Sonic Automotive Reports Strong First Quarter 2025 Financial Performance
Sonic Automotive, one of the nation’s largest automotive retailers, has announced its financial results for the first quarter of 2025, revealing impressive growth across multiple segments. The company achieved record-breaking revenues and profits, driven by strong performance in both its EchoPark and Franchised Dealerships segments, while also making strides in its Powersports division.
First Quarter 2025 Financial Summary
- Total Revenues: Sonic Automotive reported record total revenues of $3.7 billion for the first quarter, marking an 8% increase compared to the same period last year.
- Gross Profit: The company achieved a total gross profit of $566.4 million, a 6% increase year-over-year.
- Net Income: Sonic reported a net income of $70.6 million, a significant 68% increase from the previous year. This translated to earnings of $2.04 per diluted share, a 70% increase from the prior year’s earnings. Notably, the first quarter of 2025 included several items that impacted the net income calculation. These included a $30.0 million pre-tax gain from cyber insurance proceeds, a $0.2 million gain on the sale of real estate, and several charges totaling $3.5 million for items such as impairments, disposals, and storm damage. The tax expense related to these items was $7.4 million.
- Adjusted Net Income: Excluding the aforementioned items, Sonic’s adjusted net income for Q1 2025 was $51.3 million, an 8% increase compared to the same period last year. Adjusted earnings per diluted share was $1.48, a 9% increase year-over-year.
- SG&A Expenses: Selling, general, and administrative expenses (SG&A) as a percentage of gross profit were 67.1%, with significant differences across segments. The Franchised Dealerships segment reported a 66.0% SG&A ratio, while EchoPark’s was 70.1%, and Powersports’ stood at 112.5%. Adjusted SG&A expenses as a percentage of gross profit were 72.1% overall.
EchoPark Segment
The EchoPark segment delivered record results in the first quarter of 2025, with revenues totaling $559.7 million, flat year-over-year. However, the gross profit for the segment hit an all-time high of $63.9 million, a 21% increase year-over-year. EchoPark’s retail used vehicle unit sales volume reached 18,798, up 5% from the previous year.
EchoPark’s reported income for the first quarter of 2025 was $10.3 million, a remarkable turnaround from a loss of $2.9 million in Q1 2024. This represents a 455% improvement year-over-year. The adjusted income for EchoPark also showed significant growth, reaching $10.1 million, a 677% increase compared to the same period last year.
Additionally, EchoPark recorded its highest-ever adjusted EBITDA of $15.8 million, an increase of 116% year-over-year. These strong results highlight the ongoing success of the EchoPark business model, as it continues to gain momentum in the used vehicle retail market.
Franchised Dealerships Segment
The Franchised Dealerships segment saw robust growth, with same-store revenues increasing by 8% and same-store gross profit rising by 3%. Retail new vehicle unit sales volume for the same stores grew by 10%, although gross profit per unit for new vehicles decreased by 17%, to $3,089. On the used vehicle side, same-store sales volume dropped by 2%, while gross profit per unit also declined by 3%, to $1,555.
One of the bright spots in this segment was the performance of Fixed Operations, which saw same-store gross profit growth of 7%. Within Fixed Operations, customer pay gross profit was up 2%, while warranty gross profit rose by 38%. The segment’s overall gross profit margin for Fixed Operations increased by 70 basis points, reaching 50.8%.
Finance and Insurance (F&I) gross profit in the Franchised Dealerships segment grew by 8%, with the F&I gross profit per retail unit rising by 4%, reaching $2,442.
As of March 31, 2025, Sonic’s Franchised Dealerships segment had 51 days’ supply of new vehicle inventory and 31 days’ supply of used vehicle inventory, indicating healthy inventory levels for continued sales.
Powersports Segment
Sonic’s Powersports segment showed promising growth, with first-quarter revenues totaling $34.4 million, up 24% year-over-year. Gross profit in this segment reached $8.5 million, a 9% increase from the previous year.
However, the Powersports segment still faced challenges, posting a segment loss of $3.5 million, which was a 52% increase from the $2.3 million loss reported in Q1 2024. Despite this, the adjusted EBITDA loss improved slightly, with a $0.7 million loss compared to $0.8 million in the prior year.
Sonic noted that investments in modernizing inventory management and marketing processes were beginning to bear fruit and would be crucial for the future success of this segment.
Dividend Declaration
Sonic Automotive’s Board of Directors declared a quarterly cash dividend of $0.35 per share, payable on July 15, 2025, to stockholders of record as of June 13, 2025. This dividend reflects the company’s strong financial performance and commitment to returning value to its shareholders.
Management Commentary
David Smith, Chairman and CEO of Sonic Automotive, expressed pride in the company’s performance during the first quarter. He highlighted the company’s ability to drive record revenues, new and used vehicle sales, and all-time record EBITDA in the EchoPark segment. Smith emphasized that Sonic would continue to focus on delivering an exceptional experience for customers and employees, growing EchoPark’s volume and profitability, and optimizing expenses to ensure long-term success.
“We remain focused on executing our strategy despite uncertainty surrounding tariffs, inventory levels, and consumer demand,” said Smith. “Our team’s efforts will continue to create long-term value for our stakeholders as we navigate these challenges.”
Jeff Dyke, President of Sonic Automotive, also praised the performance of the Franchised Dealerships segment, which generated record revenues and profits. He noted the success of the EchoPark team, which achieved significant growth in key financial metrics, and highlighted the ongoing efforts to modernize inventory and marketing in the Powersports segment.
Heath Byrd, CFO of Sonic Automotive, provided an update on the company’s liquidity. As of March 31, 2025, Sonic had approximately $430 million in cash and floor plan deposits, with total liquidity of approximately $947 million, excluding unencumbered real estate. Despite the uncertainties caused by tariffs, Byrd expressed confidence in Sonic’s ability to deploy capital strategically to grow revenue and enhance shareholder returns.
Updated 2025 Guidance
Sonic has updated or withdrawn certain items in its previous financial guidance for 2025, reflecting ongoing uncertainties in the automotive industry. The company remains focused on executing its strategy and managing the impact of external factors such as tariffs, inventory constraints, and shifting consumer demand.
Sonic Automotive’s first-quarter results for 2025 demonstrate the company’s strong market position and continued growth across key segments. With record revenues, profits, and EBITDA, Sonic is well-positioned to continue its success throughout the year, driving value for its customers, employees, and shareholders. The company’s focus on operational excellence, innovation in the EchoPark segment, and strategic capital deployment provide a solid foundation for future growth.
