AutoNation (AN) Q3 2022 earnings summary

Executive summary

• Q3 GAAP diluted EPS set a third-quarter record at $6.31, up 23% YoY; adjusted diluted EPS was $6.00, up 17%.

• Revenue rose 4% YoY to $6.666B and operating income rose 4% to $522.5M, despite lower new and used retail unit sales.

• After-Sales gross profit increased 13% to $479M; Customer Financial Services gross profit per vehicle retailed reached a record $2,755.

Financial highlights

• Q3 gross profit was $1.313B, up 3% YoY; net income was $352.6M, down 3%, and adjusted net income was $335.6M, down 7%.

• New vehicle revenue increased 4% to $2.9B, used vehicle revenue increased 3% to $2.4B, After-Sales revenue rose 9% to $1.0B, and financial services revenue rose 3% to $361M.

• 9M revenue increased 5% to $20.288B, operating income rose 17% to $1.600B, net income increased 11% to $1.091B, and diluted EPS rose 47% to $18.52.

• Q3 retail unit sales declined 5% YoY for new vehicles to 55,565 and 3% for used vehicles to 75,355.

Outlook and guidance

• Moreland Auto Group acquisition of four dealerships and nine franchises, representing ~$320M in annual revenue, was expected to close in Q4 2022, subject to customary conditions and manufacturer approval.

• Long-term AutoNation USA goal remained more than 130 stores; two dozen facilities were in development, while new-store openings faced construction-market challenges.