Financial Performance - First quarter total revenues reached $3.7 billion, an increase of 8% year-over-year; total gross profit was $566.4 million, up 6% year-over-year[2] - Reported net income for the first quarter was $70.6 million, a 68% increase year-over-year, translating to $2.04 earnings per diluted share, up 70% year-over-year[2] - Total revenues for the three months ended March 31, 2025, increased by 8% to $3,651.3 million compared to $3,384.0 million in 2024[18] - Net income for the same period rose by 68% to $70.6 million, up from $42.0 million in 2024[18] - Operating income improved by 36% to $145.0 million, compared to $106.7 million in the prior year[18] - Reported net income for Q1 2025 was $70.6 million, compared to $42.0 million in Q1 2024, representing a 68.1% increase[33] - Adjusted net income for Q1 2025 was $51.3 million, up from $47.5 million in Q1 2024, reflecting a 6.4% increase[33] Segment Performance - EchoPark Segment revenues were $559.7 million, flat year-over-year, with an all-time record quarterly gross profit of $63.9 million, up 21% year-over-year[2] - EchoPark Segment reported income was $10.3 million, compared to a segment loss of $2.9 million in the prior year, marking a 455% improvement year-over-year[2] - Adjusted EBITDA for the EchoPark Segment reached an all-time record of $15.8 million, up 116% year-over-year from $7.3 million[2] - The Franchised Dealerships Segment reported total revenues of $3,057.2 million, a 9% increase from $2,796.9 million in 2024[19] - The EchoPark Segment achieved total revenues of $559.7 million, slightly up from $559.4 million in 2024[22] - Powersports Segment achieved first quarter record revenues of $34.4 million, a 24% increase year-over-year, although it reported a segment loss of $3.5 million, a 52% increase from the prior year[11] Cash and Liquidity - As of March 31, 2025, the company had approximately $430 million in cash and floor plan deposits, with total liquidity of approximately $947 million[3] - The Board of Directors approved a quarterly cash dividend of $0.35 per share, payable on July 15, 2025[5] - The company declared dividends of $0.35 per common share, representing a 17% increase from $0.30 in the previous year[18] Sales and Profitability - Retail new vehicle revenues grew by 14% to $1,656.3 million, while total new vehicle revenues also increased by 14% to $1,678.4 million[18] - The unit sales volume for retail new vehicles in the Franchised Dealerships Segment increased by 11% to 28,082 units[19] - Gross profit per unit for retail new vehicles decreased by 17% to $3,089 compared to $3,722 in 2024[21] - EchoPark segment used vehicle unit sales rose by 7% to 18,798 units in Q1 2025 compared to 17,618 units in Q1 2024[23] - Powersports segment retail new vehicle unit sales increased by 18% to 993 units in Q1 2025 from 845 units in Q1 2024[24] Expenses and Adjustments - Total adjusted SG&A expenses decreased by 6% to $408.4 million in Q1 2025 from $385.8 million in Q1 2024[26] - Total SG&A expenses for the Franchised Dealerships Segment decreased by 4% to $325.9 million in Q1 2025 from $338.5 million in Q1 2024[27] - Total SG&A expenses for the EchoPark Segment increased by 2% to $44.8 million in Q1 2024 from $45.6 million in Q1 2023[28] - Total SG&A expenses for the Powersports Segment increased by 19% to $9.6 million in Q1 2025 from $8.1 million in Q1 2024[29] - Total pre-tax adjustments for Q1 2025 amounted to $(26.7) million, compared to $7.4 million in Q1 2024[33] - The company incurred a cyber insurance payment adjustment of $(30.0) million in Q1 2025[33] - The tax effect of adjustments in Q1 2025 was $7.4 million, compared to $(1.9) million in Q1 2024[33]

Core Viewpoint - Sonic Automotive's shares experienced a significant increase of 10% to close at $62.17, following a broader market rebound and a 90-day pause in tariffs by Trump, despite a prior 13.5% loss over the last four weeks [1][2]. Company Summary - Sonic Automotive is projected to report quarterly earnings of $1.35 per share, reflecting a year-over-year decrease of 0.7%, with expected revenues of $3.47 billion, an increase of 2.6% from the previous year [2]. - The consensus EPS estimate for Sonic Automotive has remained unchanged over the last 30 days, indicating a lack of upward revisions in earnings estimates, which typically correlates with stock price movements [4]. - Sonic Automotive holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [4]. Industry Summary - Sonic Automotive is part of the Zacks Automotive - Retail and Wholesale industry, which includes AutoNation, another company in the sector that saw an 11.3% increase in its stock price, closing at $173.31, despite a -5.6% return over the past month [4]. - AutoNation's consensus EPS estimate has also remained unchanged at $4.21, representing a year-over-year decline of 6.2%, and it similarly holds a Zacks Rank of 3 (Hold) [5].

