Tariff clouds are starting to clear, as AutoNation sees new- and used-car sales climb

By James Rogers

The auto industry has largely navigated the tariff-sparked turbulence well, says AutoNation Chief Executive Mike Manley

Car seller AutoNation reported third-quarter results before market open Thursday.

Car seller AutoNation Inc. shrugged off tariff concerns as it topped Wall Street's expectations for third-quarter earnings and revenue, boosted by increased demand for both used and new cars.

Speaking during a conference call to discuss the results, Chief Executive Mike Manley said that, while the tariff story continues to evolve, the industry now has a better idea of the impact. "Most of the negotiations with major trading partners are nearing completion and the effects on the auto industry, I think, are becoming clearer," he added, according to a FactSet transcript.

The CEO acknowledged the "turbulence" brought by the tariffs agenda, but said that original equipment manufacturers, "have largely navigated it well."

The auto industry has been wrestling with the impact of the Trump administration's sweeping wave of tariffs announced earlier this year. But earlier this week, automaker General Motors Co. (GM) said that it doesn't expect tariff costs to be as high as was previously anticipated.

AutoNation painted a broadly positive picture of consumer demand in its third-quarter results. "Overall market conditions for new and used vehicles, we think, are reasonable and holding up well," Manley said.

The company said sales of new vehicles in the latest quarter increased to 65,425 units from 62,628 units in the same period last year, and sales of used vehicles increased to 67,288 units from 65,688 units. AutoNation's new-vehicle revenue rose 7% to $3.4 billion and used-vehicle revenue increased 5% to $2 billion.

The results mark a stark contrast to rival CarMax Inc. (KMX), which saw a surprise drop in used-car sales when it reported second-quarter results last month.

AutoNation's total revenue rose 7% to $7.04 billion. Analysts surveyed by FactSet were looking for revenue of $6.86 billion. The results marked AutoNation's fourth consecutive revenue beat, according to FactSet data.

Adjusted earnings, which exclude nonrecurring items, were $5.01 a share, up from $4.02 a year ago and above the FactSet consensus estimate of $4.82 a share. The adjusted earnings result also marked the fourth consecutive quarter that AutoNation has beaten the FactSet consensus estimate.

The company's net income rose 16% to $215.1 million from $185.8 million in the prior year's quarter.

If there was a negative to the quarter, CEO Manley said profitability on new vehicles "moderated" during the quarter, given that the mix of sales was more heavily weighted to battery-electric and domestic vehicles. He also said sales growth for the fourth quarter "will probably get tougher" given the strength seen a year ago, before tariff uncertainties kicked in.

The company also had a high bar to clear for investors, as the stock has run up 24% in 2025, compared with the 47.6% drop in CarMax shares and the 14.3% gain in the S&P 500 index SPX.

AutoNation's stock fell 2.7% in morning trading, which would be a two-month low.

Prices for new cars have been rising consistently for more than a year, according to Kelley Blue Book, lifted by tariffs, luxury shoppers, and a rush to buy electric vehicles before the recent expiration of the EV tax credit. However, EV maker Tesla Inc. (TSLA) reported late Wednesday lower-than-expected profit in its third-quarter results.

Steve Gelsi and William Gavin contributed.

-James Rogers

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10-23-25 1122ET