From a technical perspective, Sonic Automotive, Inc. (SAH) is looking like an interesting pick, as it just reached a key level of support. SAH's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involve ...

Company Overview - Sonic Automotive (SAH) is headquartered in Charlotte and operates in the Retail-Wholesale sector [3] - The stock has experienced a price change of 5.57% since the beginning of the year [3] Dividend Information - Sonic Automotive currently pays a dividend of $0.35 per share, resulting in a dividend yield of 2.09% [3] - This yield is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.23% and the S&P 500's yield of 1.57% [3] - The company's annualized dividend of $1.40 has increased by 12% from the previous year [4] - Over the last 5 years, Sonic Automotive has raised its dividend 4 times, averaging an annual increase of 35.72% [4] - The current payout ratio is 24%, indicating that the company pays out 24% of its trailing 12-month EPS as dividends [4] Earnings Growth - Earnings growth for Sonic Automotive appears strong, with the Zacks Consensus Estimate for 2025 at $6.43 per share, reflecting a 14.82% increase from the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - High-yielding stocks may face challenges during periods of rising interest rates, but Sonic Automotive presents a compelling investment opportunity as a strong dividend play [7] - The stock currently holds a Zacks Rank of 3 (Hold) [7]

Company Overview - Sonic Automotive (SAH) is headquartered in Charlotte and operates in the Retail-Wholesale sector, with a year-to-date price change of -0.96% [3] - The company currently pays a dividend of $0.35 per share, resulting in a dividend yield of 2.23%, which is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.24% and the S&P 500's yield of 1.59% [3] Dividend Performance - Sonic Automotive's annualized dividend of $1.40 has increased by 12% from the previous year [4] - Over the past five years, the company has raised its dividend four times, achieving an average annual increase of 35.72% [4] - The current payout ratio stands at 24%, indicating that the company distributes 24% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Sonic Automotive's earnings in 2025 is projected at $6.28 per share, reflecting a year-over-year earnings growth rate of 12.14% [5] Investment Considerations - Sonic Automotive is considered a compelling investment opportunity due to its strong dividend profile and solid earnings growth potential [7] - The stock is currently rated with a Zacks Rank of 3 (Hold), indicating a neutral outlook [7]

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [6] - Consolidated total revenues reached a record of $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [7][8] - Same-store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [9] Business Line Data and Key Metrics Changes - Franchised dealership segment generated record franchise revenues of $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [7][8] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year; EchoPark revenues were $560 million, flat year over year [11] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and a segment adjusted EBITDA loss of $700,000 [14] Market Data and Key Metrics Changes - Same-store used vehicle volume decreased 2% year over year, driven by lower levels of late-model used vehicles and consumer affordability challenges [9] - EchoPark segment retail unit sales volume for the quarter was 18,800 units, up 5% year over year [12] Company Strategy and Development Direction - The company is focused on adapting to ongoing changes in the automotive retail environment and macroeconomic backdrop while making strategic decisions to maximize long-term returns [16] - The EchoPark business model is being strategically adjusted to position for disciplined long-term growth as used vehicle market conditions improve [13] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current tariff environment, indicating that the industry is resilient and can adapt to challenges [25][26] - The company is maintaining a disciplined balance sheet approach with $947 million in available liquidity, allowing for strategic capital deployment as market conditions evolve [15] Other Important Information - The Board of Directors approved a quarterly cash dividend of $0.35 per share, payable on July 15, 2025 [15] - The company has updated or withdrawn certain items in its previous financial guidance for 2025 due to uncertainties around tariffs [16] Q&A Session Summary Question: Impact of tariffs on factory partners and pricing - Management indicated that conversations with manufacturers suggest a potential stabilization in the next 90 days, with no significant price increases expected [25][26] Question: Update on fixed operations headcount - The company has hired 345 additional technicians, which has positively impacted fixed operations performance [33][34] Question: Used vehicle GPU trajectory - Management noted that margins seen in Q1 should hold throughout the year, with EchoPark's margins expected to improve due to a higher percentage of cars being sourced from the street [54][55] Question: Warranty work versus customer pay - Warranty work grew by 40% in Q1, while customer pay grew by only 2-3%, prompting management to adjust their focus to balance the mix better [67][68] Question: EchoPark's full-year guidance - Management explained that the conservative guidance is due to the uncertainty surrounding tariffs and their potential impact on used car pricing [112][113]

SONIC AUTOMOTIVE Investor Presentation | First Quarter 2025 Updated April 24, 2025 Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as "may," "wi ...