Business Operations - The company operates 18 EchoPark stores across 10 states, aiming to enhance its distribution network to reach 90% of the U.S. population at maturity[25]. - The company focuses on providing a high-quality guest experience, with customer satisfaction metrics influencing dealership incentives and management compensation[27]. - The company has developed standardized operating processes documented in operating playbooks to enhance guest experience and drive profit growth[31]. - The company aims to grow its profitable parts and service business by increasing service capacity and focusing on guest experience[37]. - The competitive landscape includes competition from both local dealerships and online services, with pricing and customer experience being key competitive factors[45]. Financial Performance - Approximately 86% of the company's total new vehicle revenue in 2024 was generated by luxury and mid-line import dealerships, which typically have higher operating margins[32]. - In 2024, the company repurchased approximately 0.6 million shares of its Class A Common Stock for approximately $34.4 million, with a remaining share repurchase authorization of approximately $252.3 million[29]. - The supply of late-model used vehicles in 2024 was affected by shortfalls in new vehicle manufacturing during the COVID-19 pandemic, with approximately 291.1 million light vehicles in operation in the U.S. as of December 31, 2024[44]. - The company emphasizes increasing sales of higher-margin products and services, including finance, insurance, and aftermarket products, to withstand economic cycles[36]. - The company believes that certified pre-owned vehicles will increase sales volume and enhance Fixed Operations business over the long term[38]. Employee Relations - The company had approximately 10,800 employees as of December 31, 2024[62]. - The company offers a company-wide minimum wage of $15 per hour for all hourly employees[65]. - Approximately 230 associates are represented by a labor union, primarily service technicians in northern California[62]. - The company provides competitive compensation and employee benefits to attract and retain skilled labor[63]. Financial Instruments and Interest Rates - The total outstanding balance of variable rate instruments was approximately $2.0 billion as of December 31, 2024[371]. - A 100 basis point decrease in interest rates would have reduced interest expense by approximately $19.9 million, while a 100 basis point increase would have resulted in approximately $18.2 million of additional interest expense for the 12 months ended December 31, 2024[371]. - As of December 31, 2024, the average rate on outstanding fixed rate debt was 4.66%[376]. - The company has interest rate cap agreements with a notional amount of $500 million, maturing on February 26, 2025[372]. - The fair value of the interest rate cap position was $0.0 million at December 31, 2024[372]. Environmental Compliance - The company has no known material environmental liabilities and believes compliance with governmental regulations will not have a material adverse effect on operations[56].

SONIC AUTOMOTIVE Investor Presentation | Fourth Quarter 2024 Updated February 12, 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," ...

