AutoNation Inc. posted declines in net income and revenue in the third quarter after being pounded by Hurricanes Harvey and Irma.
Despite the hit, the nation’s largest dealership group improved its used-vehicle results, in terms of both gross profit per unit retailed and sales volume. The company also continued to expand its collision business as part of AutoNation’s brand-extension policy.
Third-quarter net income fell 9.1 percent to $97.5 million, the retailer said in a statement Thursday. Hurricane Irma alone slashed aftertax net by $8 million.
Revenue dipped 2.4 percent to $5.43 billion.
Shares in AutoNation surged 14.8 percent to close at $54.62.
In early September, AutoNation closed 76 stores in Florida -- nearly all of its home-state locations -- because of Hurricane Irma.
AutoNation also closed stores in the Houston area in late August as Hurricane Harvey ravaged the nation’s fourth-largest city. CEO Mike Jackson estimated that as much as 6 percent of the company's inventory in the area was a total loss. The hurricanes disrupted operations at some stores for up to an entire week, the company said.
Used-vehicle strength
New-vehicle sales declined 2.4 percent to 86,192 units, while used-vehicle retail sales rose 6.4 percent to 59,330.
On a same-store basis, the used-vehicle retail sales growth was even stronger, rising 6.6 percent to 57,984 units.
In addition, gross profit per used vehicle retailed stood at $1,437.
While that same-store figure was off 5.8 percent, or $89, from a year earlier, it was up a sharp $160 from the second quarter, when the retailer said it had problems with its centralized One Price strategy.
Those problems have been fixed, it said, resulting in the profit gain.
Overall same-store, used-vehicle gross profit rose 9.0 percent to $82.7 million, largely on a much smaller loss on wholesaled used vehicles.
AutoNation sold 85,186 new vehicles, down 1.4 percent on a same-store basis from a year earlier and in line with the U.S. industry’s 1 percent drop in the quarter.
Collision centers
Since October 2016, AutoNation has acquired or opened six collision centers and now owns and operates AutoNation-branded 73 collision centers nationwide.
The retailer expects to open two more during the fourth quarter, and has signed agreements to acquire an additional three. The acquisitions are expected to close by the end of the year.
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