Q2 2024 AutoNation Inc Earnings Call Transcript
Key Points
- New unit sales increased by 5% in April and May.
- Margins for new vehicles are stabilizing, with a modest decline in the second quarter.
- Customer Financial Services (CFS) continued to deliver strong performance, with AutoNation Finance originating over $240 million in loans during the quarter.
- After sales delivered a positive mix shift, resulting in a year-over-year 60 basis point increase in gross margin to 48%.
- The company increased its technician workforce by 3% in a competitive labor market.
- The CDK outage significantly impacted business processes, leading to a $1.55 per share adverse effect on second-quarter results.
- Total used vehicle sales for the quarter decreased by 8% year-over-year on a same-store basis.
- Gross profit decreased by 3% on a sequential basis due to the productivity drag from the outage.
- Floorplan interest expense increased by $21 million from a year ago, reflecting higher inventory levels and interest rates.
- Adjusted net income dropped to $163 million from $285 million a year ago, partly due to the CDK outage.
Good morning. Thank you for attending the AutoNation 2Q '24 earnings call. My name is Elissa, and I will be your moderator today. (Operator Instructions)
I would now like to pass the call to our host, Derek Fiebig, with AutoNation. Please go ahead.
Thank you, Elissa, and good morning, everyone. Welcome to AutoNation's second quarter 2024 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer; and Tom Szlosek, our Chief Financial Officer. Following their remarks, we'll open up the call to questions.
Before beginning, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward
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