83 billion, with retail units sold totaling 62,387, a 6% increase from the previous year [2] - Average selling price (ASP) for new vehicles rose by 2.9% year over year to $52,064, surpassing the estimate of $47,541 [2] - Gross profit from new vehicles was $175 million, a decline of 10.7% year over year, but above the estimate of $112.5 million [2] Used Vehicle Performance - Retail used-vehicle revenues decreased by 2.3% year over year to $1.79 billion, but exceeded the projection of $1.77 billion due to higher ASP [3] - Used vehicle retail units sold were 68,000, down 1.6% year over year, missing the projection of 69,429 units [3] - ASP for used vehicles was $26,354, down 0.7% year over year, but above the estimate of $25,562 [3] - Gross profit from used vehicles increased by 11% to $113 million, surpassing the estimate of $86.3 million [3] Wholesale and Other Segments - Revenues from wholesale used vehicles fell by 19.7% to $130.3 million, missing the estimate of $165.7 million, while gross profit rose to $11.5 million from $9.7 million, exceeding the estimate of $6.2 million [4] - Finance and insurance business net revenues were $352.5 million, a 5.3% increase year over year, beating the projection of $332.2 million [4] - Parts and service revenues contracted by 0.7% to $1.16 billion, missing the estimate of $1.3 billion, while gross profit rose by 2.1% to $567.7 million, below the estimate of $618 million [5] Segmental Performance - Domestic segment revenues declined by 2.2% year over year to $1.71 billion, exceeding the projection of $1.7 billion, with segment income down 8.2% to $69 million, but above the estimate of $60 million [5] - Import segment revenues increased by 3.4% to $2 billion, surpassing the forecast of $1.95 billion, with income contracting by 2% to $126 million, exceeding the estimate of $113 million [6] - Premium Luxury segment sales rose by 6.7% to $2.57 billion, surpassing the projection of $2.44 billion, with segment income increasing by 4.1% to $178.7 million, exceeding the estimate of $160 million [6] Financial Position - As of March 31, 2025, the company's liquidity stood at $1.6 billion, including $71 million in cash and nearly $1 billion available under its revolving credit facility [7] - Inventory was valued at $3.23 billion, and non-vehicle debt was $3.96 billion [7] - Capital expenditure for the quarter was $75.2 million [7] Share Repurchase Activity - During the first quarter of 2025, AutoNation repurchased 1.4 million shares for $225 million, with a total of 1.5 million shares repurchased for $254 million since the beginning of the year [8] - The company currently has $607 million remaining under its share repurchase program [8]

Company Overview - AutoNation, Inc. (NYSE: AN) is a retailer of both new and used cars in the United States, offering a diverse range of car brands, prominently including Toyota [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1]

Group 1 - The company AutoNation (NYSE: AN) is viewed positively, with a focus on its revenue generation from vehicle sales and related parts [1] - The automotive retail sector is highlighted as a potential area for investment, particularly in the context of market trends and consumer demand [1] Group 2 - Crude Value Insights provides an investment service centered on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers benefit from a comprehensive stock model account and detailed cash flow analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - The total revenue for the first quarter was $6.7 billion, an increase of 3% year over year, and 4% on a same-store basis [16] - Adjusted EPS grew by 4% from the previous year to $4.68, marking the first year-over-year increase in eight quarters [10][20] - Total gross profit, including wholesale, increased by 12% from the first quarter of 2024 [8] Business Line Data and Key Metrics Changes - New vehicle unit sales increased by 7% year over year on a same-store basis, with premium luxury units up 14%, domestic units up 6%, and import units up 2% [7][20] - Used vehicle unit profitability rose by 13% to $16.62, reflecting a focus on margin and inventory management [7][22] - Customer financial services (CFS) profitability per unit increased by 3% year over year, with a finance penetration rate above 70% [24][25] Market Data and Key Metrics Changes - Same-store gross profit for used vehicles grew by 12%, while aftersales gross profit increased by 4% year over year [17][28] - The light vehicle market is projected to see a decline from over 17 million units to between 31 million units for the year, with expectations of cross-shopping mitigating some declines [14] Company Strategy and Development Direction - The company aims to increase store density in existing markets, as evidenced by the acquisition of two stores in Colorado [11][31] - Focus on controlling costs, cash flow, and capital deployment to enhance shareholder returns [15][35] - Continued emphasis on technician workforce development and internal promotions to improve service efficiency [28] Management's Comments on Operating Environment and Future Outlook - Management noted that the impact of tariffs will vary across OEMs and models, with expectations of competitive pricing strategies to maintain market share [53][56] - The company anticipates that the momentum seen in vehicle sales will continue, albeit at a moderating pace [12][34] - Management expressed confidence in the ability to generate cash flow and navigate the evolving market landscape [100] Other Important Information - The company repurchased $225 million of shares at an average price of $165 per share during the quarter, reducing the share count by 4% [10][32] - Adjusted free cash flow for the quarter totaled $237 million, with a cash flow conversion rate of 129% of adjusted net income [29] Q&A Session Summary Question: Impact of AutoNation Finance on PVR - Management acknowledged that the ramp-up of AutoNation Finance had a short-term impact on CFS PVR, estimating it at around $150 for the quarter [40][42] Question: Future Demand and Payback Period - Management indicated that while there may be some pull-forward demand, they do not expect a significant payback in the latter half of the year due to pent-up demand [46][48] Question: OEM Pricing Strategies - Management stated that OEMs will likely absorb some inflation and that the last lever pulled will be net transaction price appreciation [54][96] Question: After Sales Growth Contribution - Management confirmed that aftersales growth was driven by both price and volume increases, with mobile service initiatives contributing at a gross level [104] Question: Used Vehicle Supply and Demand - Management noted strong demand for lower-priced vehicles and emphasized efforts to increase used vehicle inventory [88][90]

