By a smidgen, Sonic sets record

By a tiny margin, Sonic Automotive Inc. last week posted record third-quarter profits, rounding out a list of big auto retailers that outperformed the Big 3 automakers for the period.

In addition to Sonic, Lithia Motors Inc., Group 1 Automotive Inc. and UnitedAuto Group Inc. all had record third-quarter results.

Sonic is the nation’s second-largest dealer chain, after AutoNation Inc.

“The vehicle sales market continues to exceed expectations, stimulated by aggressive manufacturer-provided incentives,” said Sonic Chairman O. Bruton Smith.

Sonic, which based in Charlotte, N.C., said it earned $22.118 million, up 0.3 percent from $22.059 million a year earlier, on revenue of $1.6 billion, down 1.8 percent. For the year to date, profit was off 6.1 percent from a strong period a year earlier to $58.1 million. Revenue for the period was up 3 percent to $4.7 billion.

Higher gross margins for parts and service, as well as finance and insurance, accounted for the profit improvement, Sonic said. Gross margin for parts, service and collision repair was a hefty 46.1 percent of sales, vs. 44.7 percent a year earlier, the company said.

Gross margins slipped for both new- and used-car sales. New-car grosses dipped to 7.9 percent, from 8.2 percent a year ago. Used-car margins fell to 10.8 percent, from 10.9 percent.

You can reach Jim Henry at autonews@crain.com

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