Sonic Automotive (NYSE:SAH) Posts Quarterly Earnings Results

Sonic Automotive (NYSE:SAH) released its quarterly earnings data on Thursday. The company reported $1.30 EPS for the quarter, missing analysts’ consensus estimates of $1.66 by ($0.36), Zacks reports. Sonic Automotive had a return on equity of 20.75% and a net margin of 1.37%. The company had revenue of $3.99 billion for the quarter, compared to analysts’ expectations of $4.03 billion. During the same period in the prior year, the firm posted $1.41 EPS. The firm’s quarterly revenue was up .4% on a year-over-year basis.

Here are the key takeaways from Sonic Automotive’s conference call:

• Record quarterly results: Sonic Automotive reported record revenue of $4.0 billion and gross profit of $617.5 million, with adjusted EPS of $1.30. Management maintained its full-year SG&A guidance despite near-term cost pressure.
• Franchise dealerships remained resilient: Same-store new-vehicle volume fell 7%, partly due to difficult comparisons from last year’s EV demand pull-forward, but new-vehicle GPU held at $3,000 and market share was maintained. Used-vehicle volume rose 3%, while fixed-operations gross profit increased 1% amid affordability challenges.
• EchoPark delivered strong volume growth: Revenue increased 14% and used-vehicle retail volume rose 22%, supported by improved sourcing and consumer demand. Sonic plans to open an Orlando location in December and invest $5 million to $7 million in fourth-quarter brand marketing, although that spending is expected to limit EchoPark adjusted EBITDA to $2 million-$4 million.
• Powersports continued its rapid expansion: Revenue grew 35% to a quarterly record of $113.7 million, with reported new and used retail unit volumes increasing 32% and 35%, respectively. Management said it sees continued acquisition and operational growth opportunities in the segment.
• Capital allocation remains flexible: Sonic ended the quarter with approximately $585 million of available liquidity, including $201 million of cash and floor-plan deposits, and announced a quarterly dividend of $0.41 per share. Management is weighing share repurchases under its remaining $528 million authorization against acquisition opportunities.

Sonic Automotive Stock Up 0.6%

Shares of Sonic Automotive stock opened at $63.48 on Friday. Sonic Automotive has a 12 month low of $54.11 and a 12 month high of $113.67. The business has a fifty day simple moving average of $68.13 and a 200 day simple moving average of $73.09. The company has a quick ratio of 0.25, a current ratio of 1.01 and a debt-to-equity ratio of 1.88. The stock has a market cap of $2.01 billion, a PE ratio of 10.12, a price-to-earnings-growth ratio of 1.20 and a beta of 0.92.

Sonic Automotive Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, January 15th. Stockholders of record on Tuesday, December 15th will be given a $0.41 dividend. This represents a $1.64 annualized dividend and a dividend yield of 2.6%. The ex-dividend date is Tuesday, December 15th. Sonic Automotive’s dividend payout ratio (DPR) is currently 26.16%.

Key Stories Impacting Sonic Automotive

Here are the key news stories impacting Sonic Automotive this week:

• Positive Sentiment: Sonic Automotive declared a quarterly dividend of $0.41 per share, payable January 15, 2027, to shareholders of record on December 15. The annualized dividend is $1.64 per share, representing an approximately 2.6% yield and signaling continued shareholder returns. Dividend announcement
• Neutral Sentiment: Third-quarter revenue was $3.99 billion, up just 0.4% year over year but slightly below the $4.03 billion analyst consensus. Investors may view the limited growth as evidence of a challenging automotive retail environment. Third-quarter earnings results
• Negative Sentiment: Adjusted earnings came in at $1.30 per share, missing the $1.66 consensus estimate by $0.36 and declining from $1.41 in the prior-year quarter. The larger-than-expected earnings miss is the main reason the stock has decreased and prompted reports highlighting the post-earnings decline. Q3 earnings miss
• Negative Sentiment: Profitability remains relatively thin, with a reported 1.37% net margin. Combined with revenue growth of less than 1% and the earnings decline, this may reinforce concerns about margin pressure and near-term operating performance. Shares fall after Q3 miss

Insider Buying and Selling at Sonic Automotive

In other news, major shareholder Paul P. Rusnak acquired 12,555 shares of Sonic Automotive stock in a transaction that occurred on Wednesday, October 14th. The shares were acquired at an average price of $59.90 per share, with a total value of $752,044.50. Following the purchase, the insider directly owned 5,176,776 shares of the company’s stock, valued at $310,088,882.40. The trade was a 0.24% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. In the last 90 days, insiders have purchased 76,776 shares of company stock valued at $4,584,694. Company insiders own 43.68% of the company’s stock.

Analyst Upgrades and Downgrades

Several brokerages have commented on SAH. JPMorgan Chase & Co. dropped their price target on shares of Sonic Automotive from $72.00 to $64.00 and set an “underweight” rating on the stock in a research note on Tuesday, October 6th. Weiss Ratings lowered Sonic Automotive from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Monday. Citigroup increased their price target on Sonic Automotive from $95.00 to $115.00 and gave the stock a “buy” rating in a research note on Monday, August 3rd. Morgan Stanley cut their price objective on shares of Sonic Automotive from $72.00 to $57.00 and set an “underweight” rating on the stock in a research note on Monday, October 5th. Finally, Barclays decreased their target price on shares of Sonic Automotive from $87.00 to $75.00 and set an “equal weight” rating for the company in a research report on Tuesday, October 6th. Four research analysts have rated the stock with a Buy rating, three have given a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of “Hold” and an average price target of $84.75.

About Sonic Automotive

Sonic Automotive, Inc is a U.S.-based automotive retailer headquartered in Charlotte, North Carolina. The company operates franchised dealerships that sell new and pre-owned vehicles from a range of automobile manufacturers, along with related automotive products and services.

Its dealership operations provide vehicle financing and insurance products, maintenance and repair services, replacement parts, and collision-repair services. Sonic Automotive also operates EchoPark Automotive, a used-vehicle business focused on offering pre-owned vehicles and related finance and service products through dedicated retail locations.

Founded in 1997 by automotive entrepreneur O.