Not only did Sonic Automotive sell more used cars than it ever has before in a quarter, but the retailer also posted a record for first-quarter pre-owned gross profits.

Reporting Q1 results on Tuesday morning, Sonic said it sold 27,657 pre-owned vehicles during the period, an all-time high. This was up from 26,469 used sales in Q1 of 2013.

This tally also put the group at 90 used unit sales per store per month for the quarter. Sonic’s pre-owned gross profits came in at $40.7 million, a Q1 record.

“We have been very busy in the first quarter.  I'm happy with the progress we have made in both pre-owned and in our customer experience initiatives,” said Scott Smith, Sonic’s president. “We are very excited about the opening of our pre-owned stores in Denver expected in the fourth quarter 2014.  Our collection of highly skilled professionals, operational playbooks and state-of-the-art technology will provide us with a competitive advantage over others in this pre-owned space. 

“With our customer experience initiative (One-Sonic One-Experience), we intend on helping the retail automotive industry change toward the way current and future consumers want to shop for cars and trucks.  Our goal is to provide options to customers that are enjoyable, transparent and consistent with their lifestyles,” he continued.

Smith added: “We plan on beginning the roll out this new shopping experience to our customers in the Charlotte, N.C., market in the third quarter of 2014, and we will launch the customer experience initiative in other markets after the Charlotte rollout is complete.

“We would also like to reiterate our targeted range of diluted earnings per share from continuing operations for full year 2014 of $1.95 to $2.05.  This range includes an expected $0.14 per diluted share effect related to costs of our stand-alone pre-owned initiative.  Excluding the anticipated effects of this initiative, our targeted range of diluted earnings per share from continuing operations for full year 2014 is $2.09 to $2.19.”

Jeff Dyke, Sonic’s executive vice president of operations, also offered some commentary on the quarter.

 “We continue to demonstrate our ability to operate and grow in the pre-owned space at record levels. Compared to the prior year quarter, we were able to grow pre-owned unit sales by 4.5 percent and pre-owned gross profit by 7.0 percent,” he said. “In addition, our fixed operations teams were able to achieve record results despite the weather issues that plagued many of our southeastern stores during the quarter. 

“We achieved fixed operations revenue and gross profit growth over the prior year quarter of 7.5 percent and 5.5 percent, respectively.  While new retail unit volumes were relatively flat compared to the prior year quarter, we were able to increase our gross profit per unit to $2,191, up $58 per unit versus Q1 2013.  We continue to make progress on our One-Sonic One-Experience and stand-alone pre-owned store projects, which are all on track.  While the weather caused a slowdown in January and February, we still beat our internal forecast for Q1 2014, and we remain on track to achieve our EPS target for the full year.”

“We continue testing our True Price pricing methodology. This quarter we began to see two things happen: as the market grew stronger, our share stabilized, and we grew market share sequentially over the prior quarter, and we were able to grow new car margin by $58 per retail unit.  This marks the first time in over a year of adjusting our model that both share and margin grew together in the quarter,” Dyke added.

“As we move toward our One-Sonic One-Experience launch, we expect to gain significant market share as customers benefit from the entire complement of our new shopping experience.  Bottom line, when we fully implement One-Sonic One-Experience, we will offer the automobile buying community a shopping experience that no other competitor in our industry can offer, or will be able to offer, for several years to come,” he continued.