Sonic’s EchoPark used-vehicle sales nearly tripled, growing by 2,800 vehicles for the quarter.
Sonic Automotive Inc.’s fourth-quarter net income surged on gains related to federal corporate tax changes. Same-store gross profit grew in all operations except used vehicles.
Net income climbed 65 percent from a year earlier to $62 million, while revenue rose 4.3 percent to a record $2.67 billion, the nation’s fifth-largest dealership group said in a statement on Tuesday.
Net included a benefit of $24.8 million due to the change in federal tax rates.
Sonic’s EchoPark used-vehicle sales nearly tripled, growing by 2,800 vehicles for the quarter. That business model is “accelerating volume at a rapid pace,” Jeff Dyke, Sonic’s executive vice president of operations, said in a statement. “We expect our EchoPark brand to sell in the range of 25,000 cars in 2018, more than doubling 2017 volume.”
Dyke said EchoPark accounts for nearly 20 percent of Sonic’s used-vehicle sales volume and, “Given the volume increase we are experiencing with our model, we fully expect EchoPark to eclipse the volume we currently produce in our Sonic franchised dealerships over the next few years.”
Records: Gross profit rose 3.3 percent to a record $384.1 million; finance and insurance gross profit per retail unit rose 8.1 percent to a record $1,473.
Sales: New-vehicle sales rose 2.7 percent to 36,531; used-vehicle retail sales grew 7.2 percent to 31,740.
Same-store sales: New-vehicle sales shot up 4 percent to 36,305, outperforming the industry’s 1.8 percent drop in fourth-quarter U.S. light-vehicle sales.
For all of 2017, revenue rose 1.4 percent to a record $9.87 billion, while net income eased 0.2 percent to $93 million.
Sonic also raised its dividend one penny to 6 cents a share.
Sonic opened two more EchoPark stores in 2017 in San Antonio and will open a third there, along with two in Charlotte, N.C, and one in Houston, this year. It also will open “several” luxury-brand stores in Atlanta and Houston this year, CEO Scott Smith said in the statement.
Sonic, of Charlotte, ranks No. 5 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 134,288 new vehicles in 2016.