Sonic Automotive (NYSE:SAH) shares slipped just before the market open after missing consensus expectations for Q1.
The North Carolina-based auto dealer reported $1.33 for the first quarter, well below the consensus expectation at $1.83. Meanwhile, a 1.3% rise in revenue year over year to $3.5B was not enough to clear the bar set by analysts.
Management noted a 1% decline in same store retail new vehicle unit sales and an 8% drop in retail used vehicle sales. Gross profit per unit for new and used vehicles were down 17% and 12%, respectively, as auto prices came down from 2022 peaks.
“Despite ongoing challenges in the automotive retail industry, including rising interest rates and vehicle affordability concerns, we remain focused on delivering an exceptional guest experience and executing our long-term strategic plan,” CEO David Smith said. “We are excited about the prospects for our core franchised dealerships business, and the growth opportunities at EchoPark and our growing powersports business, as we leverage our diversified portfolio to maximize future earnings potential.”
CFO Heath Byrd added that the company is laser-focused on “disciplined, return-based capital allocation in the face of an uncertain macroeconomic outlook.” Based upon the strong capital position, the company moved to increase its quarterly dividend by 3.6%.
Shares of Sonic Automotive (SAH) slid 4.16% shortly before Thursday’s market open.
Dig into the details of the quarterly report.