Sonic Automotive Q3: Revenue And Earnings Miss Expectations, Shares Surge On Dividend Boost

Sonic Automotive, Inc. SAH shares surged after the company reported third-quarter results and raised its quarterly dividend by 17%.

The company’s total revenue declined 4.2% year-over-year to $3.491 billion, missing the consensus estimate of $3.55 billion. The company reported adjusted earnings per share of $1.26 (-38% YoY), below the street view of $1.43.

Franchised Dealerships segment operating results include same-store revenues declining 2% and same-store gross profit decreasing 7%.

Quarterly gross profit fell 7% year over year to $543.6 million, and the gross margin stood at 15.6% (down 40 bps YoY). Operating income fell 17% YoY to $113.6 million, and the margin contracted 50 bps to 3.3%.

The company’s EchoPark segment revenues of $544.9 million fell 13% year over year, with gross profit up 5% YoY to $55.2 million. Retail used vehicle unit sales volume of 17,757, down 7% YoY.

EchoPark Segment adjusted EBITDA rose 271% YoY to $8.9 million, and excluding closed stores, it was $9.2 million, a 454% improvement YoY.

Powersports Segment revenues of $59.4 million, up 4% YoY; gross profit of $17.7 million (-15% YoY).

Dividend: Sonic approved a 17% increase to the quarterly cash dividend, to $0.35 per share, payable on January 15, 2025, to all stockholders of record on December 13, 2024

“Our diversified cash flow streams continued to benefit our overall financial position in the third quarter, despite operational disruption from the CDK outage. As of September 30, 2024, we had approximately $418 million in cash and floor plan deposits on hand, and approximately $834 million of total liquidity, before considering unencumbered real estate,” commented Heath Byrd, Sonic Automotive’s Chief Financial Officer.

Price Action: SAH shares traded higher by 6.32% at $58.98 at the last check Thursday.

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