Financial Performance - For the three months ended March 31, 2025, net income was $175.5 million, with diluted earnings per share of $4.45, compared to net income of $190.1 million and diluted earnings per share of $4.49 in the same period of 2024[121]. - Total revenue for the three months ended March 31, 2025, was $6,690.4 million, representing a 3.2% increase from $6,485.7 million in 2024[137]. - Operating income for the period was $336.0 million, a slight decrease of 1.3% from $340.3 million in 2024[137]. - Total gross profit for the three months ended March 31, 2025, was $1,219.9 million, up 1.8% from $1,197.9 million in 2024[137]. - The company reported net cash used in operating activities of $52.6 million for the three months ended March 31, 2025, compared to net cash provided of $294.5 million for the same period in 2024[213]. Revenue Breakdown - New vehicle sales accounted for 49% of total revenue and 14% of total gross profit, while used vehicle sales accounted for 29% of total revenue and 10% of total gross profit[117]. - New vehicle revenue increased by 9.0% to $3,248.1 million in 2025 from $2,979.3 million in 2024[137]. - Retail used vehicle revenue decreased by 2.3% to $1,792.1 million in 2025 from $1,833.8 million in 2024[137]. - Total revenue for used vehicles decreased to $1,922.4 million, a decline of 3.7% from $1,996.1 million in Q1 2024[152]. - Same store retail used vehicle revenue decreased by 2.1% to $1,766.5 million, attributed to a decrease in unit volume[153]. Sales and Inventory - U.S. industry retail new vehicle unit sales increased approximately 8% in Q1 2025 compared to Q1 2024, driven by higher manufacturer vehicle production and increased consumer demand[118]. - Retail vehicle unit sales for new vehicles increased by 6.0% to 62,387 units in 2025 from 58,863 units in 2024[137]. - New vehicle inventory units were 39,300 as of March 31, 2025, compared to 38,200 in the previous year, with cumulative write-downs of $1.3 million[125]. - Inventory days supply for new vehicles improved to 38 days in 2025 from 44 days in 2024, while used vehicles increased to 36 days from 31 days[138]. Segment Performance - Domestic segment revenue decreased by 2.2% to $1,717.4 million, primarily due to a decline in used vehicle revenue, which was impacted by lower unit volume and average selling prices[165]. - Import segment revenue increased by 3.4% to $2,047.3 million, driven by a 5.5% increase in new vehicle revenue, largely due to higher average selling prices[168]. - Premium Luxury segment revenue rose by 6.7% to $2,576.5 million, with new vehicle revenue increasing by 14.5% to $1,325.9 million[170]. - Premium Luxury segment income increased by 4.1% to $178.7 million, supported by higher gross profit across new vehicles and finance and insurance[170]. Expenses and Costs - SG&A expenses increased to $821.9 million in Q1 2025 from $793.1 million in Q1 2024, with SG&A as a percentage of total gross profit rising to 67.4% from 66.2%[179]. - Floorplan interest expense decreased to $46.5 million in Q1 2025 from $49.4 million in Q1 2024, primarily due to lower average interest rates[182]. - Other interest expense decreased to $42.3 million in Q1 2025 from $44.6 million in Q1 2024, driven by lower average debt balances[184]. Investments and Acquisitions - The company made cash payments of $69.6 million for business acquisitions during the three months ended March 31, 2025, having purchased one Domestic store and one Import store[199]. - The company is investing significantly in strategic initiatives, including the expansion of AutoNation Finance and AutoNation USA used vehicle stores[224]. Financial Position - As of March 31, 2025, the company's long-term debt, net of current maturities, was $3,104.5 million, an increase from $2,613 million as of December 31, 2024[203]. - The company had a leverage ratio of 2.56x and an interest coverage ratio of 4.33x as of March 31, 2025, both of which were in compliance with the covenants under its credit agreement[209]. - Cash and cash equivalents increased to $70.5 million as of March 31, 2025, compared to $59.8 million at December 31, 2024[189]. Market Conditions and Risks - Tariffs announced by the U.S. government in Q1 2025 could increase costs or consumer prices and limit inventory availability, potentially impacting business operations[120]. - The automotive retail industry is sensitive to economic conditions, including unemployment levels and consumer confidence, which could affect the company's performance[224]. - The company is subject to various risks associated with originating and servicing auto finance loans, which could adversely affect its business[224]. - The company’s operations are subject to extensive governmental laws and regulations, which could impact its business and financial results[224].