Sonic Automotive (SAH) has reported record earnings, and confirmed it will open its latest EchoPark location in Atlanta. The company earned $1.04 per share, up 104% from the same quarter a year ago.
EchoPark revenue, Sonic’s expanding open, customer focused concept dealerships, came in at $308 million, up 52% from Q4 2018. The concept has been hitting on all cylinders. The company touts as its “guest experience” model.
It has become a central focus of expansion plans the company is executing. Sonic opened a new EchoPark in Long Beach, CA at the end of 2019, and confirmed a location for a new EchoPark in Atlanta last week.
Commenting on sales at the newly opened Long Beach location, CEO David Smith stated, “Upon opening, this location proceeded to sell over 450 vehicles within the first 45 days of operation. This is an excellent start and it speaks to the strength of our unique business model and the industry-leading guest experience our EchoPark stores provide.”
Total revenue for the company in Q4 was $2.7 billion, with a profit of $393.9 million. This compared to $2.6 billion, and revenue of $370.7 million in Q4 2018. EchoPark has made up a quickly growing part of revenue, but is still relatively small as a portion of overall revenue.
Strong revenue allowed the company to decrease debt by $238 million in 2019, well on the way to reaching their stated goal of reducing debt by $300 million midway through 2020.
Speaking to annual earnings for all of 2019, Smith noted, “Our 2019 performance was exceptional, with record breaking consolidated total revenues and earnings per diluted share from continuing operations. This was led by tremendous year over-year annual revenue growth of 66% at EchoPark, our specialty pre-owned vehicle stores, as well as strong performance from our franchised dealerships.”
While new vehicle volume was relatively flat for the year, growing at only 0.6%, used vehicle volume leapt higher, increasing 7.7%. On average, Sonic profited $2,083 per new vehicle sold, and $1,272, per used vehicle sold, in 2019. Parts, service and collision repair gross profit was up 6% in year-over-year 2019 numbers.
Smith said the company plans to open three new EchoPark locations in 2020, and that this earnings release marks the beginning of Sonic’s march to $20 billion in revenue by the end of this decade.
Steven Adams’s personal position in Sonic Automotive: none.
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