Core Insights - Sonic Automotive reported strong operational results for Q2 2025, with adjusted earnings per share of $2.19 and revenue of $3.7 billion, exceeding analyst expectations [1][2] - Despite positive operational data, the company recorded a net loss due to a significant non-cash impairment charge [1] - The quarter demonstrated solid segment trends, robust profit growth in key areas, and a higher dividend, although challenges related to costs and assets persist [1] Financial Performance - Adjusted EPS (Non-GAAP) was $2.19, surpassing the estimate of $1.63, and reflecting a 49% year-over-year increase [2] - Revenue reached $3.7 billion, slightly above the estimate of $3.68 billion, marking a 7% increase from $3.45 billion in Q2 2024 [2] - Gross profit was $602.2 million, up 12% from the previous year [2] - Adjusted EBITDA increased by 22% to $172.7 million [2] - EchoPark segment income saw a remarkable 679% increase to $10.9 million, despite a 2% decline in segment revenue [2][6] Business Model and Strategy - Sonic Automotive operates through three main segments: Franchised Dealerships, EchoPark, and Powersports [3] - The company emphasizes growth in luxury and used vehicle markets, supported by acquisitions and customer experience improvements [4] - Sonic's strategy includes expanding its store footprint, integrating new brands, and optimizing operational efficiency [4] Segment Performance - The Franchised Dealerships segment generated $3.1 billion in sales, a 7% increase, with segment income growing 74% to $91.6 million [5] - New vehicle unit sales rose by 5%, while used vehicle sales decreased by 4%, although profit per used vehicle improved by 3% [5] - The Powersports segment reported revenue of $48.1 million, but profits remained flat, with adjusted EBITDA down 13% [7] Recent Developments - Sonic completed the acquisition of four Jaguar Land Rover dealerships, expected to add approximately $500 million in annualized revenues [8] - The company raised its quarterly dividend by 9% to $0.38 per share, reflecting a commitment to capital return [10][12] Cost Management and Financial Position - SG&A as a percentage of gross profit improved to 68.5%, down from 72.9% a year ago, although absolute SG&A dollars increased by 5% [9] - The company ended the quarter with $210 million in cash and deposits, providing overall liquidity of $775 million [10] Future Outlook - Management did not provide specific financial guidance for the upcoming quarter or fiscal year, citing ongoing macroeconomic risks [11] - Investors are encouraged to monitor EchoPark's contribution to profit growth and the integration of newly acquired luxury dealerships [12]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements and management's analysis for the reporting period [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Q2 2025 saw a net loss of $45.6 million due to a $172.4 million impairment, despite 5.9% revenue growth [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net loss of $45.6 million was primarily driven by a $172.4 million impairment charge Q2 and H1 2025 vs 2024 Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,657.2 M | $3,453.0 M | $7,308.5 M | $6,837.0 M | | **Gross Profit** | $602.2 M | $539.1 M | $1,168.7 M | $1,075.3 M | | **Impairment Charges** | ($172.4 M) | ($1.4 M) | ($173.8 M) | ($2.4 M) | | **Operating Income (Loss)** | ($23.3 M) | $107.7 M | $121.6 M | $214.4 M | | **Net Income (Loss)** | ($45.6 M) | $41.2 M | $25.0 M | $83.2 M | | **Diluted EPS** | ($1.34) | $1.18 | $0.72 | $2.39 | - A significant impairment charge of **$172.4 million** in Q2 2025 was the primary driver for the net loss, compared to a minimal charge of **$1.4 million** in Q2 2024[12](index=12&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $5.93 billion as of June 30, 2025, with goodwill increasing due to acquisitions Balance Sheet Summary | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,777.4 M | $2,885.5 M | | **Total Assets** | $5,930.4 M | $5,895.7 M | | **Total Current Liabilities** | $2,706.8 M | $2,637.7 M | | **Long-Term Debt** | $1,474.0 M | $1,511.9 M | | **Total Liabilities** | $4,890.2 M | $4,833.4 M | | **Total Stockholders' Equity** | $1,029.6 M | $1,062.3 M | - Goodwill increased significantly to **$573.7 million** from **$358.5 million** at year-end 2024, primarily due to acquisitions. Other Intangible Assets, net, decreased to **$255.6 million** from **$430.3 million**, reflecting the impairment charge[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow significantly improved to $332.6 million, with substantial investment in acquisitions Six Months Ended June 30, Cash Flow Summary | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $332.6 M | ($66.3 M) | | **Net Cash used in Investing Activities** | ($421.9 M) | ($61.8 M) | | **Net Cash from Financing Activities** | $155.7 M | $166.4 M | | **Net Increase (Decrease) in Cash** | $66.4 M | $38.3 M | | **Cash at End of Period** | $110.4 M | $67.2 M | - Cash from operations improved significantly in H1 2025, driven by adjustments for non-cash charges like the **$173.8 million** asset impairment and favorable changes in receivables[24](index=24&type=chunk) - Investing