[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]

Technical Analysis - Sonic Automotive, Inc. (SAH) has reached a key level of support, indicated by a "golden cross" where the 50-day simple moving average has crossed above the 200-day simple moving average [1] - A golden cross is a bullish technical chart pattern that suggests a potential breakout, typically involving the 50-day and 200-day moving averages [2] Market Performance - Over the past four weeks, shares of SAH have increased by 9.1%, indicating positive market momentum [4] - The company currently holds a 3 (Hold) rating on the Zacks Rank, suggesting it may be poised for further breakout [4] Earnings Expectations - There have been five upward revisions in earnings expectations for the current quarter, with no downward changes in the past 60 days, which supports the bullish outlook for SAH [4] - The Zacks Consensus Estimate for SAH has also moved higher, reinforcing investor confidence in the stock's upward trend [4] Investment Consideration - Given the significant technical indicator and the positive movement in earnings estimates, SAH is recommended for inclusion on investors' watchlists [6]

Company Overview - Sonic Automotive (SAH) is headquartered in Charlotte and operates in the Retail-Wholesale sector [3] - The stock has experienced a price change of 5.57% since the beginning of the year [3] Dividend Information - Sonic Automotive currently pays a dividend of $0.35 per share, resulting in a dividend yield of 2.09% [3] - This yield is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.23% and the S&P 500's yield of 1.57% [3] - The company's annualized dividend of $1.40 has increased by 12% from the previous year [4] - Over the last 5 years, Sonic Automotive has raised its dividend 4 times, averaging an annual increase of 35.72% [4] - The current payout ratio is 24%, indicating that the company pays out 24% of its trailing 12-month EPS as dividends [4] Earnings Growth - Earnings growth for Sonic Automotive appears strong, with the Zacks Consensus Estimate for 2025 at $6.43 per share, reflecting a 14.82% increase from the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - High-yielding stocks may face challenges during periods of rising interest rates, but Sonic Automotive presents a compelling investment opportunity as a strong dividend play [7] - The stock currently holds a Zacks Rank of 3 (Hold) [7]

Company Overview - Sonic Automotive (SAH) is headquartered in Charlotte and operates in the Retail-Wholesale sector, with a year-to-date price change of -0.96% [3] - The company currently pays a dividend of $0.35 per share, resulting in a dividend yield of 2.23%, which is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.24% and the S&P 500's yield of 1.59% [3] Dividend Performance - Sonic Automotive's annualized dividend of $1.40 has increased by 12% from the previous year [4] - Over the past five years, the company has raised its dividend four times, achieving an average annual increase of 35.72% [4] - The current payout ratio stands at 24%, indicating that the company distributes 24% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Sonic Automotive's earnings in 2025 is projected at $6.28 per share, reflecting a year-over-year earnings growth rate of 12.14% [5] Investment Considerations - Sonic Automotive is considered a compelling investment opportunity due to its strong dividend profile and solid earnings growth potential [7] - The stock is currently rated with a Zacks Rank of 3 (Hold), indicating a neutral outlook [7]

Financial Performance - Sonic Automotive's total revenues were $14.22 billion in FY 2024, a decrease of 1% year-over-year [9, 71] - GAAP EPS was $6.18 in FY 2024, compared to $4.97 in FY 2023, representing a 24% increase [9, 71] - Adjusted EBITDA was $560.1 million in FY 2024 [72] - In Q1 2025, total revenues reached $3.65 billion, an 8% increase year-over-year [9, 74] - Q1 2025 diluted earnings per share was $2.04, a 70% increase year-over-year [74] Segment Performance - Franchised Dealerships Segment revenues totaled $11.9 billion in FY 2024 [10] - EchoPark Segment revenues were $2.1 billion in FY 2024 [10] - Powersports Segment revenues reached $157 million in FY 2024 [10] - EchoPark Segment achieved an all-time record quarterly adjusted EBITDA in Q1 2025 [44] Strategic Focus and Outlook - The company anticipates new vehicle GPU in the $2,500 to $3,000 per unit range for FY 2025, depending on tariff impacts [57, 60] - Used vehicle GPU is expected to be in the $1,300 to $1,500 per unit range for FY 2025 [57, 60] - The company expects mid-single-digit percentage growth in fixed operations gross profit for FY 2025 [57, 60] - Sonic Automotive expects F&I GPU in the $2,400 per unit range for FY 2025 [57, 60]

