Profits soared at Sonic Automotive Inc. in the second quarter, driven by record-high used-vehicle sales and fatter finance and insurance profits.
Net income from continuing operations jumped 57 percent to $26.8 million for the nation's fifth-largest U.S. dealership group, while revenue rose 4.3 percent to $2.6 billion.
Driving much of the used-vehicle sales growth was Sonic's EchoPark brand of standalone used-vehicle stores, where sales leapt 69 percent to 12,587. Revenue climbed 62 percent to $291.7 million for EchoPark.
Sonic CEO David Smith said Thursday that Sonic plans to open four more EchoPark locations by this time next year — one location before the end of 2019, another in the first half of 2020, and two additional stores in the second half of 2020. There are currently eight EchoPark stores — four locations in Texas, three in Colorado, and one in North Carolina.
"Our franchised stores posted very good results across all revenue lines and our EchoPark operations continued on the growth and profitability path experienced in the prior quarter," Smith said in a statement. "We are confident that this momentum will carry into the second half of the year."
Sonic shares gained 4 percent to close Thursday's trading at $27.06.
Records: Consolidated used-vehicle sales, F&I gross profit and F&I gross profit per unit.
Sales: New-vehicle sales slipped 8.7 percent, or 2,681, to 28,196. Used-vehicle sales rose 16 percent to 41,458.
Same-store sales: New-vehicle sales on a same-store basis slid 2.4 percent to 28,134. That compares with a 1.7 percent drop in new light-vehicle sales for the U.S. industry during the second quarter, according to the Automotive News Data Center. Used-vehicle sales on a same-store basis increased 13.5 to 38,517, which includes sales from EchoPark locations.
Sonic, of Charlotte, N.C., ranks No. 5 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 122,717 new vehicles in 2018. It retailed 139,605 used vehicles for the same period, ranking it No. 6 on Automotive News' list of the top 100 dealership groups in used-vehicle sales.