Sales Performance - The U.S. retail automotive industry's total new vehicle seasonally adjusted annual rate of unit sales volume increased by 8% to approximately 16.6 million vehicles for the three months ended March 31, 2025, compared to approximately 15.4 million vehicles for the same period in 2024[94]. - Same store retail new vehicle revenue increased by 13% during the three months ended March 31, 2025, driven by a 10% increase in retail new vehicle unit sales volume and a 2% increase in average selling price[97]. - Retail new vehicle unit sales increased by 11% to 29,075 units, while total new vehicle unit sales also rose by 11% to 29,458 units[120]. - Total combined retail new and used vehicle unit sales increased by 5% to 73,892 units in Q1 2025, up from 70,198 units in Q1 2024[130]. - Retail used vehicle revenue increased by 1% to $1,225.0 million, with unit sales rising by 2% to 44,817 units[122]. - Retail used vehicle unit sales decreased by 2% to 25,019, while acquisitions and other factors contributed an additional 422 unit sales[137]. Revenue Growth - Same store retail used vehicle revenue increased by 1% during the three months ended March 31, 2025, driven by a 3% increase in average selling prices, despite a 2% decrease in sales volume[98]. - Same store Fixed Operations revenue increased by 5% during the three months ended March 31, 2025, primarily due to increased service capacity and higher parts and labor costs[99]. - Retail new vehicle revenue increased by 14% to $1,656.3 million, while fleet new vehicle revenue rose by 13% to $22.1 million, resulting in total new vehicle revenue of $1,678.4 million, a 14% increase[120]. - Total revenue for Fixed Operations increased by 6% to $474.4 million in Q1 2025, up from $446.7 million in Q1 2024[127]. - Total revenue for the Franchised Dealerships Segment increased by approximately $27.5 million, or 6%, reaching $467.4 million for the three months ended March 31, 2025, compared to $439.9 million in 2024[142]. Profitability Metrics - Retail new vehicle gross profit per unit decreased by $643, or 17%, to $3,089 per unit during the three months ended March 31, 2025, primarily due to increased price competition[97]. - Total gross profit per new retail unit decreased by 17% to $3,075, while total gross profit per new unit decreased by 17% to $3,054[120]. - Fixed Operations gross margin increased by 220 basis points to 49% during the three months ended March 31, 2025, driven by an increase in warranty revenue contribution[109]. - Total gross profit for Fixed Operations increased by 7% to $240.6 million in Q1 2025, compared to $223.9 million in Q1 2024[127]. - Gross profit as a percentage of total revenue improved to 50.7% in Q1 2025, compared to 50.1% in Q1 2024[127]. Financial Position - Total available liquidity resources as of March 31, 2025, were $946.9 million, up from $861.6 million as of December 31, 2024[190]. - Net cash provided by operating activities was approximately $195.8 million for the three months ended March 31, 2025, compared to $70.1 million for the same period in 2024[200]. - Net cash used in investing activities was approximately $35.5 million for the three months ended March 31, 2025, down from $39.4 million in the same period in 2024[204]. - The total net outstanding balance of variable rate debt was $1.9 billion as of March 31, 2025[217]. - A cash dividend of $0.35 per share was approved for all outstanding shares of Class A and Class B Common Stock, with a total of approximately $338.8 million of net income and retained earnings free of restrictions as of March 31, 2025[199]. Operational Efficiency - The company aims to optimize service capacity and customer retention to increase Fixed Operations revenues over the long term[126]. - Same store wholesale vehicle revenue increased by 12% to $54.0 million, but gross profit worsened by 400% to $(1.0) million[140]. - Fixed Operations same store gross profit increased by 7% to $234.3 million, reflecting improved operational efficiency[141]. - Warranty revenue saw a significant increase of 34%, rising to $86.4 million from $64.5 million year-over-year[127]. - The gross profit margin for warranty services improved by 290 basis points to 62.5%[142]. Market Conditions - The company anticipates continued volatility in wholesale vehicle pricing and related gross profit, expecting a return to long-term normalized levels[123]. - The first quarter historically contributes less operating profit than the second and third quarters, with the fourth quarter typically contributing the highest operating profit[209]. - The U.S. retail new vehicle SAAR increased by 11% to 14.0 million vehicles, while the total new vehicle SAAR increased by 8% to 16.6 million vehicles[119]. Expenses and Costs - Total SG&A expenses for the three months ended March 31, 2025, were $380.3 million, a decrease of 3% from $392.2 million in the same period of 2024[177]. - Compensation expenses increased to $258.5 million, up 5% from $247.3 million, while advertising expenses rose to $23.8 million, a 7% increase from $22.3 million[177]. - Other SG&A expenses decreased by 23% to $87.8 million from $113.3 million, primarily due to a $30.0 million benefit from cyber insurance proceeds[179]. - Depreciation and amortization expenses increased by approximately $3.4 million, or 9%, during the three months ended March 31, 2025[182]. - Interest expense for new vehicle floor plans increased by $0.6 million, while the average interest rate applied decreased, offsetting $3.4 million of the net increase[184].

