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Despite a double-digit percentage rise in used-vehicle sales at Sonic Automotive Inc.‘s EchoPark brand of used-only stores, the auto retailer’s net income fell by half in the first quarter on lower sales and gross profits on new and used vehicles at its franchised dealerships.
Sonic, of Charlotte, N.C., said net income plunged 51 percent to $47.7 million, while revenue increased 1 percent to $3.49 billion, a first-quarter record, the company noted.
Among its franchised dealerships, average gross profit per retail new vehicle fell 19 percent to $5,463. The average gross profit per used vehicle at its franchised dealerships slipped 6.1 percent to $1,626.
EchoPark’s first-quarter revenue rose 4.6 percent to $650.5 million, a first-quarter record. The used-vehicle-only business lost $46.8 million in the quarter, worse than its $35.3-million loss in the unit a year earlier.
“We are committed to EchoPark’s long-term earnings potential and remain focused on executing strategic enhancements to the business model in 2023 as we drive toward EchoPark’s expected return to profitability in 2024,” Sonic President Jeff Dyke said in a Thursday statement.
Sonic, which entered the powersports business last year and acquired several stores this year, said the new segment produced $34 million in revenue in the first quarter.
Q1 revenue: $3.49 billion, up 1 percent from a year earlier
Q1 net income: $47.7 million, down 51 percent from a year earlier
Q1 vehicle sales: Franchised dealerships sold 49,646 new and used retail vehicles, down 3.9 percent. On a same-store basis, volume of new and used retail vehicles at franchised stores fell 4.2 percent to 49,488 vehicles. EchoPark stores sold 19,980 used vehicles, soaring 34 percent. EchoPark’s volume jumped 27 percent on a same-market basis to 17,789 vehicles.
Q1 records: First-quarter revenue
Ranking: Sonic ranked No. 6 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S., with sales of 101,168 new vehicles in 2022.