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Sonic Automotive Inc Class A SAH Stock Quote

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Sonic Automotive's Third Quarter Solid and Used Vehicle Improvement Likely Coming in 2023

Analyst Note

| David Whiston, CFA, CPA, CFE |

Sonic Automotive’s third quarter results looked mostly solid to us and give us no reason to change our fair value estimate. Diluted EPS of $2.23 rose 13.8% year over year and include about a $3 million impact from Hurricane Ian, though Sonic’s Florida stores did not incur severe damage. The EPS did miss the Refinitiv consensus of $2.47 probably due to the hurricane and mostly we think from consensus not able to correctly gauge the impact of expensive used vehicle procurement costs at auction impacting both franchise stores and the EchoPark standalone used vehicle stores. Franchise used vehicle gross profit fell by 9% while EchoPark suffered its sixth straight quarterly pretax loss, this one for $29 million. Total company liquidity seems adequate to us to handle a downturn at $488 million, though $245.2 million of share repurchases this year have lowered that figure from $702.8 million at year end.

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Key Statistics SAH

Company Profile SAH

Business Description

Sonic Automotive is one of the largest auto dealership groups in the United States. The company has 111 franchised stores in 18 states, primarily in metropolitan areas in California, Texas, and the Southeast, plus 50 EchoPark and Northwest Motorsport brand used-vehicle stores. In addition to new- and used-vehicle sales, the company derives revenue from parts and collision repair, finance, insurance, and wholesale auctions. Luxury and import dealerships make up about 88% of new-vehicle revenue, while Honda, BMW, Mercedes, and Toyota constitute about 60% of new-vehicle revenue. BMW is the largest brand at over 26%. 2021's revenue was $12.4 billion, with EchoPark's portion totaling $2.3 billion. Sonic bought RFJ Auto in December 2021, which added $3.2 billion in sales.

4401 Colwick Road
Charlotte, NC, 28211
T +1 704 566-2400
Industry Auto & Truck Dealerships
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 10,200

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