The country’s largest auto retailer said Tuesday (April 20) that rising new and used vehicle prices as well as its lucrative parts and service and financing businesses combined to deliver AutoNation’s most profitable quarter ever — the fourth time in a row that it has set a new record.
For the three months ending March 31, the Fort Lauderdale-based operator of over 315 automotive retail locations said it earned $240 million on same-store sales that rose 27 percent to $5.9 billion, per a company press release.
At the same time, the company’s growing digital business helped lower its selling expenses by more than 11 percentage points, CEO Mike Jackson said, to 63 percent of profits.
“A year ago I said I felt a seismic shift towards personal transportation, towards personal space in the home, and I was asked is this temporary or momentary … I said no, I think this is a scarring event that has created significant demand for personal transportation, and you see that in our numbers now and our record first quarter,” Jackson said on a televised appearance on CNBC.
In addition to its earnings, AutoNation also said it acquired 11 stores and one collision center in Hilton Head and Columbia, South Carolina, and Savannah, Georgia, from Peacock Automotive Group. The purchase is expected to bring in approximately $380 million in additional annual revenue and will go toward expanding the footprint of its digital unit, AutoNation USA.
“AutoNation is targeting to have over 130 AutoNation USA stores in operation from coast-to-coast by the end of 2026,” the company said, up from just five locations currently.
At the same time, the company said it is now looking to sell 1 million combined new and pre-owned vehicles annually.
“This is our fourth all-time record in a row,” Jackson said, before thanking 95 percent of the company’s employees who masked-up every day and came to work. “Revenue was up 27 percent year over year and gross profit was also up 27 percent, resulting in a tripling of our [earnings per share].”
The Non-Core Businesses
Currently, AutoNation does about two-thirds of its revenue in just three states; Florida, Texas and California, and nearly 70 percent of its profits come from its Parts & Service and Finance & Insurance units, even though the two segments combined account for less than 20 percent of revenue.
That said, its core vehicle sales business saw same-store new car retail sales increase 22 percent last quarter, with used car comp sales rising 28 percent.
In terms of profitability, AutoNation said it earned $2,739 per new vehicle sold, a 61 percent jump from a year amounting to roughly an extra $1,000 per car. On the used car front, the average profit was $1,744, marking a 17 percent increase from a year ago.
By comparison, AutoNation said its Financial Services unit grew by 6 percent to roughly $2,200 per vehicle in profits.
As far as the company stock is concerned, AutoNation shares have more than tripled over the past 12 months, giving it a market value of over $8 billion.
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