Financial Data and Key Metrics Changes - GAAP EPS for Q4 2024 was $1.67, while adjusted EPS was $1.51, representing a 7% decrease year over year [11] - Consolidated total revenues reached an all-time quarterly record, up 9% year over year, with consolidated gross profit growing by 6% and adjusted EBITDA increasing by 5% [11] Business Line Data and Key Metrics Changes - Franchise dealership segment generated record quarterly revenues of $3.4 billion, up 12% year over year, driven by a 13% increase in new retail volume and a 5% increase in used retail volume [12] - Fixed operations gross profit and F&I gross profit set all-time quarterly records, increasing by 12% and 14% year over year, respectively [13] - EchoPark segment reported revenues of $506 million, down 9% from the prior year, but gross profit increased by 14% to $49 million [17] Market Data and Key Metrics Changes - New vehicle day supply decreased to 46 days from 57 days at the end of Q3, while used vehicle day supply was at 31 days [13][14] - EchoPark's used vehicle day supply finished Q4 at 38 days, up from 33 days at the end of Q3 [18] Company Strategy and Development Direction - The company is actively pursuing major acquisitions of new vehicle franchises in 2025, with a focus on luxury and import brands [10][28] - The company aims to maintain a conservative balance sheet while strategically deploying capital as market conditions evolve [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in EchoPark's long-term potential despite recent challenges in the used vehicle market, indicating a belief in a recovery in market conditions [18] - The company anticipates that the used car supply will hit the bottom in 2025, setting the stage for expansion in EchoPark [48] Other Important Information - The company ended the year with $862 million in available liquidity, including $384 million in cash and floor plan deposits [20] - A quarterly cash dividend of $0.35 per share was approved, payable on April 15, 2025 [21] Q&A Session Summary Question: What is the company's view on M&A activity and valuations? - Management noted that they see more opportunities in the luxury segment and that multiples have improved, allowing for strategic acquisitions without adding debt [27][28] Question: What are the key performance indicators needed for EchoPark to resume store openings? - Management indicated that affordability and inventory levels are critical, with plans to begin opening stores in 2026 if conditions improve [44][48] Question: How does the company view the impact of electric vehicles on gross profit? - Management acknowledged that electric vehicles have been a drag on gross profit, estimating a $400 impact, and emphasized the need for better inventory management by manufacturers [36][39] Question: What is the outlook for parts and service growth? - Management expects mid-single-digit growth in fixed operations, with the potential for upside due to the hiring of additional technicians [61][65] Question: How does the company perceive its valuation compared to peers? - Management expressed confusion over the discounted multiple despite strong performance and emphasized the importance of continued execution and growth [92][96]

Core Viewpoint - Sonic Automotive reported a revenue of $3.9 billion for the quarter ended December 2024, marking an 8.7% year-over-year increase, with an EPS of $1.51 compared to $1.63 a year ago, exceeding both revenue and EPS estimates from analysts [1] Financial Performance - The reported revenue of $3.9 billion surpassed the Zacks Consensus Estimate of $3.61 billion, resulting in a surprise of +7.84% [1] - The EPS of $1.51 also exceeded the consensus estimate of $1.46, delivering a surprise of +3.42% [1] - Sonic Automotive's shares returned +12.2% over the past month, outperforming the Zacks S&P 500 composite's +4.3% change [3] Segment Performance - In the Franchised Dealerships Segment, the same store unit sales volume for used vehicles was 25,492, slightly below the estimated 25,543 [4] - Total new vehicle sales in the Franchised Dealerships Segment reached 32,628, exceeding the average estimate of 30,326 [4] - Gross profit per unit for new vehicles was reported at $3,212, higher than the average estimate of $3,057.38 [4] - Revenues from parts, service, and collision repair were $476.70 million, above the average estimate of $462.90 million [4] - Total vehicle revenues amounted to $3.23 billion, surpassing the average estimate of $2.97 