Core Insights - Sonic Automotive reported revenue of $3.65 billion for the quarter ended March 2025, reflecting a year-over-year increase of 7.9% and surpassing the Zacks Consensus Estimate of $3.54 billion by 3.18% [1] - The company's EPS for the quarter was $1.48, an increase from $1.36 in the same quarter last year, also exceeding the consensus estimate of $1.46 by 1.37% [1] Financial Performance Metrics - The total combined retail new and used vehicle unit sales reported were 53,523, slightly below the average estimate of 53,850 [4] - Used vehicle unit sales were reported at 25,441, which was lower than the estimated 26,604 [4] - Retail new vehicle sales in the Powersports segment were 850, compared to the average estimate of 1,017 [4] - EchoPark segment reported used vehicle unit sales of 18,798, slightly above the average estimate of 18,487 [4] Revenue Breakdown - Total vehicle revenues reached $2.99 billion, exceeding the average estimate of $2.83 billion, marking a year-over-year increase of 7.9% [4] - Revenues from used vehicles were reported at $1.23 billion, matching the average estimate [4] - New vehicle revenues were $1.68 billion, surpassing the average estimate of $1.52 billion [4] - Finance, insurance, and other net revenues were $190.80 million, exceeding the average estimate of $182.19 million [4] - Parts, service, and collision repair revenues were $474.40 million, slightly below the average estimate of $480.08 million [4] - Powersports revenues were reported at $34.40 million, above the average estimate of $32.08 million, representing a year-over-year increase of 24.2% [4] - New vehicle fleet revenues were $22.10 million, exceeding the average estimate of $16.47 million, with a year-over-year increase of 12.8% [4] Stock Performance - Sonic Automotive's shares have returned -4.5% over the past month, compared to the Zacks S&P 500 composite's -5.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [5] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [6][11] Business Segment Data and Key Metrics Changes - Franchised dealership segment revenues reached $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [6] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year [8] - EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% to $64 million [9] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and an adjusted EBITDA loss of $700,000 [10] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [7] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [7] - Parts and service gross profit increased by 7% in the first quarter [8] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [5] - A data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize market volatility disruptions [10] - The company plans to adapt to ongoing changes in the automotive retail environment while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and believes that the automotive industry can handle price adjustments without significant concerns [17][20] - The company is focused on executing its operational playbooks and processes, expecting solid results in the upcoming quarters [18][19] - Management acknowledged the need to balance warranty and customer pay work in service operations to improve revenue mix [50][51] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [11] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [11] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the tariff impacts, but they expect things to stabilize in the next 90 days [17] - The company is not concerned about significant price increases and believes they can navigate through the situation [19] Question: Update on fixed operations hiring - Management reported hiring 345 additional technicians, which has positively impacted fixed operations [23][24] - There is ongoing focus on increasing technician headcount to meet service demand [26] Question: Used vehicle GPU trajectory - Management stated that GPU margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [38][39] Question: Warranty work versus customer pay - Warranty work grew by 40% in the first quarter, while customer pay grew by only 2-3%, indicating a need to adjust the revenue mix [47][50] Question: EchoPark's full-year guidance - Management explained that guidance was conservative due to potential tariff impacts, but they are prepared to adjust as conditions evolve [77][78] Question: SG&A expenses - Management noted that first-quarter SG&A expenses were influenced by one-time compensation costs, but overall expenses are in line with expectations [82][84]