activities saw a large cash outflow of **$359.9 million** for business acquisitions in H1 2025, compared to none in the prior-year period[24](index=24&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail $359.9 million in acquisitions, a $172.4 million impairment, and credit facility amendments - During the first six months of 2025, the company acquired four Jaguar Land Rover businesses for an aggregate gross purchase price of approximately **$359.9 million**, adding **$215.5 million** in goodwill[39](index=39&type=chunk) - Annual impairment testing as of April 30, 2025, resulted in a non-cash pre-tax franchise asset impairment charge of **$172.4 million**, reducing the carrying value of these assets to **$255.6 million**[50](index=50&type=chunk) - The company amended its Credit Agreement on March 13, 2024, extending the maturity to March 2029 and setting aggregate commitments at **$2.4 billion**[56](index=56&type=chunk) Segment Income (Loss) Summary (Six Months Ended June 30) | Segment | 2025 Income (Loss) | 2024 Income (Loss) | | :--- | :--- | :--- | | **Franchised Dealerships** | $183.6 M | $116.4 M | | **EchoPark** | $22.0 M | $0.9 M | | **Powersports** | ($3.5 M) | ($1.7 M) | | **Total Segment Income** | $202.1 M | $115.6 M | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue growth, segment performance, and the impact of a $172.4 million impairment [Executive Summary](index=25&type=section&id=Executive%20Summary) Q2 2025 saw increased new vehicle SAAR, improved EchoPark profitability, and $10.0 million cyber insurance proceeds - The company recognized **$10.0 million** in pre-tax income from cyber insurance proceeds during Q2 2025 related to the June 2024 CDK Global outage, which was recorded as a reduction to SG&A expenses[98](index=98&type=chunk) - Franchised Dealerships Segment: Same-store retail new vehicle revenue increased **6%** in Q2 2025, but gross profit per unit decreased by **$212** due to increased price competition[100](index=100&type=chunk) - EchoPark Segment: Reported total gross profit increased **22%** in Q2 2025, driven by a **47%** increase in used vehicle gross profit[104](index=104&type=chunk) [Results of Operations – Consolidated](index=28&type=section&id=Results%20of%20Operations%20%E2%80%93%20Consolidated) Q2 2025 consolidated results show revenue growth in new vehicles, Fixed Operations, and F&I, with margin shifts Consolidated Performance by Revenue Stream (Q2 2025 vs Q2 2024) | Category | Revenue Change | Gross Profit Change | Gross Profit Per Unit Change | | :--- | :--- | :--- | :--- | | **Retail New Vehicles** | +7% | +1% | -5% | | **Retail Used Vehicles** | 0% | +8% | +8% | | **Fixed Operations** | +12% | +14% | N/A | | **F&I** | +17% | +17% | +15% | [Results of Operations – Segment Analysis](index=36&type=section&id=Results%20of%20Operations%20%E2%80%93%20Segment%20Analysis) Franchised Dealerships, EchoPark, and Powersports segments all demonstrated revenue growth and improved profitability - **Franchised Dealerships:** Same-store Fixed Operations revenue grew **10%** in Q2 2025, with gross profit up **12%**, benefiting from higher vehicle recalls, warranty repairs, and increased technician headcount[159](index=159&type=chunk) - **EchoPark:** Same-market combined retail used vehicle and F&I gross profit per unit increased by **$590 (19%)** to **$3,717** in Q2 2025, driven by higher F&I penetration and improved inventory sourcing[174](index=174&type=chunk) - **Powersports:** Reported retail new vehicle revenue increased **24%** in Q2 2025, with gross profit per unit rising **15%** to **$2,828**[183](index=183&type=chunk) [SG&A, Other Expenses, and Income Taxes](index=75&type=section&id=SG%26A%2C%20Other%20Expenses%2C%20and%20Income%20Taxes) SG&A as a percentage of gross profit improved, but a $172.4 million impairment significantly impacted income - Total SG&A expenses as a percentage of gross profit decreased to **68.5%** in Q2 2025 from **72.9%** in Q2 2024, partly due to a **$10.0 million** benefit from cyber insurance proceeds[216](index=216&type=chunk)[219](index=219&type=chunk) - Impairment charges for Q2 2025 were **$172.4 million**, primarily from the annual franchise asset impairment test, compared to **$1.4 million** in Q2 2024[224](index=224&type=chunk) - Floor plan interest expense for new vehicles decreased by **$3.7 million** in Q2 2025, driven by a lower average interest rate[227](index=227&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $775.1 million available, repurchased shares, and declared dividends Available Liquidity Resources | Resource | June 30, 2025 | | :--- | :--- | | Cash and cash equivalents | $110.4 M | | Floor plan deposit balance | $100.0 M | | Availability under Revolving Credit Facility | $320.6 M | | Availability under Mortgage and Sidecar Facilities | $244.1 M | | **Total Available Liquidity** | **$775.1 M** | - In the first six months of 2025, the company repurchased approximately **0.7 million** shares of Class A Common Stock for **$44.1 million**. The remaining share repurchase authorization is approximately **$208.2 million**[242](index=242&type=chunk) - The Board of Directors approved a cash