billion, reflecting a year-over-year change of +8.1% [4] - Revenues from used vehicles were $1.20 billion, slightly above the estimated $1.17 billion [4] - Revenues from new vehicles reached $1.96 billion, exceeding the average estimate of $1.74 billion [4] - Revenues from finance, insurance, and other net services were $190.60 million, above the estimated $180.74 million [4] - Powersports revenues were reported at $30.60 million, exceeding the average estimate of $28.36 million, representing a +12.5% year-over-year change [4] - Revenues from new vehicles - Fleet were $27.30 million, significantly above the average estimate of $18.38 million, reflecting a year-over-year change of +25.2% [4]

Group 1: Earnings Performance - Sonic Automotive reported quarterly earnings of $1.51 per share, exceeding the Zacks Consensus Estimate of $1.46 per share, but down from $1.63 per share a year ago, representing an earnings surprise of 3.42% [1] - The company posted revenues of $3.9 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 7.84%, compared to $3.58 billion in the same quarter last year [2] - Over the last four quarters, Sonic Automotive has surpassed consensus EPS estimates three times [2] Group 2: Stock Performance and Outlook - Sonic Automotive shares have increased approximately 18% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.25 on revenues of $3.44 billion, and for the current fiscal year, it is $6.15 on revenues of $14.37 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 in the near future [6] Group 3: Industry Context - The Automotive - Retail and Whole Sales industry is currently in the top 29% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Fourth quarter total revenues reached an all-time record of $3.9 billion, up 9% year-over-year; total gross profit was $574.0 million, up 6% year-over-year[2] - Reported net income for the fourth quarter was $58.6 million, a 51% increase year-over-year, translating to $1.67 earnings per diluted share, up 50% year-over-year[2] - Full year total revenues were $14.2 billion, down 1% year-over-year; gross profit was $2.2 billion, down 2% year-over-year[4] - Reported full year net income was $216.0 million, up 21% year-over-year, with $6.18 earnings per diluted share, up 24% year-over-year[4] - Total revenues for the twelve months ended December 2024 were $14,224.3 million, down 1% from $14,372.4 million in 2023[25] - Gross profit for the twelve months ended December 2024 was $2,192.8 million, down 2% from $2,245.7 million in 2023[25] - Net income for the twelve months ended December 2024 was $216.0 million, up 21% from $178.2 million in 2023[25] - Basic earnings per share for the twelve months ended December 2024 was $6.34, up 25% from $5.09 in 2023[25] - Reported net income for the three months ended December 31, 2024, was $35.2 million, with diluted earnings per share of $1.67, compared to $34.8 million and $1.11 for the same period in 2023[43] - Adjusted net income for the twelve months ended December 31, 2024, was $195.8 million, with diluted earnings per share of $5.60, compared to $244.0 million and $6.81 for the same period in 2023[43] Segment Performance - EchoPark Segment adjusted EBITDA for the fourth quarter was $4.2 million, a 146% increase year-over-year, compared to a $9.1 million adjusted EBITDA loss in the prior year[2] - Same store revenues in the Franchised Dealerships Segment were up 12%, with same store retail new vehicle unit sales volume up 13%[9] - EchoPark Segment retail used vehicle unit sales volume was 16,674 units, down 5% year-over-year[2] - Retail new vehicle revenues increased by 15% to $1,914.8 million for the three months ended December 31, 2024, compared to $1,664.1 million in 2023[26] - Total revenues for the Franchised Dealerships Segment rose by 12% to $3,359.0 million in Q4 2024, up from $3,001.1 million in Q4 2023[26] - Retail new vehicle unit sales volume increased by 13% to 32,250 units in Q4 2024, compared to 28,491 units in Q4 2023[26] - Used vehicle revenues showed a slight increase of 4% to $757.0 million in Q4 2024, compared to $727.5 million in Q4 2023[26] - Total gross profit for the Franchised Dealerships Segment increased by 5% to $517.4 million in Q4 2024, compared to $491.3 million in Q4 2023[26] - Total gross profit for the EchoPark segment increased by 14% to $49.0 million for the three months ended December 31, 2024, compared to $42.8 million in 2023[28] - Total gross profit for the Powersports segment increased to $7.5 million