Sonic Automotive(US:SAH)2024-10-24 20:00Sales Performance - The U.S. retail automotive industry's total new vehicle seasonally adjusted annual rate of unit sales volume increased 1% to approximately 15.6 million vehicles for the three and nine months ended September 30, 2024, compared to 15.5 million vehicles for the same periods in 2023[98]. - Same store retail new vehicle revenue was flat, with a 2% increase in retail new vehicle unit sales volume during the three and nine months ended September 30, 2024[103]. - Retail new vehicle unit sales increased by 1% to 28,657 units in Q3 2024 from 28,260 units in Q3 2023[122]. - Total combined retail new and used vehicle unit sales decreased by 2% to 72,131 units for the three months ended September 30, 2024, compared to 73,688 units in the prior year[142]. - Total combined retail new and used vehicle unit sales for the nine months ended September 30, 2024, were 212,865 units, down 2% from 216,602 units in the prior year[142]. Revenue Trends - Retail new vehicle revenue for Q3 2024 was $1,566.8 million, a decrease of 6.7% from $1,573.5 million in Q3 2023[122]. - Total new vehicle revenue for Q3 2024 was $1,589.0 million, down 7.7% from $1,596.7 million in Q3 2023[122]. - Retail used vehicle revenue for Q3 2024 was $1,180.7 million, down 12% from $1,340.4 million in Q3 2023[127]. - Total retail used vehicle revenue for the nine months ended September 30, 2024, was $2,162.8 million, a decrease of $160.0 million, or 7%[167]. - Total revenue for the three months ended September 30, 2024, was $1,329.6 million, an increase of $53.3 million, or 4%, compared to the same period in 2023[188]. Profitability Metrics - Retail new vehicle gross profit decreased 33% and 31% during the three and nine months ended September 30, 2024, primarily due to increased price competition and higher inventory costs[103]. - Retail new vehicle gross profit for Q3 2024 was $87.6 million, a decline of 43.8% compared to $131.4 million in Q3 2023[122]. - Retail used vehicle gross profit per unit decreased by $280, or 17%, to $1,386 for Q3 2024[168]. - Total new vehicle gross profit as a percentage of revenue for Q3 2024 was 5.6%, down from 8.3% in Q3 2023[122]. - Total gross profit for Fixed Operations for the nine months ended September 30, 2024, was $670.4 million, a 5% increase from $640.1 million in the prior year[184]. Inventory and Cost Management - The company aims to maintain EchoPark Segment used vehicle inventory days' supply in the 30- to 40-day range to limit exposure to market pricing volatility[110]. - Fixed Operations revenue decreased 7% and 5% during the three and nine months ended September 30, 2024, with gross profit decreasing 10% and 8% in the same periods, primarily due to lower repair order volume[113]. - The company faced challenges due to higher inventory acquisition costs and increased price competition, impacting overall sales performance[173]. Financing and Insurance (F&I) Performance - F&I revenue decreased 3% and 2% during the three and nine months ended September 30, 2024, affected by lower gross profit per finance contract[105]. - Reported F&I revenue for the three months ended September 30, 2024, was $175.6 million, a 1% increase from $173.7 million in the same period of 2023[142]. - F&I revenue for the same market increased by 25% to $51.4 million from $41.0 million year-over-year[208]. Segment Performance - Reported total revenues for the EchoPark Segment decreased 13% and 14% during the three and nine months ended September 30, 2024, driven by a 7% decrease in retail used vehicle unit sales volume[106]. - EchoPark Segment revenues for the three months ended September 30, 2024, were $544.9 million, down 13% from $626.7 million in the same period of 2023[275]. - Powersports Segment revenues increased by 4% to $59.4 million for the three months ended September 30, 2024, compared to $57.0 million in 2023[275]. Operational Expenses - Consolidated SG&A expenses for the three months ended September 30, 2024, totaled $392.1 million, a decrease of 4% compared to $409.6 million for the same period in 2023[282]. - Total SG&A expenses as a percentage of gross profit increased to 72.7% for the three months ended September 30, 2024, compared to 71.2% for the same period in 2023, reflecting a 150 basis points increase[282]. - Rent expenses decreased significantly by 24% to $8.9 million for the three months ended September 30, 2024, compared to $11.7 million in 2023[282]. Warranty and Customer Pay Revenue - Warranty revenue in Fixed Operations increased by 24% to $76.6 million in Q3 2024, compared to $62.0 million in Q3 2023[136]. - Customer pay revenue for the nine months ended September 30, 2024, increased by 3% to $627.6 million from $610.6 million in the same period last year[185]. - Warranty revenue increased approximately $1.5 million, or 115%, and warranty gross profit increased approximately $1.5 million, or 214%[262].