dividend of **$0.35** per share during Q2 2025 and subsequently approved a dividend of **$0.38** per share for Q3 2025[244](index=244&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on $2.2 billion in variable rate debt, impacting interest expense - The company's variable rate debt stood at **$2.2 billion** at the end of Q2 2025, with a **1.0%** interest rate change impacting interest expense by **$11.3 million** over six months[266](index=266&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[269](index=269&type=chunk) - No material changes to internal control over financial reporting occurred during Q2 2025[270](index=270&type=chunk) [PART II – OTHER INFORMATION](index=87&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=87&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters but has recorded no significant related liabilities as of June 30, 2025 - The company is involved in various legal proceedings but recorded **no significant liabilities** for these matters as of June 30, 2025[76](index=76&type=chunk)[77](index=77&type=chunk)[274](index=274&type=chunk) [Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) An updated risk factor highlights potential negative impacts from new tariffs on imported automobiles and parts - The risk factor for tariffs and foreign trade was updated to reflect potential negative impacts from new U.S. government tariffs on imported automobiles and parts[276](index=276&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=89&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 0.1 million shares for $8.8 million, with $208.2 million remaining Share Repurchases (Q2 2025) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | — | | May 2025 | 0.1 M | $62.82 | | June 2025 | — | — | | **Total** | **0.1 M** | **N/A** | - As of June 30, 2025, the remaining availability under the company's share repurchase program was **$208.2 million**[279](index=279&type=chunk) [Other Information](index=90&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements in Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during Q2 2025[282](index=282&type=chunk) [Exhibits](index=91&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data files

Financial Data and Key Metrics Changes - Reported GAAP EPS was a loss of $1.34 per share, primarily due to a non-cash charge related to annual franchise asset impairment testing. Adjusted EPS for the second quarter was $2.19 per share, a 49% increase year over year [4] - Consolidated total revenues reached a second quarter record, up 6% year over year, while consolidated gross profit grew 12% and consolidated adjusted EBITDA increased 22% [5] Business Line Data and Key Metrics Changes - Franchise Dealership segment generated record revenues of $3.1 billion, up 6% year over year, driven by a 5% increase in same store new retail volume and a 10% increase in same store fixed operations revenues [5] - Fixed operations gross profit and F&I gross profit set all-time quarterly records, up 1215% and 14% year over year respectively on a same store basis [6] - EchoPark segment income was an all-time quarterly record of $11.7 million, with adjusted EBITDA also at a record of $16.4 million, up 128% year over year [8] - Powersports segment generated record revenues of $48.1 million, up 21% year over year, with gross profit of $12.5 million, up 17% year over year [9] Market Data and Key Metrics Changes - Same store used vehicle GPU was $3,391, down 6% year over year but up 10% sequentially from the first quarter due to a surge in pre-tariff consumer demand [6] - EchoPark segment total GPU was an all-time quarterly record of $3,747 per unit, up $669 per unit year over year [8] Company Strategy and Development Direction - The company remains focused on deploying capital via a diversified growth strategy across franchise dealerships, EchoPark, and powersports segments to grow revenue and enhance shareholder returns [11] - The acquisition of four Jaguar Land Rover dealerships in California is expected to contribute approximately $500 million in annualized revenues to the franchise dealership segment [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty regarding the impact of tariffs on vehicle pricing, they have not seen a material impact to date [12] - The company is confident in its strategy and team to adapt to ongoing changes in the automotive retail environment and macroeconomic backdrop [13] Other Important Information - The Board of Directors approved a 9% increase to the quarterly cash dividend to $0.38 per share, payable on October 15, 2025 [11] - The company ended the quarter with $775 million in available liquidity, including $210 million in cash and floor plan deposits [10] Q&A Session Summary Question: What surprised you the most in Q2? - Management noted that the business picked up nicely in the back half of July, which was unexpected given the tariff noise [18] Question: Can you elaborate on the lease return expectations? - Management indicated that lease returns are expected to improve significantly in 2026, which will positively impact used vehicle inventory and volume growth [24][25] Question: What is the strategy regarding EchoPark's volume and profitability? - Management is being cautious with inventory management to maximize margins, which has resulted in strong gross dollars despite lower volume [30] Question: How did the new vehicle GPU trend throughout the quarter? - New vehicle GPUs were stronger at the beginning of the quarter, with April at approximately $3,600, May at $3,250, and June at $3,300 [40][42] Question: What are the expectations for new vehicle SAAR trajectory? - Management expects the SAAR to be in the range of 15 million to 16 million, depending on interest rates and market conditions [62]

