While gross profit for new and used vehicles sold declined for Penske Automotive Group, profits increased for the other top four largest publicly traded dealerships. Penske did see sales volumes increase for total revenue and same-store, and in the end, sales were profitable with operating income increasing over 14% during the quarter.
Overall, it was a strong quarter for dealer performance. Here’s an overview from their earnings reports……..
Revenue went up 9% in the third quarter over the same period one year earlier — $5.4 billion versus $4.9 billion a year ago. Each sector of the business saw improvements — new vehicles, used vehicles, parts and service, and finance and insurance. Net income from operations went up to $119 million from $107 million in Q3 2014 – a 17% improvement on a per-share basis. AutoNation’s retail new vehicle unit sales increased 7% overall and 5% on a same-store basis. AutoNation said its used car business should normalize in the first half of 2016, and that it would be adding used car inventory to offset the impact of the recalls.
Penske Automotive Group
Total revenue increased 12.8% to $5.0 billion while same-store retail revenue increased 5.2%. Total revenue increased 16.9%, and same-store retail revenue increased 8.5%. Operating income increased 14.1% to $146.0 million. The company sold 51,031 used vehicles compared with 47,363 a year earlier. Gross profit dropped for new and used vehicles sold. On a same-store basis, Penske sold 59,769 new vehicles compared with 57,066 in the third quarter of 2014; and 49,495 used vehicles vs. 47,363. Gross profit per new vehicle sold dropped to $2,908 from $3,005 and used fell to $1,685 from $1,807.
CarMax reported that net sales and operating revenues increased 7.9% to $3.88 billion in its second quarter ending Aug. 31, 2015. Used unit sales in comparable stores increased 4.6%, and total used unit sales rose 9.2%. Used vehicle sales growth remained strong, with total used vehicle unit sales climbing 12.4%. Used vehicle gross profit rose 12.7%, driven by the increase in total used unit sales. Used vehicle gross profit per unit was relatively flat at $2,166 compared with $2,173 in the corresponding prior year period.
Group 1 Automotive
The dealership reported record third-quarter earnings as the company posted annual gains in new and used vehicle sales. Group 1 reported a net quarterly income of $46 million, up 15.7 percent compared to one year ago. New vehicle retail sales increased 5.3% to $1.6 billion, and used vehicle retail sales increased 11.6% to $687.6 million.
Used vehicle retail revenue increased 11.6%, coming from 12.9% higher used retail unit sales.
Sonic Automotive, Inc.
Sonic Automotive’s revenue in the third quarter rose 5.9% year over year to $2.49 billion with new vehicles improving 3% to $1.37 billion, and used vehicles increased 11.7% to $652.1 million. The company reported net operating income of $27.1 million, an increase of 10% from $24.6 million a year earlier. Sonic Automotive is optimistic about its EchoPark used vehicle retail stores. EchoPark stores retail sales increased 4.4% sequentially to 920 units. The company will open two additional stores in the Denver market in the first half of 2016.