Sonic Automotive (NYSE:SAH) Releases Quarterly Earnings Results, Misses Expectations By $0.36 EPS

Sonic Automotive (NYSE:SAH) announced its quarterly earnings data on Thursday. The company reported $1.30 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.66 by ($0.36), Zacks reports. The company had revenue of $3.99 billion during the quarter, compared to analyst estimates of $4.03 billion. Sonic Automotive had a net margin of 1.33% and a return on equity of 20.23%. The firm’s revenue was up .4% on a year-over-year basis. During the same quarter in the previous year, the business posted $1.41 earnings per share.

Here are the key takeaways from Sonic Automotive’s conference call:

• Record quarterly results: Sonic Automotive reported record revenue of $4.0 billion and gross profit of $617.5 million, with adjusted EPS of $1.30. Management maintained its full-year SG&A guidance despite near-term cost pressure.
• Franchise dealerships remained resilient: Same-store new-vehicle volume fell 7%, partly due to difficult comparisons from last year’s EV demand pull-forward, but new-vehicle GPU held at $3,000 and market share was maintained. Used-vehicle volume rose 3%, while fixed-operations gross profit increased 1% amid affordability challenges.
• EchoPark delivered strong volume growth: Revenue increased 14% and used-vehicle retail volume rose 22%, supported by improved sourcing and consumer demand. Sonic plans to open an Orlando location in December and invest $5 million to $7 million in fourth-quarter brand marketing, although that spending is expected to limit EchoPark adjusted EBITDA to $2 million-$4 million.
• Powersports continued its rapid expansion: Revenue grew 35% to a quarterly record of $113.7 million, with reported new and used retail unit volumes increasing 32% and 35%, respectively. Management said it sees continued acquisition and operational growth opportunities in the segment.
• Capital allocation remains flexible: Sonic ended the quarter with approximately $585 million of available liquidity, including $201 million of cash and floor-plan deposits, and announced a quarterly dividend of $0.41 per share. Management is weighing share repurchases under its remaining $528 million authorization against acquisition opportunities.

Sonic Automotive Stock Down 1.1%

Sonic Automotive stock opened at $62.92 on Friday. The stock has a market cap of $1.99 billion, a PE ratio of 10.12, a P/E/G ratio of 1.21 and a beta of 0.92. The company has a debt-to-equity ratio of 1.88, a current ratio of 1.01 and a quick ratio of 0.25. The stock’s fifty day moving average is $67.83 and its two-hundred day moving average is $73.09. Sonic Automotive has a 1-year low of $54.11 and a 1-year high of $113.67.

Sonic Automotive Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, January 15th. Shareholders of record on Tuesday, December 15th will be paid a $0.41 dividend. The ex-dividend date is Tuesday, December 15th. This represents a $1.64 dividend on an annualized basis and a yield of 2.6%. Sonic Automotive’s dividend payout ratio (DPR) is currently 26.37%.

Insider Activity

In other Sonic Automotive news, major shareholder Paul P. Rusnak acquired 27,756 shares of the company’s stock in a transaction dated Monday, October 5th. The shares were acquired at an average price of $59.76 per share, for a total transaction of $1,658,698.56. Following the acquisition, the insider owned 5,149,401 shares in the company, valued at $307,728,203.76. The trade was a 0.54% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Over the last ninety days, insiders bought 76,776 shares of company stock worth $4,584,694. Corporate insiders own 43.68% of the company’s stock.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on the company. Barclays reduced their price target on Sonic Automotive from $87.00 to $75.00 and set an “equal weight” rating on the stock in a research report on Tuesday, October 6th. Bank of America boosted their price objective on Sonic Automotive from $91.00 to $108.00 and gave the stock a “buy” rating in a research report on Thursday, July 9th. Citigroup upped their target price on shares of Sonic Automotive from $95.00 to $115.00 and gave the stock a “buy” rating in a research note on Monday, August 3rd. Stephens set a $89.00 target price on shares of Sonic Automotive in a report on Monday, July 13th. Finally, Weiss Ratings cut shares of Sonic Automotive from a “buy (b-)” rating to a “hold (c+)” rating in a report on Monday. Four investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and three have given a Sell rating to the stock. According to MarketBeat, the company has an average rating of “Hold” and a consensus target price of $84.75.

Key Headlines Impacting Sonic Automotive

Here are the key news stories impacting Sonic Automotive this week:

• Positive Sentiment: Needham & Company maintained a Buy rating and set a $96 price target, implying substantial upside from recent levels. However, the target was reduced from $139, signaling more cautious expectations. Needham analyst rating
• Positive Sentiment: Sonic Automotive declared a quarterly dividend of $0.41 per share, or $1.64 annualized, representing an approximately 2.6% yield. The dividend is payable January 15, 2027, to shareholders of record as of December 15, 2026. Dividend announcement
• Neutral Sentiment: The company expects EchoPark’s fourth-quarter adjusted EBITDA to be $2 million to $4 million while launching a $5 million to $7 million brand investment. The spending could support longer-term growth but may weigh on near-term profitability. EchoPark outlook
• Negative Sentiment: Third-quarter adjusted earnings were $1.30 per share, $0.36 below the $1.66 consensus estimate and down from $1.41 a year earlier. Revenue of $3.99 billion also fell short of the $4.03 billion estimate and grew only 0.4% year over year, weighing on investor sentiment. Third-quarter earnings miss

Sonic Automotive Company Profile

Sonic Automotive, Inc is a U.S.-based automotive retailer headquartered in Charlotte, North Carolina. The company operates franchised dealerships that sell new and pre-owned vehicles from a range of automobile manufacturers, along with related automotive products and services.

Its dealership operations provide vehicle financing and insurance products, maintenance and repair services, replacement parts, and collision-repair services. Sonic Automotive also operates EchoPark Automotive, a used-vehicle business focused on offering pre-owned vehicles and related finance and service products through dedicated retail locations.

Founded in 1997 by automotive entrepreneur O.