Financial Data and Key Metrics Changes - Reported GAAP EPS was a loss of $1.34 per share, while adjusted EPS for the second quarter was $2.19 per share, representing a 49% increase year over year [5] - Consolidated total revenues reached a record of $3.1 billion, up 6% year over year, with consolidated gross profit growing 12% and adjusted EBITDA increasing 22% [6] Business Line Data and Key Metrics Changes - Franchise Dealership segment generated record revenues of $3.1 billion, up 6% year over year, driven by a 5% increase in same store new retail volume and a 10% increase in same store fixed operations revenues [6] - Same store new vehicle gross profit per unit (GPU) was $3,391, down 6% year over year but up 10% sequentially [7] - EchoPark segment reported revenues of $509 million, down 2% year over year, but achieved a record gross profit of $62 million, up 22% year over year [10] - Powersports segment generated record revenues of $48.1 million, up 21% year over year, with gross profit increasing 17% [11] Market Data and Key Metrics Changes - Same store fixed operations gross profit increased by 12% year over year, with warranty gross profit up 34% and customer pay gross profit growing 9% year over year [9] - EchoPark segment retail unit sales volume increased by 1% year over year, with total GPU reaching a record of $3,747 per unit, up $669 year over year [10] Company Strategy and Development Direction - The company remains focused on a diversified growth strategy across franchise dealerships, EchoPark, and powersports segments to enhance revenue and shareholder returns [13] - The acquisition of four Jaguar Land Rover dealerships is expected to contribute approximately $500 million in annualized revenues, positioning the company as the largest Jaguar Land Rover retailer in the U.S. [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are uncertainties due to tariffs, they have not seen a material impact on vehicle pricing to date [14] - The company is optimistic about the second half of the year, with expectations of improved performance in July and beyond [18] - Management expressed confidence in the EchoPark business model and its potential for disciplined long-term growth [10][21] Other Important Information - The Board of Directors approved a 9% increase in the quarterly cash dividend to $0.38 per share, payable on October 15, 2025 [13] - The company ended the quarter with $775 million in available liquidity, including $210 million in cash and floor plan deposits [12] Q&A Session Summary Question: What surprised you the most in Q2? - Management noted that the business picked up nicely in the back half of July, which was unexpected given the tariff noise [18] Question: How do you view lease returns impacting your business? - Management indicated that lease returns are at a low point now, and as they increase, it will significantly benefit used vehicle inventory and sales volume [24] Question: Can you elaborate on the changes in your F&I agreements? - Management explained that they renegotiated positions with product providers, leading to cost savings and improved margins [36] Question: How did new vehicle GPU trend throughout the quarter? - New vehicle GPU was stronger at the beginning of the quarter, with figures around $3,600 in April, dropping to approximately $3,300 by June [40][42] Question: What are your expectations for new vehicle SAAR trajectory? - Management suggested that the SAAR could be in the range of 15 million to 16 million, depending on interest rates and market conditions [64]

Financial Performance & Segments - Sonic Automotive's total revenues were $1422 billion in FY 2024[8], a decrease of 1% compared to $1437 billion in FY 2023[71] - GAAP EPS was $618 in FY 2024[8], a 24% increase year-over-year[71] - Adjusted EPS was $681 in FY 2024[8] - Franchised Dealerships Segment revenues reached $119 billion in FY 2024[10] - EchoPark Segment revenues were $21 billion in FY 2024[10] - Powersports Segment revenues totaled $157 million in FY 2024[10] Franchised Dealerships Segment Strategy - Franchised Dealerships Segment adjusted EBITDA was $526 million in Q2 2025[19] - The company anticipates FY 2025 new vehicle GPU in the $2800 to $3200 per unit range[60] - The company anticipates used vehicle GPU in the $1300 to $1500 per unit range[60] EchoPark Segment Strategy - EchoPark Segment achieved an all-time record quarterly adjusted EBITDA in Q2 2025[44] - The company expects adjusted EBITDA between $50 million and $55 million for the EchoPark Segment in FY 2025[60]