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [6] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [7][12] Business Line Data and Key Metrics Changes - Franchised dealership segment generated record revenues of $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [7] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year; EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% [9][10] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and a segment adjusted EBITDA loss of $700,000 [11] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter due to luxury brand mix [8] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [8] - EchoPark segment total gross profit per unit was a record $3,411, up $456 per unit year over year [10] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [6] - The data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize disruptions from market volatility [10] - The company plans to adapt to ongoing changes in the automotive retail environment and macroeconomic backdrop while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current tariff environment, stating that they expect things to settle down in the next 90 days [18] - The company is focused on executing its playbooks and processes, believing that they can handle the challenges posed by tariffs [19] - Management noted that they are well-positioned to resume disciplined long-term growth for EchoPark once used vehicle market conditions improve [10] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [12] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [12] - The company updated or withdrew certain items in its previous financial guidance for 2025 due to uncertainty around the effects of tariffs on the automotive industry [12] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the impact of tariffs, but they expect to navigate the situation effectively [18][19] Question: Update on fixed operations hiring - Management confirmed the hiring of 345 technicians, which has positively impacted fixed operations, and they plan to continue hiring [24][26] Question: Used vehicle GPU trajectory - Management stated that margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [39][40] Question: Warranty work metrics - Warranty work grew by 40% in the first quarter, while customer pay growth was only 2-3%, indicating a need to balance the mix better [48][49] Question: EchoPark's guidance and tariff impact - Management explained that they are being conservative with guidance due to potential tariff impacts, but they are optimistic about future performance [72][80] Question: SG&A expenses - Management noted that first quarter SG&A expenses were in line with expectations, with no systematic changes driving them higher [84][86] Question: EchoPark's inventory management - Management expressed confidence in their ability to manage inventory effectively and adapt to market conditions, including potential tariff impacts [92][94]

Core Insights - Sonic Automotive reported quarterly earnings of $1.48 per share, exceeding the Zacks Consensus Estimate of $1.46 per share, and showing an increase from $1.36 per share a year ago, representing an earnings surprise of 1.37% [1] - The company achieved revenues of $3.65 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.18% and increasing from $3.38 billion year-over-year [2] - Sonic Automotive has outperformed the market with a year-to-date decline of 6.8%, compared to the S&P 500's decline of 8.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.56 on revenues of $3.64 billion, and for the current fiscal year, it is $6.27 on revenues of $14.53 billion [7] - The estimate revisions trend for Sonic Automotive is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Automotive - Retail and Whole Sales industry is currently in the top 19% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Asbury Automotive Group, a competitor in the same industry, is expected to report quarterly earnings of $6.84 per share, reflecting a year-over-year decline of 5.1%, with revenues projected at $4.4 billion, up 4.8% from the previous year [9][10]