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01/11 11:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate positive developments: strategic growth in EchoPark and Powersports, a significant acquisition in the franchise segment, and a dividend increase. Despite some challenges (e.g., medical expenses, luxury sales slowdown), management's optimistic guidance for margin improvements and growth in 2024 and beyond, coupled with operational synergies, support a positive outlook. The market cap suggests a moderate reaction, aligning with a 'Positive' sentiment prediction.
GAAP EPS $1.33 per share for Q3 2025.
Adjusted EPS $1.41 per share for Q3 2025, a 12% increase year-over-year. The increase was driven by strong operating performance, though partially offset by higher medical expenses and a higher-than-expected effective income tax rate.
Consolidated Total Revenues $4 billion, up 14% year-over-year, marking an all-time quarterly record.
Consolidated Gross Profit Grew 13% year-over-year, achieving an all-time quarterly record.
Consolidated Adjusted EBITDA Increased 11% year-over-year.
Franchised Dealerships Revenue $3.4 billion, up 17% year-over-year and 11% on a same-store basis. Growth was driven by a 7% increase in same-store new retail volume, a 3% increase in same-store used retail volume, and a 6% increase in same-store fixed operations revenues.
Same-Store New Vehicle GPU $2,852, down 7% year-over-year and 16% sequentially. The decline was due to a surge in pre-tariff consumer demand in Q2 2025 and a higher mix of electric vehicle sales, which reduced average GPUs by approximately $300 per unit.
Same-Store Used Vehicle GPU $1,530 per unit, up 10% year-over-year but down 4% sequentially.
Franchise F&I GPU $2,597 per unit, up 11% year-over-year but down 5% sequentially. The elevated electric vehicle sales mix reduced average F&I GPU by approximately $100 per unit.
Same-Store Fixed Operations Gross Profit Increased 8% year-over-year. Same-store warranty gross profit grew 13% year-over-year, and same-store customer pay gross profit grew 6% year-over-year. Growth was attributed to increased technician headcount and retention efforts.
EchoPark Adjusted Segment Income $2.7 million for Q3 2025.
EchoPark Adjusted EBITDA $8.2 million, down 8% year-over-year.
EchoPark Revenues $523 million, down 4% year-over-year.
EchoPark Gross Profit $54 million, down 1% year-over-year.
EchoPark Retail Unit Sales Volume Decreased 8% year-over-year. The decline was attributed to unexpected off-rental supply headwinds, which contributed to approximately 2,000 fewer retail unit sales.
EchoPark Total GPU $3,359 per unit, up 8% year-over-year but down 10% sequentially.
Powersports Revenue $84 million, up 42% year-over-year, marking an all-time quarterly record.
Powersports Gross Profit $23 million, up 32% year-over-year, marking an all-time quarterly record.
Powersports Adjusted EBITDA $10.1 million, up 74% year-over-year, marking an all-time quarterly record.
Available Liquidity $815 million, including $264 million in combined cash and floor plan deposits.
Electric Vehicles: Increased consumer demand for electric vehicles ahead of the expiration of the federal tax credit, boosting retail sales volume and average selling price.
Powersports Segment: Generated all-time record quarterly revenues of $84 million, up 42% year-over-year, and gross profit of $23 million, up 32% year-over-year. Adjusted EBITDA reached a record $10.1 million, up 74% year-over-year.
Franchised Dealerships: Achieved all-time record quarterly franchise revenues of $3.4 billion, up 17% year-over-year, driven by increases in new and used retail volume and fixed operations revenues.
EchoPark Segment: Reported revenues of $523 million, down 4% year-over-year, with retail unit sales volume decreasing 8% year-over-year. However, total GPU reached a record $3,359 per unit, up 8% year-over-year.
Fixed Operations: Gross profit increased 8% year-over-year, with warranty gross profit up 13% and customer pay gross profit up 6% year-over-year.
Technician Capacity: Attributed growth in customer pay revenue to increased technician headcount achieved in 2024 and ongoing efforts to retain and grow technician capacity in 2025.
