Sonic Automotive Q2 Earnings Call Highlights

Sonic Automotive reported Q2 revenue of $3.9 billion, up 8% year over year, and record gross profit of $616.2 million. Adjusted earnings reached $1.82 per diluted share. EchoPark revenue rose 15% and retail volume increased 17%, while fixed-operations gross profit climbed 6% and accounted for more than 75% of total gross profit alongside F&I. Powersports revenue surged 53%, and Sonic raised its full-year new-vehicle gross-profit-per-unit outlook to $2,850–$3,000 while maintaining its fixed-operations and EchoPark targets.

Sonic Automotive NYSE: SAH reported record second-quarter revenue of $3.9 billion, up 8% from a year earlier, and all-time quarterly gross profit of $616.2 million, up 2%. Reported GAAP earnings were $1.79 per diluted share, while adjusted earnings were $1.82 per diluted share, Chairman and Chief Executive Officer David Smith said on the company’s second-quarter 2026 earnings call.

Smith said the company’s franchised dealerships, EchoPark used-vehicle business and Powersports operations all contributed to growth, while affordability pressures in the new-vehicle market continued to shape consumer demand and management’s operating strategy.

Franchised dealership revenue increased 6% to $3.3 billion, while same-store revenue rose 2%. Reported gross profit for the segment rose 1%, but same-store gross profit declined 3%, reflecting difficult comparisons against elevated demand ahead of tariffs in the second quarter of 2025.

New-vehicle gross profit per unit remained above the company’s previous full-year outlook. Sonic raised its full-year new-vehicle GPU guidance to between $2,850 and $3,000, from its earlier range of $2,700 to $3,000. Second-quarter reported new-vehicle GPU was $3,024, down 11% year over year, and same-store new-vehicle GPU was $2,872, down 16%.

President Jeff Dyke said the company has been willing to be more aggressive on front-end margins while maintaining inventory turnover, supporting unit volume and F&I results. Same-store new-vehicle volume was flat, in line with industry trends. Used-vehicle demand at franchised dealerships was stronger. Same-store retail used-vehicle volume increased 7%, as Sonic cited improving supply and its strategy to increase used-vehicle throughput. The company’s long-term objective is to average 100 used retail units per dealership per month, which it said represents about 25% organic volume growth potential from current levels.

Management said used-vehicle GPU could decline in the second half as it prioritizes volume and total gross-profit generation. Second-quarter reported used-vehicle GPU was $1,399, down 12%, while same-store used-vehicle GPU was $1,401, down 13%.

Fixed operations gross profit rose 6% to a quarterly record of $263.8 million. Same-store fixed operations gross profit increased 2%, including a 1% increase in customer-pay gross profit and a 3% increase in warranty gross profit. Franchise dealership F&I gross profit increased 2% to a second-quarter record of $147.9 million, though same-store F&I gross profit declined 1% as F&I gross profit per unit fell 4%. Fixed operations and F&I combined accounted for more than 75% of total gross profit during the quarter, Smith said.

Dyke described the industry’s fixed-operations growth as uneven in the second quarter and said Sonic is pursuing value pricing, marketing and improved customer awareness to capture service business from customers who do not return to dealerships for repairs. He said the company is focus...