• GAAP EPS: $1.67 per share.
• Adjusted EPS: $1.51 per share, a 7% decrease year over year.
• Total Revenue: All-time quarterly record, up 9% year over year.
• Consolidated Gross Profit: Increased 6% year over year.
• Consolidated Adjusted EBITDA: Increased 5% year over year.
• Franchise Dealership Revenue: $3.4 billion, up 12% year over year.
• New Retail Volume: Increased 13% year over year.
• Used Retail Volume: Increased 5% year over year.
• Fixed Operations Revenue: Increased 10% year over year.
• New Vehicle Day Supply: Decreased to 46 days from 57 days in the previous quarter.
• Same Store New Vehicle GPU: $3,241.
• Used Inventory Day Supply: 31 days.
• Used GPU: $1,396 per unit on a same store basis.
• FNI GPU: $2,427, up 4% sequentially and year over year.
• Same Store Fixed Operations Gross Profit: Increased 12% year over year.
• Echo Park Adjusted EBITDA: $4.2 million, below guidance.
• Echo Park Revenue: $506 million, down 9% year over year.
• Echo Park Gross Profit: $49 million, up 14% year over year.
• Echo Park Retail Unit Sales Volume: Approximately 16,700 units, down 5% year over year.
• Echo Park Gross Profit Per Unit: $3,004, up $606 year over year.
• Power Sports Revenue: $30.6 million.
• Power Sports Gross Profit: $7.5 million.
• Power Sports Adjusted EBITDA Loss: $1 million.
• Available Liquidity: $862 million, excluding unencumbered real estate.
• Cash and Floor Plan Deposits: $384 million.
• Quarterly Cash Dividend: $0.35 per share.

• Warning! GuruFocus has detected 6 Warning Sign with SAH.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sonic Automotive Inc (NYSE:SAH) achieved all-time record quarterly franchise revenues of $3.4 billion, up 12% year over year.
• The company reported a 13% increase in new retail volume and a 5% increase in used retail volume.
• Echo Park segment achieved profitability on a pre-tax basis in 2024, with adjusted EBITDA of $27.6 million, up from a loss of $83 million in 2023.
• Sonic Automotive Inc (NYSE:SAH) successfully added 335 net technicians in 2024, exceeding their goal and setting the stage for strong fixed operations growth in 2025.
• The company announced a quarterly cash dividend of $0.35 per share, reflecting confidence in its financial position.

Negative Points

• Adjusted EPS for the fourth quarter was $1.51 per share, a 7% decrease year over year.
• Echo Park's fourth quarter adjusted EBITDA was $4.2 million, below the previous guidance of $7 million to $8 million.
• Used vehicle supply constraints and consumer affordability remain challenges, impacting the used vehicle segment.
• The company experienced a $200 sequential decline in used GPU at Echo Park due to inventory management issues.
• Sonic Automotive Inc (NYSE:SAH) faces potential headwinds from electric vehicle inventory management, impacting new GPU by approximately $400.

Q & A Highlights

Q: Can you provide insights into Sonic Automotive's strategy for mergers and acquisitions, particularly in the luxury segment? A: Jeff Dyke, President of Sonic Automotive, explained that the company sees significant opportunities in the luxury segment, with multiples improving. They are well-positioned financially to pursue acquisitions without adding debt, focusing on luxury and import brands across various regions, including California, Florida, and Texas. The company is ready to announce deals soon, leveraging their strong balance sheet and operational readiness.

Q: How are electric vehicles (EVs) impacting gross profit per unit (GPU), and what are your expectations moving forward? A: Jeff Dyke noted that EVs have been a $400 drag on GPU, particularly affecting luxury brands and the West Coast. The company aims to manage EV inventory better to align with consumer demand. Danny Wieland added that they have adjusted their EV inventory to match sales rates, which should help stabilize GPU.

Q: What are the key performance indicators (KPIs) for EchoPark, and when do you plan to resume store openings? A: Jeff Dyke stated that they plan to start opening new EchoPark stores in the first or second quarter of 2026, contingent on improving affordability and used car supply. They are focusing on operational improvements and right-sizing inventory to prepare for expansion.

Q: How did EchoPark perform in the fourth quarter compared to competitors like CarMax and Carvana? A: Jeff Dyke acknowledged that EchoPark's growth was modest at 4-5% on a same-store basis, partly due to overaged inventory. He emphasized that they have addressed inventory issues and expect better performance in the first quarter.

Q: What is the outlook for the Power Sports segment, and is now a good time to expand in this area? A: Jeff Dyke mentioned that while there are opportunities in the Power Sports segment, they are taking a cautious approach to expansion. They are focusing on operational synergies and fine-tuning their playbooks before making significant investments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.