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Flexibility keeps retailers afloat

Total shareholder return for U.S. retail groups; percentage change per period
  Name Q3 2001 Past 12 months Past 36 months
1 UnitedAuto -5 101.3 17.2
2 Rush Enterprises -6.7 -3.7 -46.4
3 Group 1 -10.3 144.3 77
4 Lithia Motors -17.3 14.6 24.9
  TSR Index -22.3 55 -28.6
5 AutoNation -24.2 46.4 -33.3
6 Sonic Auto -28.8 63.6 37.3
7 CarMax -29.5 146.8 91.7
8 Budget Group -36 -60.3 -93.3

Retailers were the automotive players most insulated from the events of Sept. 11. But a quarterly drop in value of 22.3 percent is still hard to absorb, especially for a group that bled shareholder value until just this year.

Weak economic growth, lower consumer confidence and the terrorist attacks slowed demand in the third quarter and continue to threaten prices and profits, say experts at Pricewaterhouse Coopers.

But retailers have done a better job than automakers and suppliers of fulfilling the market's expectations. Many topped analyst forecasts in the first half of 2001, driving shareholder returns up by more than 40 percent in each of the first two quarters.

The group's flexibility and more diverse revenue stream are another advantage.

"They have multiple products," said Jay Singer, a PricewaterhouseCoopers director. "They have the parts, the service, the used cars; they can shift their focus. They can't do it overnight, but they're able to shift their focus to different niches within the industry that the vehicle makers and the suppliers don't have the luxury to do."

On a one-year basis, dealers posted a 55 percent rise, beating the other automotive groups and the market benchmarks. Over three years, the group declined 28.6 percent.

UnitedAuto Group led the third quarter with a 5 percent decline. CarMax topped the index with a one-year return of 146.8 percent and a three-year return of 91.7 percent.

You can reach Amy Wilson at

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