AutoNation (AN) Q1 2023 earnings summary

Executive summary

• Q3 2023 revenue rose 3% YoY to $6.89B as new-vehicle and After-Sales growth offset lower used-vehicle revenue; operating income fell 20% and net income fell 31%.

• Double-digit new-vehicle sales growth and sequential used-vehicle volume growth drove the first YoY increase in total retail units in eight quarters; After-Sales delivered record revenue and gross profit.

Financial highlights

• Q3 revenue was $6.89B, up 3% YoY; gross profit was $1.29B, down 1%; operating income was $419.5M, down 20%; net income was $243.7M, down 31%.

• Q3 diluted EPS was $5.54, down 12% YoY; adjusted EPS was $5.54 versus $6.00 a year earlier, excluding $0.31 of favorable prior-year items.

• 9M revenue was $20.18B, down 1% YoY; operating income fell 19% to $1.30B, net income fell 26% to $804.9M, and diluted EPS was $17.65 versus $18.52.

• 9M adjusted operating income fell 15% to $1.32B, adjusted net income fell 24% to $817.3M, and adjusted diluted EPS was $17.92 versus $18.23.

Segment performance

• Domestic Q3 revenue was $1.98B, down $49M YoY; segment income fell to $107M from $143M.

• Import Q3 revenue was $2.08B, up $202M YoY; segment income fell to $165M from $180M.

• Premium Luxury Q3 revenue was $2.52B, up $10M YoY; segment income fell to $193M from $235M.

• After-Sales Q3 revenue increased 12% to $1.2B; gross profit reached a record $546M, up 14% YoY.

• New-vehicle revenue increased 11% to $3.2B; used-vehicle revenue fell 10% to $2.2B; Customer Financial Services revenue rose 2% to $370M.