Total Revenue: Increased by 1%, with notable growth in parts and service at 8%.
Gross Profit: Reached $1.2 billion or 18.5% of revenues, experiencing a nominal decline from 2023.
New Vehicle Sales: Unit volumes were up by 7%, with imports increasing by 19% and premium luxury down by 4%.
Used Vehicle Sales: Volume unit increased by 2% year-over-year or decreased by 2% on a same-store basis.
Customer Financial Services (CFS): Gross profit per vehicle retailed (PBR) showed only a modest decline, maintaining strong product attachment rates.
After Sales: Represented 46% of total gross profit for the quarter, with an 8% total store revenue increase.
Net Income: Reported at $190 million, down from $289 million a year ago.
Earnings per Share (EPS): Stood at $4.49 for the quarter, helped by share repurchase activity reducing average shares outstanding by 11%.
Future Guidance
New Vehicle Margins: Expected to continue moderating throughout 2024, at a rate similar to the last two quarters.
Used Vehicle Margins: Seen as having upside potential despite current constraints, with a focus on improving unit profitability.
Customer Financial Services: Expected to maintain strong performance, despite challenges in the interest rate environment.
After Sales: Anticipated to keep growing, although year-over-year comparisons may become tougher.
Capital Expenditures (CapEx): Remained stable at $94 million for the quarter, with a strong focus on strategic investments and share repurchases.
Trends, Market Conditions, Sentiment
Consumer Demand: Remains robust for both new and used vehicles, with a quarterly increase in sales for the first time since Q2 2021.
Inventory Levels: New vehicle supply chain nearing normalized levels, with inventory dollars increasing by approximately 5% since the beginning of the quarter.
Vehicle Margins: New vehicle average selling prices decreased by 5%, leading to a revenue increase of 2% for new vehicles.
Interest Rate Environment: Continues to be challenging, affecting customer financial services, although strong attachment rates for products have been maintained.
Technician Workforce: Increased by 5% from a year ago, supporting growth in after-sales service.
Share Repurchases: AutoNation repurchased $250 million of shares in 2024, reducing the share count by another 4% since the beginning of the year.
Notable Quotes
”Consumer demand for vehicles in the first quarter was robust. And in fact, this is the first time we have had a quarterly increase in both new and used vehicle sales since the second quarter of 2021."
"New vehicle supply chain is in the final stages of recovery, and our inventory is also nearing normalized levels."
"The team has completed the inventory alignment actions, and we have experienced improvement in unit profitability in each month of the first quarter as we had expected."
"Our business model is clearly resilient, working well, and we continue to deliver strong financial performance."
"Our appetite and capacity for acquisitions in our core space is strong."
"Our share repurchase activity helped to partially offset the EPS effects of the net income decline."
"We closely monitor metrics for our key operating cycles and have resources and programs in place to drive efficiencies in needs.”
