Auto retail giant AutoNation Inc. set an all-time record for same-store finance and insurance gross profit per vehicle, while it posted gross profit jumps in all business sectors despite a pull-back in new-vehicle sales.
That all helped AutoNation’s fourth-quarter net income soar.
Revenue for the nation’s largest new-vehicle retailer grew 2.5 percent to $5.55 billion. AutoNation said Tuesday that net income from continuing operations jumped 70 percent to $158 million.
CEO Cheryl Miller told Automotive News that AutoNation benefited from strength across all of its business areas and from the buying public during the quarter.
“You had low unemployment. You had three Federal Reserve cuts last year. And it really supported demand,” Miller said. “In addition to that we executed well.”
The quarter included $20 million in gains from the sale of two dealerships and properties and a $19 million non-cash gain in its Vroom investment following a recent valuation of the online used-vehicle retailer. In fall 2018, AutoNation invested $50 million into Vroom for a roughly 7 percent stake in the company.
In the quarter a year earlier, AutoNation had $13 million in gains from store and property sales and $7 million in charges related to its $50 million restructuring plan.
While new-vehicle revenue dipped 1.3 percent, AutoNation had gains in used-vehicle, parts and service and F&I revenue. For the third straight quarter, the company’s five standalone AutoNation USA used-vehicle stores broke even, Miller said.
AutoNation also saw income growth from each of its three business segments: domestic, import and premium luxury. Same-store revenue rose 3.9 percent to $5.49 billion, while same-store gross profit jumped 6.8 percent to $886.4 million.
Last week, AutoNation appointed Lisa Lutoff-Perlo to its board of directors, expanding the board to 10 members. Lutoff-Perlo has been CEO of Celebrity Cruises since December 2014.
AutoNation stock was up more than 10 percent in premarket trading Tuesday to $48.30 a share.
Records: All-time record same-store F&I gross profit per vehicle of $1,989 and fourth-quarter and full-year earnings per share from continuing operations of $1.74 and $4.98, respectively.
Sales: New-vehicle sales fell 5.1 percent to 74,383 units. Used-vehicle sales jumped 7.3 percent to 59,022. Fourth-quarter new light-vehicle sales across the nation fell 1.8 percent, according to the Automotive News Data Center.
Same-store sales: New-vehicle sales on a same-store basis dipped 3.1 percent to 73,613. Used-vehicle sales on a same-store basis increased 9.8 percent to 58,467.
Full-year results: In 2019, revenue was nearly flat at $21.3 billion compared to $21.4 billion. Net income from continuing operations rose 14 percent to $451 million.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 310,839 new vehicles in 2018. It retailed 237,722 used vehicles for the same period, ranking it No. 3 on Automotive News’ list of the top 100 dealership groups in used-vehicle sales.