Sonic Automotive(SAH) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Results Overview Executive Summary 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] Management 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] - 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] - 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][5] Strategic Developments and Shareholder Returns 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][3][4] - The Board of Directors approved a 9% increase in the quarterly cash dividend to $0.38 per share, payable on October 15, 2025[4][7] Second Quarter 2025 Segment Highlights Franchised Dealerships Segment The Franchised Dealerships segment delivered higher total revenue and gross profit, driven by strong performance in fixed operations and F&I Reported Operating Performance 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 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] EchoPark Segment The EchoPark segment achieved record gross profit, segment income, and adjusted EBITDA, reflecting strong operational efficiency and profitability gains Reported Operating Performance 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 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] Powersports Segment 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 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 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 About Sonic Automotive 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] - The company's culture is centered on creating an industry-leading customer experience through strategic investments in technology, its team, and its philosophy[11] About EchoPark Automotive 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] - 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] Forward-Looking Statements 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] - 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] Non-GAAP Financial Measures 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] - The company provides reconciliations for these measures to enhance disclosure transparency and provide a meaningful presentation of performance[14] Company Contacts 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] - Media inquiries can be directed to Sonic Automotive Media Relations at media.relations@sonicautomotive.com[15] Second Quarter 2025 Earnings Conference Call Details 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] - Investors can access the live webcast at ir.sonicautomotive.com or by dialing (877) 407-8289 (domestic) or +1 (201) 689-8341 (international)[8][10] Financial Statements and Non-GAAP Reconciliations Consolidated Results of Operations 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] Non-GAAP Reconciliations - SG&A Expenses 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 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] Franchised Dealerships Segment SG&A Expenses 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] EchoPark Segment SG&A Expenses 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 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) 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) 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] EchoPark Segment Income (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) 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] Non-GAAP Reconciliation - Consolidated Net Income (Loss) and Diluted Earnings (Loss) Per Share 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] - Key pre-tax adjustments include a $172.4 million impairment charge and a $10.0 million cyber insurance recovery[36] Non-GAAP Reconciliation - Adjusted EBITDA 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][37] - Powersports segment adjusted EBITDA decreased 13% year-over-year[9][37]