Acquisition of Jaguar Land Rover Dealerships: Completed acquisition of Jaguar Land Rover, Santa Monica, and four other dealerships in California, making Sonic Automotive the largest Jaguar Land Rover retailer in the U.S.
EchoPark Business Model Adjustments: Strategic adjustments made to the EchoPark business model to address used vehicle market challenges and position for disciplined store openings in 2026.
Medical Expenses: Third quarter earnings were negatively affected by a significant increase in medical expenses, impacting profitability.
Effective Income Tax Rate: Higher-than-expected effective income tax rate partially offset the strength of operating performance.
Electric Vehicle Sales Mix: Higher mix of electric vehicle sales reduced franchise average new vehicle gross profit per unit by approximately $300 and F&I gross profit per unit by approximately $100.
EchoPark Segment Challenges: EchoPark retail unit sales volume decreased 8% year-over-year due to unexpected off-rental supply headwinds, leading to approximately 2,000 fewer retail unit sales than forecasted.
Tariff Impact: Potential tariffs on manufacturer production and pricing decisions could impact vehicle affordability and consumer demand, though no material impact has been observed yet.
Used Vehicle Inventory Acquisition: Challenges in acquiring quality used vehicle inventory at attractive prices affected EchoPark's ability to meet sales forecasts.
Franchised Dealerships: The company expects continued strength in F&I per unit, which is anticipated to remain structurally higher than pre-pandemic levels. Efforts to grow technician capacity in 2025 are expected to sustain customer pay revenue growth.
EchoPark Segment: The company plans to resume a disciplined store opening cadence for EchoPark in 2026, contingent on sufficient improvement in used vehicle market conditions. Focus will remain on increasing the mix of non-auction sourced inventory to enhance consumer affordability and retail sales volume.
Powersports Segment: The company aims to identify operational synergies within the current network before expanding the Powersports footprint further.
Capital Deployment: The company will continue deploying capital through a diversified growth strategy across Franchised Dealerships, EchoPark, and Powersports segments to grow revenue and enhance shareholder returns.
Tariff Impact: The company is monitoring potential impacts of tariffs on vehicle affordability and consumer demand, though no material impact has been observed to date.
Quarterly Cash Dividend: The Board of Directors approved a quarterly cash dividend of $0.38 per share payable on January 15, 2026, to all stockholders of record on December 15, 2025.
The earnings call summary and Q&A indicate positive developments: strategic growth in EchoPark and Powersports, a significant acquisition in the franchise segment, and a dividend increase. Despite some challenges (e.g., medical expenses, luxury sales slowdown), management's optimistic guidance for margin improvements and growth in 2024 and beyond, coupled with operational synergies, support a positive outlook. The market cap suggests a moderate reaction, aligning with a 'Positive' sentiment prediction.
The earnings call summary presents a mixed but overall positive picture. Strong financial metrics, such as record-high franchised F&I GPU and EchoPark segment income, indicate positive performance. Despite some challenges like the decrease in same-store used volume, the optimistic guidance and strategic focus on improving margins and operational synergies are promising. The Q&A session highlighted management's confidence in future growth, particularly with EchoPark's expansion plans. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
The earnings call presents mixed signals. Financial performance shows record revenues and increased EPS, but guidance is cautious due to tariff uncertainties. The share repurchase program is a positive, but competitive pressures and supply chain challenges raise concerns. Q&A reveals management's uncertainty about tariffs and cautious outlook on EchoPark guidance. Given the market cap of $1.8 billion, the stock is likely to experience a neutral price reaction, with potential fluctuations within a small range due to these mixed factors.
The earnings call highlights record revenues and profits in key segments, robust liquidity, and a consistent dividend payout. Despite some concerns about tariffs and conservative guidance, management's strategic hiring and operational efficiency reflect positively. The Q&A reveals cautious optimism, with management prepared for tariff impacts and maintaining strong F&I performance. Given the market cap, the stock is likely to react positively, driven by solid financial results and strategic positioning, resulting in a 2-8% increase over the next two weeks.
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