AutoNation Inc.'s first-quarter results were hampered by slower business and stay-at-home orders across most of its footprint amid the coronavirus pandemic, driving the auto retail giant to a net loss.
The nation's largest new-vehicle retailer said Monday that first-quarter revenue dropped 6.3 percent to $4.67 billion. Lower revenues and $315 million in after-tax noncash goodwill, franchise rights and other impairment charges mostly related to COVID-19 led to a net loss of $232.3 million. That compared with net income of $92 million in 2019's first quarter.
When adjusted for the special charges, net income from continuing operations was $82.4 million, down 4 percent. In the year-ago quarter, AutoNation had $6 million in after-tax gains on store divestitures.
AutoNation said its same-store new and used retail vehicle sales plunged 52 percent during the first 10 days of April but were down just 19 percent during the last 10 days of the month. For all of April, same-store new and used retail sales fell 37 percent.
“I’m comfortable sitting here today and declaring the automotive recovery is underway,” AutoNation CEO Mike Jackson told CNBC on Monday. “It’s supported by pent-up demand, this need for personal space, available financing at very affordable prices, and it’s entirely appropriate that the factories reopen. I fully support it. We need the vehicles.”
As of Friday, the company said, states where it earns about 51 percent of its revenue were largely under stay-at-home orders. In early April, states where AutoNation collects about 95 percent of revenue were under such orders.
“It’s time to gradually, safely reopen and rebuild America,” Jackson told CNBC.
New-vehicle and used-vehicle revenues fell in the quarter, while parts and service and finance and insurance revenues were near flat.
In early April, AutoNation said it had placed about 7,000 employees on unpaid leave and temporarily cut employee base pay, frozen hiring, trimmed advertising costs by about half for the second quarter and postponed more than $50 million in capital expenditures.
CEO Cheryl Miller, who was granted leave later in April for undisclosed health reasons, and Jackson, the retailer's executive chairman who was named CEO until Miller returns, each took 50 percent salary cuts. Other executives and corporate and regional staff also have taken pay cuts from 20 to 35 percent.
AutoNation confirmed Monday that it has brought back about 1,200 furloughed employees.
The retailer said it had liquidity of more than $1.4 billion as of Friday, including more than $750 million in cash and about $650 million available in its revolving credit facility.
AutoNation shares closed Monday's trading up 2.8 percent to $39.39.
Records: All-time same-store F&I gross profit per vehicle retailed of $2,089
Sales: New-vehicle sales tumbled 11 percent to 56,739. Used-vehicle sales fell 8.2 percent to 56,149.
Same-store sales: New-vehicle sales on a same-store basis declined 8.8 percent to 56,692. That compares with a U.S. new light-vehicle sales decline of 12 percent during the first quarter, according to the Automotive News Data Center.
Used-vehicle sales on a same-store basis dropped 6.2 percent to 56,093.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 282,602 new vehicles in 2019.