Core Insights - Sonic Automotive reported quarterly earnings of $2.19 per share, exceeding the Zacks Consensus Estimate of $1.63 per share, and showing an increase from $1.47 per share a year ago, resulting in an earnings surprise of +34.36% [1] - The company achieved revenues of $3.66 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.44% and up from $3.45 billion year-over-year [2] - Sonic Automotive shares have increased approximately 26.2% year-to-date, outperforming the S&P 500's gain of 8.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.58 on revenues of $3.6 billion, and for the current fiscal year, it is $6.42 on revenues of $14.73 billion [7] - The estimate revisions trend for Sonic Automotive was favorable prior to the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Automotive - Retail and Whole Sales industry is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Penske Automotive, a competitor in the same industry, is expected to report quarterly earnings of $3.56 per share, reflecting a year-over-year change of -1.4%, with revenues anticipated to be $7.87 billion, up 2.2% from the previous year [9][10]

[Second Quarter 2025 Financial Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20Overview) [Executive Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Summary) Sonic Automotive reported record revenues and gross profit in Q2 2025, though a significant net loss resulted from a one-time non-cash impairment charge Key Financial Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenues | $3.7 Billion | +6% | | Total Gross Profit | $602.2 Million | +12% | | Reported Net Loss | $(45.6) Million | -211% | | Reported Diluted Loss Per Share | $(1.34) | -214% | | Adjusted Net Income | $76.2 Million | +49% | | Adjusted Diluted Earnings Per Share | $2.19 | +49% | | Reported SG&A as a % of Gross Profit | 68.5% | -440 bps | | Adjusted SG&A as a % of Gross Profit | 69.2% | -150 bps | - The reported net loss was primarily driven by a **$172.4 million** non-cash, pre-tax franchise rights impairment charge[2](index=2&type=chunk) [Management Commentary](index=2&type=section&id=Commentary) Management highlighted record consolidated revenues and record adjusted EBITDA from the EchoPark segment, praising the team's performance and strategic execution - CEO David Smith expressed pride in the team for achieving record consolidated revenues and a record quarterly adjusted EBITDA for the EchoPark segment[3](index=3&type=chunk) - President Jeff Dyke noted the Franchised Dealerships segment achieved record total revenues, with fixed operations and F&I gross profit accounting for nearly **75% of total gross profit**[3](index=3&type=chunk) - CFO Heath Byrd emphasized the company's strong balance sheet, with approximately **$775 million in total liquidity**, and a focus on deploying capital through a diversified growth strategy[3](index=3&type=chunk)[5](index=5&type=chunk) [Strategic Developments and Shareholder Returns](index=2&type=section&id=Strategic%20Developments%20and%20Shareholder%20Returns) The company expanded its market leadership by acquiring four Jaguar Land Rover dealerships and increased its quarterly cash dividend by 9% - The company completed the acquisition of four Jaguar Land Rover dealerships, expected to add approximately **$500 million in annualized revenues**, making Sonic the largest Jaguar Land Rover retailer in the U.S[1](index=1&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) - The Board of Directors approved a **9% increase** in the quarterly cash dividend to **$0.38 per share**, payable on October 15, 2025[4](index=4&type=chunk)[7](index=7&type=chunk) [Second Quarter 2025 Segment Highlights](index=3&type=section&id=Second%20Quarter%202025%20Segment%20Highlights) [Franchised Dealerships Segment](index=3&type=section&id=Franchised%20Dealerships%20Segment) The Franchised Dealerships segment delivered higher total revenue and gross profit, driven by strong performance in fixed operations and F&I [Reported Operating Performance](index=7&type=section&id=Franchised%20Dealerships%20Segment%20-%20Reported) Franchised Dealerships Segment Reported Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues (in millions) | $3,100.5 | $2,896.2 | +7% | | Total Gross Profit (in millions) | $527.6 | $477.3 | +11% | | Retail New Vehicle Sales (Units) | 28,084 | 26,512 | +6% | | Retail Used Vehicle Sales (Units) | 24,953 | 25,668 | -3% | | Fixed Operations Gross Profit (in millions) | $248.9 | $219.0 | +14% | | F&I Gross Profit (in millions) | $144.3 | $124.2 | +16% | | Retail New PVR | $3,391 | $3,579 | -5% | | Retail Used PVR | $1,583 | $1,508 | +5% | | F&I PVR | $2,721 | $2,380 | +14% | [Same Store Operating Performance](index=8&type=section&id=Franchised%20Dealerships%20Segment%20-%20Same%20Store) Franchised Dealerships Segment Same Store Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Same Store Total Revenues (in millions) | $3,065.8 | $2,887.2 | +6% | | Same Store Total Gross Profit (in millions) | $521.2 | $477.3 | +9% | | Same Store Retail New Vehicle Sales (Units) | 27,867 | 26,432 | +5% | | Same Store Retail Used Vehicle Sales (Units) | 24,584 | 25,545 | -4% | | Same Store Fixed Operations Gross Profit | | | +12% | | Same Store F&I