Winter chills Sonic Automotive’s profits
04/22/2014 3:37 PM
04/22/2014 3:39 PM
Sonic Automotive’s profits dipped in the first quarter, the Charlotte company said during an earnings call Tuesday, as cold weather kept consumers at home.
Sonic’s revenue rose about 3 percent, to just over $2.1 billion, during the quarter ending March 31.
But the auto dealer’s profits slipped nearly 9 percent compared with the same quarter a year ago, from $21 million to $19 million.
The company attributed some of the dip in profits to the winter storms that swept much of the southeast in January and February this year.
The Fortune 500 company, one of the nation’s largest auto dealers, sold more than 31,000 new cars in the first quarter of 2014.
That’s about 3 percent fewer than the number of new cars sold during the first quarter last year.
Used-car sales during the first quarter this year increased by more than 4 percent, with 27,700 sold in the first quarter of 2014, compared to 26,500 sold during the same quarter in 2013.
Sonic plans to open its first stand-alone used-car dealership later this year in Denver. Sonic executives have been building a plan to enter the stand-alone pre-owned market – currently dominated by used-car giant CarMax – for more than five years.
The stand-alone used-car business will operate independently of Sonic’s existing new and pre-owned dealership sales operations.
Executives said the company is still focused on moving dealerships toward Sonic’s new “True Price” structure. The program is designed to eliminate haggling over a price.
The dealerships are also being trained in the new “One Sonic-One Experience” initiative.
It will allow customers to complete their purchase with one salesperson, using Apple products to complete sales. Executives say the program can drastically decrease the amount of time a customer has to spend on paperwork.
The company plans to roll out this new shopping experience at its Charlotte locations first, beginning in the third quarter of 2014.
Shares of Sonic rose 94 cents Tuesday, about 4 percent, to close at $24.08.
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