Charlotte-based Sonic Automotive reported first-quarter earnings that missed analysts’ expectations as the company ramped up spending on a new chain of dealerships and a new customer service technology platform.
For the three months that ended March 31, Sonic reported net income of $18.8 million, or 37 cents a share. The consensus estimate of Bloomberg-surveyed analysts was 38 cents a share. For the first quarter of 2014, Sonic reported earnings of $20 million, or 38 cents a share.
Sonic said included in its first-quarter profits are pretax expenses of $4.9 million, or 6 cents a share, related to spending on a new chain of stand-alone used-car dealerships called EchoPark, which rolled out in Denver in November. There are now three EchoPark locations in Denver and another is slated to open by the end of 2015, Sonic said.
Another expense that cut into earnings, Sonic said, was the $3.8 million, or 5 cents a share, related to its One Sonic-One Experience initiative, a guest-service technology that was launched in Charlotte last year and aims to streamline the car-buying process. All of its Charlotte stores now have migrated to the platform.
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“We are very pleased with how our associates and customers are embracing the technologies and improved transaction processes. Although there is still a lot of work to be done to ensure the long-term sustainability of these initiatives, the cornerstones have been set and we look forward to building upon these in the future,” Scott Smith, Sonic’s president, said in a statement.
The company’s first-quarter sales rose to $2.24 billion, in line with Wall Street estimates.
In the first quarter, Sonic , one of the largest Fortune 500 car dealers in the U.S., also reported a record number of new and pre-owned vehicles sold – 31,334 and 28,135, respectively.
Sonic also reported that its board approved a quarterly dividend of $0.025 per share payable for stockholders of record on June 15, 2015. The dividend will be payable on July 15.