Sonic Automotive sure enjoyed a record-setting first quarter as the dealer group reported six different new milestones as a part of its latest financial statement released earlier this week.
Sonic said it posted new highs within six different metrics, including a trio related to its used-vehicle and F&I departments.
Starting from the top, the dealer group reported record first quarter revenue and gross profit of $2.4 billion and $352.5 million, respectively.
Next, Sonic set an all-time record quarterly pre-owned retail unit sales high, turning 33,739 units.
Then, the company highlighted an all-time record for quarterly F&I gross profit per retail unit of $1,490. That pace led to a record first quarter F&I gross of $93.7 million.
Furthermore, Sonic said it generated record first-quarter fixed operations gross profit of $169.6 million.
While all the high marks made for a great headline, Sonic did experience some challenges during Q1.
The dealer group watched gross profit per used vehicle retailed softened by $254 year-over-year to settle at $1,090.
On the new-model side, retail sales dipped by 3.3 percent to 29,500 vehicles. Sonic managed to keep its gross on those new-car turns nearly steady year-over-year as that figure softened by just $14 to $1,925.
When Sonic had to wholesale a vehicle during the first quarter, the company sustained some significant year-over-year setback.
Sonic deployed 9,680 vehicles to its wholesale channels in Q1, a 16.5-percent jump from a year earlier. The losses the company took on those units spiked 224 percent from $141 in Q1 of last year to $457 this past quarter.
“We shifted our strategy during the quarter related to the number of used vehicle inventory we are carrying,” Sonic chief financial officer Heath Byrd said in a news release.
“The decline in used gross per unit and the increase in wholesale loss resulted from us aggressively disposing of units to reduce our overall days’ supply of used vehicles,” Byrd continued.
“Additionally, we believe we found a good compromise between volume and gross for new vehicles and we were able to grow both fixed operations and F&I gross profit compared to the first quarter of 2017,” he added.
Byrd also touched on Sonic’s overall performance as well as the ongoing initiative in the used-vehicle space — EchoPark.
“The first quarter met our internal earnings expectations and we remain confident with our full year earnings guidance,” Byrd said.
“We remain committed to growing our franchise store operations and our EchoPark brand,” he continued.
“In addition to our dividend of $0.06 per share distributed during the first quarter, we continue to honor our commitment to return capital to shareholders as we repurchased approximately 1.2 million shares of our common stock for approximately $23.4 million,” Byrd went on to say.