in Q4 2024, a 7% increase from $7.0 million in Q4 2023[38] Expenses and Profitability - SG&A expenses for Q4 2024 totaled $399.6 million, a 3% increase from $386.3 million in Q4 2023, with total adjusted SG&A expenses rising by 6% to $408.6 million[32] - Total SG&A expenses for the Franchised Dealerships Segment increased to $348.5 million in Q4 2024, up from $329.1 million in Q4 2023, representing a 6% increase[34] - Total SG&A expenses for the EchoPark Segment decreased to $42.6 million in Q4 2024, down from $48.0 million in Q4 2023, marking an 11% reduction[36] - Total adjusted SG&A expenses for the EchoPark Segment were $165.5 million for the twelve months ended December 31, 2024, a 30% decrease from $237.3 million in 2023[37] - Total gross profit margin as a percentage of gross profit improved to 69.6% in Q4 2024 from 71.4% in Q4 2023, reflecting a 180 basis points improvement[32] Future Outlook and Strategic Moves - Sonic acquired the remaining 50% equity in a joint venture in North Point Volvo and additional dealerships, expected to add approximately $145.0 million in annualized revenues[5] - The company anticipates future growth in each of its operating segments, subject to various risks and uncertainties[21] - The used-to-new vehicle sales ratio improved to 0.55 in Q4 2024 from 0.30 in Q4 2023, indicating a shift in sales strategy[31] Awards and Recognition - EchoPark Automotive received the 2023 Consumer Satisfaction Award from DealerRater, highlighting its customer-centric approach[20] Adjustments and Other Financial Metrics - Total pre-tax adjustments for the twelve months ended December 31, 2024, amounted to $14.6 million, compared to $79.9 million for the same period in 2023[43] - The company incurred storm damage charges of $3.2 million for the three months ended December 31, 2024, and $8.3 million for the twelve months ended December 31, 2024[44] - Cyber insurance proceeds of $10.0 million were recorded for the three months ended December 31, 2024[44] - The company reported a provision for income taxes of $23.5 million for the three months ended December 31, 2024, compared to $16.0 million for the same period in 2023[44]

Core Viewpoint - Analysts project that Sonic Automotive (SAH) will report quarterly earnings of $1.46 per share, reflecting a year-over-year decline of 10.4%, with revenues expected to reach $3.61 billion, an increase of 0.8% from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised downward by 2.4% over the past 30 days, indicating a collective reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3]. Revenue Estimates - Total vehicle revenues are projected at $2.97 billion, showing a year-over-year decline of 0.4% [5]. - Powersports revenues are estimated at $28.36 million, indicating a year-over-year increase of 4.3% [5]. - New vehicles - Fleet revenues are expected to be $18.38 million, reflecting a significant decline of 15.7% year over year [5]. - New vehicles - Retail revenues are projected at $1.74 billion, suggesting a year-over-year increase of 3.3% [6]. - Same Store Revenue for New Vehicles at Franchised Dealerships is also estimated at $1.74 billion, with a year-over-year change of 3.5% [6]. - Used Vehicles Same Store Revenue is expected to reach $714.96 million, indicating a decline of 1.3% from the previous year [6]. - EchoPark revenues are anticipated to be $497.10 million, reflecting a year-over-year increase of 3.2% [7]. Gross Profit Estimates - Gross Profit Per Unit for Used Vehicles is expected to be $1,414.70, down from $1,440 in the same quarter last year [7]. - Gross Profit from Parts, Service, and Collision Repair is projected to reach $231.81 million, compared to $215.40 million a year ago [8]. - Gross Profit from EchoPark is estimated at $50.47 million, up from $38.90 million in the same quarter last year [8]. - Gross Profit from Powersports is expected to be $6.49 million, down from $7 million year-over-year [9]. - Gross Profit from New Vehicles - Retail is projected at $93.39 million, a decrease from $124.50 million in the previous year [9]. Stock Performance - Sonic Automotive shares have increased by 14.2% over the past month, outperforming the Zacks S&P 500 composite, which rose by 4.2% [10]. - The company holds a Zacks Rank of 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [10].

The market expects Sonic Automotive (SAH) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on February 12, 2025, might help the stock move higher if these key numb ...