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [5] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [6][11] Business Segment Data and Key Metrics Changes - Franchised dealership segment revenues reached $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [6] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year [8] - EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% to $64 million [9] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and an adjusted EBITDA loss of $700,000 [10] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [7] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [7] - Parts and service gross profit increased by 7% in the first quarter [8] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [5] - A data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize market volatility disruptions [10] - The company plans to adapt to ongoing changes in the automotive retail environment while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and believes that the automotive industry can handle price adjustments without significant concerns [17][20] - The company is focused on executing its operational playbooks and processes, expecting solid results in the upcoming quarters [18][19] - Management acknowledged the need to balance warranty and customer pay work in service operations to improve revenue mix [50][51] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [11] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [11] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the tariff impacts, but they expect things to stabilize in the next 90 days [17] - The company is not concerned about significant price increases and believes they can navigate through the situation [19] Question: Update on fixed operations hiring - Management reported hiring 345 additional technicians, which has positively impacted fixed operations [23][24] - There is ongoing focus on increasing technician headcount to meet service demand [26] Question: Used vehicle GPU trajectory - Management stated that GPU margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [38][39] Question: Warranty work versus customer pay - Warranty work grew by 40% in the first quarter, while customer pay grew by only 2-3%, indicating a need to adjust the revenue mix [47][50] Question: EchoPark's full-year guidance - Management explained that guidance was conservative due to potential tariff impacts, but they are prepared to adjust as conditions evolve [77][78] Question: SG&A expenses - Management noted that first-quarter SG&A expenses were influenced by one-time compensation costs, but overall expenses are in line with expectations [82][84]

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [6] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [7][12] Business Line Data and Key Metrics Changes - Franchised dealership segment generated record revenues of $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [7] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year; EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% [9][10] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and a segment adjusted EBITDA loss of $700,000 [11] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter due to luxury brand mix [8] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [8] - EchoPark segment total gross profit per unit was a record $3,411, up $456 per unit year over year [10] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [6] - The data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize disruptions from market volatility [10] - The company plans to adapt to ongoing changes in the automotive retail environment and macroeconomic backdrop while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current tariff environment, stating that they expect things to settle down in the next 90 days [18] - The company is focused on executing its playbooks and processes, believing that they can handle the challenges posed by tariffs [19] - Management noted that they are well-positioned to resume disciplined long-term growth for EchoPark once used vehicle market conditions improve [10] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [12] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [12] - The company updated or withdrew certain items in its previous financial guidance for 2025 due to uncertainty around the effects of tariffs on the automotive industry [12] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the impact of tariffs, but they expect to navigate the situation effectively [18][19] Question: Update on fixed operations hiring - Management confirmed the hiring of 345 technicians, which has positively impacted fixed operations, and they plan to continue hiring [24][26] Question: Used vehicle GPU trajectory - Management stated that margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [39][40] Question: Warranty work metrics - Warranty work grew by 40% in the first quarter, while customer pay growth was only 2-3%, indicating a need to balance the mix better [48][49] Question: EchoPark's guidance and tariff impact - Management explained that they are being conservative with guidance due to potential tariff impacts, but they are optimistic about future performance [72][80] Question: SG&A expenses - Management noted that first quarter SG&A expenses were in line with expectations, with no systematic changes driving them higher [84][86] Question: EchoPark's inventory management - Management expressed confidence in their ability to manage inventory effectively and adapt to market conditions, including potential tariff impacts [92][94]