AutoNation (AN) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 results with total revenue up 3.2% to $6.69 billion, record aftersales gross profit, and robust new vehicle growth; adjusted EPS rose 4% to $4.68, while reported EPS declined 1% to $4.45.

• Same-store new vehicle unit sales rose 7% year-over-year, with premium luxury up 14%, domestic up 6%, and import up 2%; used vehicle gross profit up 12%-13%.

• AN Finance reached profitability ahead of expectations, with $460 million in originations, improved credit quality, and a shift to non-recourse funding.

• $225 million in share repurchases completed, reducing share count by 4%-7% year-over-year; two store acquisitions in Denver, CO, for $70 million added $220 million in annualized revenue.

• Record aftersales profits and strong performance in customer financial services contributed to overall profitability.

Financial highlights

• Total revenue was $6.7 billion, up 3%-4% year-over-year (4% same-store); gross profit rose 2% to $1.22 billion.

• Adjusted net income was $184 million, down 3% year-over-year; adjusted EPS rose 4% to $4.68 due to share repurchases.

• Adjusted free cash flow was $237 million, with cash flow conversion at 129% of adjusted net income.

• SG&A as a percentage of gross profit increased to 67.4%, up from 65.6% last year.

Outlook and guidance

• SG&A as a percentage of gross profit expected to remain in the 66%-67% range for the full year.

• Management expects continued moderation of new vehicle margins due to increased supply and potential tariff impacts.

• Guidance reaffirmed for continued capital deployment in share repurchases and accretive acquisitions.

• Aftersales business projected to grow mid-single digits annually.

• Tariff impacts expected to be cushioned by cross-shopping and OEM strategies, but ultimate impact remains uncertain.