Gross Profit | | | +15% | | Same Store Retail New PVR | $3,391 | $3,603 | -6% | | Same Store Retail Used PVR | $1,590 | $1,541 | +3% | | Same Store F&I PVR | $2,718 | $2,383 | +14% | - As of June 30, 2025, the Franchised Dealerships segment had a **54-day supply** of new vehicles and a **35-day supply** of used vehicles[9](index=9&type=chunk) [EchoPark Segment](index=2&type=section&id=EchoPark%20Segment) The EchoPark segment achieved record gross profit, segment income, and adjusted EBITDA, reflecting strong operational efficiency and profitability gains [Reported Operating Performance](index=9&type=section&id=EchoPark%20Segment%20operating%20results%20include%3A) EchoPark Segment Reported Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues (in millions) | $508.6 | $517.3 | -2% | | Total Gross Profit (in millions) | $62.1 | $51.1 | +22% | | Retail Used Vehicle Sales (Units) | 16,742 | 16,641 | +1% | | Reported Segment Income (in millions) | $11.7 | $3.9 | +200% | | Adjusted Segment Income (in millions) | $10.9 | $1.4 | +679% | | Adjusted EBITDA (in millions) | $16.4 | $7.2 | +128% | | Used Vehicle & F&I PVR | $3,747 | $3,078 | +22% | [Same Market Operating Performance](index=10&type=section&id=EchoPark%20Segment%20-%20Same%20Market) EchoPark Segment Same Market Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Same Market Total Revenues (in millions) | $509.0 | $518.1 | -2% | | Same Market Total Gross Profit (in millions) | $61.6 | $51.9 | +19% | | Same Market Used Vehicle Sales (Units) | 16,742 | 16,641 | +1% | | Used Vehicle & F&I PVR | $3,717 | $3,127 | +19% | - As of June 30, 2025, the EchoPark segment had a **41-day supply** of used vehicles[9](index=9&type=chunk) [Powersports Segment](index=3&type=section&id=Powersports%20Segment) The Powersports segment delivered record revenue and gross profit, though impairment charges led to a decline in reported segment income and adjusted EBITDA [Reported Operating Performance](index=11&type=section&id=Powersports%20Segment%20operating%20results%20include%3A) Powersports Segment Reported Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues (in millions) | $48.1 | $39.6 | +21% | | Total Gross Profit (in millions) | $12.5 | $10.7 | +17% | | Retail New Vehicle Sales (Units) | 1,394 | 1,193 | +17% | | Used Vehicle Sales (Units) | 817 | 522 | +57% | | Segment Income (in millions) | $0.0 | $0.5 | -100% | | Adjusted EBITDA (in millions) | $2.0 | $2.3 | -13% | [Same Store Operating Performance](index=12&type=section&id=Powersports%20Segment%20-%20Same%20Store) Powersports Segment Same Store Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Same Store Total Revenues (in millions) | $42.2 | $37.7 | +12% | | Same Store Total Gross Profit (in millions) | $11.4 | $10.3 | +11% | | Same Store Retail New Vehicle Sales (Units) | 1,237 | 1,159 | +7% | | Same Store Used Vehicle Sales (Units) | 725 | 495 | +46% | [Company Information](index=4&type=section&id=Company%20Information) [About Sonic Automotive](index=4&type=section&id=About%20Sonic%20Automotive) Sonic Automotive is a Fortune 500 company aiming to be the most valued diversified automotive retail and service brand in the United States - Sonic Automotive's goal is to become the **most valued diversified automotive retail and service brand** in America[11](index=11&type=chunk) - The company's culture is centered on creating an industry-leading customer experience through strategic investments in technology, its team, and its philosophy[11](index=11&type=chunk) [About EchoPark Automotive](index=4&type=section&id=About%20EchoPark%20Automotive) EchoPark Automotive is a leading retailer of nearly-new used vehicles, offering a best-in-class guest experience through a unique business model - EchoPark Automotive is one of the most comprehensive retailers of nearly-new pre-owned vehicles, offering a best-in-class shopping experience and innovative technology-driven sales process[12](index=12&type=chunk) - The company's guest-centric buying process provides savings of up to **$3,000 versus the competition** and earned it the 2023 DealerRater Consumer Satisfaction Award[12](index=12&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements involve the company's future goals, plans, objectives, and operational performance[13](index=13&type=chunk) - These statements are not guarantees of future performance and are subject to risks such as tariffs, economic conditions, supply chain disruptions, inflation, and interest rate changes[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This release includes non-GAAP financial measures, and the company has provided reconciliations to the most directly comparable GAAP measures - Non-GAAP financial measures include adjusted net income, adjusted diluted EPS, adjusted SG&A as a percentage of gross profit, adjusted segment income, and adjusted EBITDA[14](index=14&type=chunk) - The company provides reconciliations for these measures to enhance disclosure transparency and provide a meaningful presentation of performance[14](index=14&type=chunk) [Company Contacts](index=5&type=section&id=Company%20Contacts) Contact information is provided for investor and media inquiries - Investor inquiries