The nation’s six publicly traded auto dealership groups all saw net income decline in the first quarter, in some cases by double digits, as post-pandemic supply and demand continued its return to normal dynamics and other headwinds made their mark.
Asbury Automotive Group, AutoNation Inc., Group 1 Automotive Inc., Lithia Motors Inc., Penske Automotive Group Inc. and Sonic Automotive Inc. also have reported sizable decreases in gross profit per new vehicle retailed.
A variety of factors are to blame depending on the company, including reduced vehicle gross profit, rising expenses, increased floorplan costs and continued higher interest rates. Some of the six public groups are partially countering this through acquisitions, particularly Lithia, Asbury and Group 1, which all saw healthy revenue gains because of dealership acquisitions.
But adding stores also can increase costs that reduce gross profit per new vehicle retailed.
“Often there are slightly elevated costs that come as we take on some of these new acquisition stores,” Group 1 CFO Daniel McHenry said in a call with investors April 24.
Others are focusing on growing their service and parts operations. AutoNation, Asbury and Penske, for example, are either experiencing or expect to experience gains in fixed operations revenue as they invest in growing that side of their business.
Here are Q1 company results.
Asbury
Net income: $147.1 million, down 19 percent from the first quarter of 2023
Revenue: A record $4.2 billion, up 17 percent
AutoNation
Net income: $190.1 million, versus $288 million from the same period last year
Revenue: $6.5 billion, up 1 percent from a year earlier
Group 1
Net income: $147.9 million, down 6.7 percent from the same period a year ago
Revenue: $4.5 billion, up 8.2 percent from 2023
Lithia
Net income: $165 million, down 28 percent from the first quarter of 2023
Revenue: $8.6 billion, up a record 23 percent from a year ago
Penske
Net income: $216.2 million, down from $299.6 million from the same period last year
Revenue: $7.45 billion, up 1.5 percent from a year earlier
Sonic
Net income: $42 million, down from $47.7 million the same period last year
Revenue: $3.4 billion, down 3 percent from the first quarter in 2023
/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js
Source: autonews.com