Sonic Automotive Q2 revenue beats estimates on powesports segment growth

Overview

• U.S. auto retailer's Q2 revenue rose 8% yr/yr, beating analyst expectations

• Adjusted EPS fell 17% yr/yr; net income rose sharply from prior year

• Company completed previously announced Harley-Davidson dealership acquisitions, adding $100 mln in annualized revenue

Outlook

• Company expects EchoPark footprint expansion to begin in fourth quarter 2026

• Sonic expects recent Harley-Davidson acquisitions to add about $100 mln in annualized revenue

• Company says liquidity position allows flexibility for growth investments and capital returns

Result Drivers

• ECHO PARK VOLUME - EchoPark segment retail used vehicle unit sales rose 17% yr/yr, driving record segment gross profit, though per-unit profitability declined

• FRANCHISED DEALERSHIPS MARGIN PRESSURE - Same store retail new and used vehicle gross profit per unit declined 16% and 13% yr/yr, respectively, amid flat new vehicle sales and a challenging consumer affordability backdrop

• POWESPORTS SEGMENT GROWTH - Powersports segment achieved record Q2 revenue and gross profit, supported by recent Harley-Davidson dealership acquisitions

Company press release: ID:nBwbyZJXsa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts service retailers peer group is "buy"

• Wall Street's median 12-month price target for Sonic Automotive Inc is $89.30, about 20.7% below its July 29 closing price of $112.66

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• July 30 - Group 1 Automotive Q2 revenue misses on consumer affordability

• July 28 - Asbury Automotive Q2 adjusted EPS beats estimates on used vehicle profitability

• July 29 - Lithia Driveway Q2 revenue beats estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)