can be directed to Heath Byrd (EVP and CFO) or Danny Wieland (VP, Investor Relations & Financial Reporting) at ir@sonicautomotive.com[15](index=15&type=chunk) - Media inquiries can be directed to Sonic Automotive Media Relations at media.relations@sonicautomotive.com[15](index=15&type=chunk) [Second Quarter 2025 Earnings Conference Call Details](index=3&type=section&id=Second%20Quarter%202025%20Earnings%20Conference%20Call) Senior management will host a conference call on July 24, 2025, at 11:00 AM Eastern Time to discuss the second quarter financial results - The conference call will be held on **July 24, 2025, at 11:00 AM (Eastern Time)**[8](index=8&type=chunk) - Investors can access the live webcast at ir.sonicautomotive.com or by dialing (877) 407-8289 (domestic) or +1 (201) 689-8341 (international)[8](index=8&type=chunk)[10](index=10&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=6&type=section&id=Results%20of%20Operations%20(Unaudited)) [Consolidated Results of Operations](index=6&type=section&id=Results%20of%20Operations%20-%20Consolidated) Total revenues grew 6% to $3.66 billion, but a $172.4 million impairment charge led to a reported net loss of $45.6 million Consolidated Results of Operations (Q2 2025 vs Q2 2024) | Metric (in millions, except per share data) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $3,657.2 | $3,453.0 | 6% | | Total Gross Profit | $602.2 | $539.1 | 12% | | Income (Loss) from Operations | $(23.3) | $107.7 | (122)% | | Income (Loss) Before Taxes | $(69.1) | $55.7 | (224)% | | Net Income (Loss) | $(45.6) | $41.2 | (211)% | | Diluted Earnings (Loss) Per Share | $(1.34) | $1.18 | (214)% | | Dividends Per Share | $0.35 | $0.30 | 17% | - Q2 2025 results include a **$172.4 million impairment charge**, compared to a $1.4 million charge in Q2 2024[17](index=17&type=chunk) [Non-GAAP Reconciliations - SG&A Expenses](index=13&type=section&id=Non-GAAP%20Reconciliations%20-%20SG&A%20Expenses) This section provides reconciliations of reported SG&A expenses to adjusted SG&A expenses for the consolidated company and its operating segments [Consolidated SG&A Expenses](index=13&type=section&id=Non-GAAP%20Reconciliation%20-%20Consolidated%20-%20SG&A%20Expenses) Consolidated SG&A Expense Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Total SG&A Expenses (in millions) | $412.6 | $393.0 | (5)% | | Adjusted Total SG&A Expenses (in millions) | $416.9 | $382.7 | (9)% | | Reported SG&A as a % of Gross Profit | 68.5% | 72.9% | 440 bps | | Adjusted SG&A as a % of Gross Profit | 69.2% | 70.7% | 150 bps | - Adjustments to Q2 2025 SG&A include a **$10.0 million cyber insurance recovery** and **$4.1 million in storm damage expenses**[25](index=25&type=chunk) [Franchised Dealerships Segment SG&A Expenses](index=15&type=section&id=Non-GAAP%20Reconciliation%20-%20Franchised%20Dealerships%20Segment%20-%20SG&A%20Expenses) Franchised Dealerships Segment SG&A Expense Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Total SG&A Expenses (in millions) | $360.2 | $347.9 | (4)% | | Adjusted Total SG&A Expenses (in millions) | $363.7 | $335.1 | (9)% | | Reported SG&A as a % of Gross Profit | 68.3% | 72.9% | 460 bps | | Adjusted SG&A as a % of Gross Profit | 68.9% | 69.9% | 100 bps | - Adjustments to Q2 2025 SG&A include a **$10.0 million cyber insurance recovery** and **$4.1 million in storm damage expenses**[27](index=27&type=chunk) [EchoPark Segment SG&A Expenses](index=17&type=section&id=Non-GAAP%20Reconciliation%20-%20EchoPark%20Segment%20-%20SG&A%20Expenses) EchoPark Segment SG&A Expense Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Total SG&A Expenses (in millions) | $42.2 | $37.2 | (13)% | | Adjusted Total SG&A Expenses (in millions) | $43.0 | $39.7 | (8)% | | Reported SG&A as a % of Gross Profit | 68.0% | 72.9% | 490 bps | | Adjusted SG&A as a % of Gross Profit | 69.3% | 77.7% | 840 bps | [Powersports Segment SG&A Expenses](index=19&type=section&id=Non-GAAP%20Reconciliation%20-%20Powersports%20Segment%20-%20SG&A%20Expenses) Powersports Segment SG&A Expense Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Total SG&A Expenses (in millions) | $10.2 | $7.9 | (29)% | | Reported SG&A as a % of Gross Profit | 81.1% | 73.7% | (740) bps | [Non-GAAP Reconciliations - Segment Income (Loss)](index=20&type=section&id=Non-GAAP%20Reconciliations%20-%20Segment%20Income%20(Loss)) This section reconciles income (loss) before taxes to segment income (loss) and adjusted segment income (loss) for each operating segment [Franchised Dealerships Segment Income (Loss)](index=20&type=section&id=Non-GAAP%20Reconciliation%20-%20Franchised%20Dealerships%20Segment%20-%20Income%20(Loss)%20Before%20Taxes%20and%20Segment%20Income%20(Loss)) Franchised Dealerships Segment Income (Loss) Reconciliation (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Income (Loss) Before Taxes | $(74.3) | $52.7 | (241)% | | Segment Income (Loss) | $91.6 | $52.7 | 74% | | Adjusted Segment Income (Loss) | $88.1 | $67.5 | 31% | - Q2 2025 adjustments include a **$165.9 million impairment charge** and a **$10.0 million cyber insurance recovery**[34](index=34&type=chunk) [EchoPark Segment Income (Loss)](index=20&type=section&id=Non-GAAP%20Reconciliation%20-%20EchoPark%20Segment%20-%20Income%20(Loss)%20Before%20Taxes%20and%20Segment%20Income%20(Loss)) EchoPark Segment Income (Loss) Reconciliation (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Income (Loss) Before Taxes | $11.7 | $2.5 | 368% | | Segment Income (Loss) | $11.7 | $3.9 | 200% | | Adjusted Segment Income (Loss) | $10.9 | $1.4 | 679% | [Powersports Segment Income (Loss)](index=21&type=section&id=Non-GAAP%20Reconciliation%20-%20Powersports%20Segment%20-%20Income%20(Loss)%20Before%20Taxes%20and%20Segment%20Income%20(Loss)) Powersports Segment Income (Loss) Reconciliation (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Income (Loss) Before Taxes | $(6.5) | $0.5 | (1400)% | | Segment Income (Loss) | $0.0 | $0.5 | (100)% | | Adjusted Segment Income (Loss) | $0.0 | $0.5 | (100.0)% | - Q2 2025 adjustments include a **$6.5 million impairment charge**[35](index=35&type=chunk) [Non-GAAP Reconciliation - Consolidated Net Income (Loss) and Diluted Earnings (Loss) Per Share](index=22&type=section&id=Non-GAAP%20Reconciliation%20-%20Consolidated%20-%20Net%20Income%20(Loss)%20and%20Diluted%20Earnings%20(Loss)%20Per%20Share) Adjusted net income was $76.2 million, or $2.19 per diluted share, a 49% year-over-year increase after excluding special items Consolidated Net Income (Loss) and Diluted EPS Reconciliation (Q2 2025 vs Q2 2024) | Metric (in millions, except per share data) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Reported Net Income (Loss) | $(45.6) | $41.2 | | Reported Diluted Earnings (Loss) Per Share | $(1.34) | $1.18 | | Total Pre-Tax Adjustments | $168.1 | $13.7 | | Tax Impact of Above Items | $(46.3) | $(3.6) | | Adjusted Net Income (Loss) | $76.2 | $51.3 | | Adjusted Diluted Earnings (Loss) Per Share | $2.19 | $1.47 | - **Adjusted diluted earnings per share increased 49%** year-over-year[2](index=2&type=chunk) - Key pre-tax adjustments include a **$172.4 million impairment charge** and a **$10.0 million cyber insurance recovery**[36](index=36&type=chunk) [Non-GAAP Reconciliation - Adjusted EBITDA](index=23&type=section&id=Non-GAAP%20Reconciliation%20-%20Adjusted%20EBITDA) Consolidated adjusted EBITDA for Q2 2025 was $172.7 million, driven by strong performance from the Franchised Dealerships and EchoPark segments Adjusted EBITDA Reconciliation (Q2 2025 vs Q2 2024) | Segment (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Franchised Dealerships Segment | $154.3 | $131.8 | | EchoPark Segment | $16.4 | $7.2 | | Powersports Segment | $2.0 | $2.3 | | **Total Adjusted EBITDA** | **$172.7** | **$141.3** | - EchoPark segment adjusted EBITDA **increased 128%** year-over-year[4](index=4&type=chunk)[37](index=37&type=chunk) - Powersports segment adjusted EBITDA **decreased 13%** year-over-year[9](index=9&type=chunk)[37](index=37&type=chunk)

Group 1 - Sonic Automotive (SAH) is a notable stock in the Retail-Wholesale sector, which consists of 204 individual stocks and holds a Zacks Sector Rank of 11 [2] - Sonic Automotive has a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 2.5% increase in the consensus estimate for full-year earnings over the past quarter [3] - Year-to-date, Sonic Automotive has returned 21.8%, significantly outperforming the Retail-Wholesale sector average return of 5.8% [4] Group 2 - Sonic Automotive is part of the Automotive - Retail and Wholesale industry, which includes 10 companies and currently ranks 163 in the Zacks Industry Rank, with an average gain of 0.3% year-to-date [5] - In contrast, Stitch Fix (SFIX), another Retail-Wholesale stock, has returned 14.4% year-to-date and belongs to the Retail - Apparel and Shoes industry, which has declined by 9.4% [4][6] - Investors interested in Retail-Wholesale stocks should monitor Sonic Automotive and Stitch Fix for their continued strong performance [6]

Rallygoers can Purchase or Win One of 26 Exclusive Sturgis Edition Motorcycles and Join the Sturgis Harley-Davidson Founders Club CHARLOTTE, N.C. and STURGIS, S.D., July 22, 2025 /PRNewswire/ -- Sonic Automotive, Inc. ("Sonic" or the "Company") (NYSE: SAH), one of the nation's largest automotive and powersports retailers, is kicking off a milestone celebration for the 85th Sturgis Motorcycle Rally with a regionwide push across all five of its Harley- Davidson dealerships in the Black Hills, including the fi ...

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on identifying undervalued companies through fundamental analysis [2][3] Company Analysis - Sonic Automotive (SAH) is highlighted as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and an A grade in the Value category [3] - SAH has a PEG ratio of 0.71, which is lower than the industry average of 0.81, indicating potential undervaluation [4] - The P/S ratio for SAH is 0.18, compared to the industry's average of 0.27, suggesting that the stock is trading at a lower valuation relative to its sales [5] - SAH's P/CF ratio stands at 7.68, significantly lower than the industry average of 11.04, further supporting the notion of undervaluation based on cash flow [6] - Overall, the metrics indicate that SAH is likely undervalued, especially when considering its strong earnings outlook [7]