2023-07-21 07:22:16 ET
AutoNation ( NYSE: AN ) reported new vehicle retail unit sales were down 8% in Q2 to 62,444 and used vehicle retail unit sales fell 11% to 68,812. Revenue was up 0.4% to $6.9B. The auto retailer noted consumer demand for personal vehicle ownership remains strong, and said it is meeting the demand through its sourcing capabilities, selection of vehicles, geographic footprint, digital tools, core efficiencies, and business expansions.
Operating income fell 21% during the quarter to $439.2M and adjusted EPS was down 3% to $6.29. SG&A as a percentage of gross profit was 61.9% on an adjusted basis, much lower than pre-pandemic levels but slightly higher than recent periods, reflecting investments in technology and new business initiatives.
"In addition, the strength of our balance sheet and robust cash flow enabled continued funding of investments and acquisitions while also returning significant capital to shareholders," noted AutoNation Chief Executive Officer Mike Manley on the quarter.
On the balance sheet, AutoNation ( AN ) ended the quarter with a liquidity position of $1.4B, including $64M in cash and approximately $1.3B of availability under its revolving credit facility. The retailer's covenant leverage ratio was 2.0X at quarter end. AutoNation ( AN ) had approximately $4.1B of non-vehicle debt outstanding at the end of the quarter. On July 18, AAN amended its unsecured credit agreement, increasing the revolving borrowing capacity by $100M to $1.9B and extending the maturity date to July 18, 2028.
Looking ahead, AutoNation ( AN ) backed its previous guidance range for FY23 revenue growth of +15% to +17% and EPS of $11.00 to $11.40 vs. $11.07 consensus.
Shares of AutoNation ( AN ) rose 1.28% premarket to $15.77.
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