Sonic Automotive Inc. reported lower net income but higher revenue for the second quarter as new- and used-vehicle volume at its franchised dealerships and its EchoPark used-only stores dropped.
Sonic’s net income tumbled 17 percent to $94.8 million, while revenue increased 9 percent to $3.65 billion, an all-time record, the Charlotte, N.C., retailer said Thursday.
Sonic also announced it was backing off certain goals for the EchoPark standalone used-vehicle unit and ending a strategic review of the business, with no action taken.
“Despite persistent industrywide headwinds that contributed to lower new vehicle sales volume as a result of ongoing supply chain disruptions and inventory constraints, we continued to see strong new vehicle pricing and consumer demand during the second quarter,” Sonic CEO David Smith said in a statement.
Smith also said Sonic has “made significant progress” on the integration of RFJ Auto Partners Holdings, a 33-store dealership group acquired in December. The RFJ deal added 22 franchised dealerships and 11 used-only stores to Sonic. Smith said the acquisition is expected to result in “meaningful synergies in future periods, further demonstrating the strength of the franchised dealership model and Sonic’s capacity to reinvest in its business for long-term growth and shareholder returns.”
Second-quarter revenue for the EchoPark unit rose 12 percent to $665.6 million, a record. The used business posted a pretax loss of $34.9 million in the quarter.
Sonic expanded the brand by opening an EchoPark delivery center in Columbus, Ga., and a retail hub in Raleigh, N.C., in April. In May, Sonic opened an EchoPark retail hub in St. Louis. Sonic operates 50 EchoPark locations nationwide.
Sonic shares were trading up 3.7 percent late Thursday morning to $41.38.
Second-quarter revenue: $3.65 billion, up 9 percent from a year earlier
Second-quarter net income: $94.8 million , down 17 percent
Second-quarter vehicle sales: Franchised dealerships sold 52,498 new and used retail vehicles, down 11 percent. On a same-store basis, volume of new and used retail vehicles at franchised stores dropped 25 percent to 43,690 vehicles. EchoPark stores sold 16,608 used vehicles, down 22 percent. EchoPark’s volume dropped 41 percent on a same-market basis to 12,440 vehicles.
Records: All-time quarterly revenue, all-time quarterly gross profit, all-time quarterly total finance and insurance gross profit per retail vehicle and all-time quarterly EchoPark revenue
Ranking: Sonic ranks No. 7 on Automotive News’ most recent list of the top 150 dealership groups based in the U.S., with retail sales of 103,486 new vehicles in 2021.