AutoNation(AN)2025-02-14 21:45Financial Performance - For the year ended December 31, 2024, net income was $692.2 million, with diluted earnings per share of $16.92, compared to net income of $1.0 billion and diluted earnings per share of $22.74 in 2023[172]. - Total revenue for 2024 was $26,765.4 million, a decrease of $183.5 million or 0.7% compared to 2023[221]. - Gross profit for 2024 was $4,785.4 million, a decline of 6.73% from $5,131.5 million in 2023[330]. - Operating income fell by $346.4 million or 21.0% to $1,305.5 million in 2024[192]. - Net income from continuing operations for 2024 was $692.2 million, a decrease of 32.2% compared to $1,020.2 million in 2023[330]. Revenue Breakdown - New vehicle sales accounted for 49% of total revenue and 16% of total gross profit, while used vehicle sales accounted for 29% of total revenue and 9% of total gross profit[168]. - New vehicle revenue increased to $13,048.2 million in 2024, up 2.2% from $12,767.4 million in 2023[330]. - Used vehicle revenue decreased to $7,719.9 million in 2024, down 5.8% from $8,198.5 million in 2023[330]. - Parts and service revenue increased by $110.5 million or 2.5% to $4,503.5 million, contributing to a gross profit margin of 46.1%[196][197]. Sales Performance - Retail vehicle unit sales for new vehicles increased by 10,169 units or 4.2% to 254,715 units in 2024, while used vehicle sales decreased by 8,111 units or 3.0% to 265,908 units[192]. - Retail new vehicle unit sales increased to 254,715 in 2024, up 10,169 units or 4.2% from 2023[223]. - Retail used vehicle unit sales decreased to 265,908 in 2024, down 8,111 units or 3.0% from 2023[223]. Inventory and Supply - New vehicle inventory units increased to approximately 42,600 as of December 31, 2024, compared to 35,300 in 2023[178]. - Days supply for new vehicles increased to 39 days in 2024 from 36 days in 2023, while used vehicle supply decreased to 37 days from 39 days[193]. - The net new vehicle inventory carrying expense increased to $(73.8) million in 2024, compared to $(6.3) million in 2023, primarily due to higher floorplan interest expense[204]. Expenses and Costs - Total gross profit decreased by 7% in 2024, driven by a 27% decrease in new vehicle gross profit and a 14% decrease in used vehicle gross profit[173]. - Selling, general, and administrative expenses as a percentage of revenue remained stable at 12.2% in 2024 compared to 12.1% in 2023[193]. - SG&A expenses totaled $3,263.9 million in 2024, an increase of $10.7 million (0.3%) from 2023[242]. Segment Performance - Segment income for Domestic decreased to $254.9 million in 2024, down $160.5 million or 38.6% from 2023, impacted by lower gross profits across new and used vehicles[225]. - Segment income for Import fell to $476.6 million in 2024, a decrease of $158.4 million or 24.9% compared to 2023, primarily due to reduced new vehicle gross profit margins[229]. - Premium Luxury total revenue decreased by $126.5 million (1.2%) in 2024 compared to 2023, primarily due to declines in new and used vehicle revenue[231]. Cash Flow and Debt - Net cash provided by operating activities decreased to $314.7 million in 2024 from $724.0 million in 2023, a decline of 56.5%[274]. - As of December 31, 2024, total long-term debt, net of current maturities, was $2.6 billion, down from $3.1 billion in 2023[266]. - The company reported a net cash used in financing activities of $300.6 million in 2024, compared to $172.5 million in 2023, indicating a significant increase in cash outflow[337]. Strategic Initiatives - The company is investing significantly in strategic initiatives, including the expansion of its AutoNation Finance business and AutoNation USA used vehicle stores[56]. - The company continues to grow its AutoNation Finance business, increasing finance penetration rates associated with vehicles sold through its stores[282]. Cybersecurity and Operational Risks - The company relies on information technology and is exposed to cybersecurity risks that could disrupt operations and impact financial results[56]. - The CDK outage negatively impacted same store unit volume and productivity in vehicle sales and service processes in the latter half of June 2024[207]. Market Conditions - The automotive retail industry remains sensitive to economic conditions, impacting vehicle sales and profit margins[293]. - The U.S. industry new vehicle unit sales increased to 16.0 million in 2024 from 15.6 million in 2023, indicating a recovery in market conditions[169].