Sonic Automotive Q2 net income jumps despite CDK outage

Sonic Automotive Inc.'s second-quarter net income jumped 76 percent from a year ago, despite a hit from the CDK cyberattacks and system outage in June.

Sonic Automotive's net income of $41.2 million was nearly double the $23.4 million from second-quarter 2023, when the group took a charge for its closure of eight EchoPark used-vehicle-only stores.

During the three months ended June 30, Sonic said the CDK software outage cut net income by about $22.2 million, including pretax charges of $11.6 million for extra compensation paid to employees related to the CDK outage. In the quarter, Sonic Automotive also had a $3.6 million hail and storm damage charge and a $1.4 million impairment charge related to the group's EchoPark used-only locations.

Excluding those items, Sonic reported an adjusted net income of $51.3 million, down 22 percent year over year.

Sonic CEO David Smith said the group's access to CDK systems is back on, but the group experienced continued disruptions "related to the functionality of certain CDK customer lead applications, inventory management applications and related third-party application integrations with CDK."

Net income: $41.2 million, up 76 percent from a year earlier.

Revenue: $3.45 billion, down 5.5 percent from last year.

Vehicle sales: 27,026 new vehicles, including fleet, down 3.3 percent from a year earlier, and used-vehicle sales at its franchise stores rose 1.9 percent from a year earlier to 25,668. EchoPark stores sold 16,641 used vehicles, down 2.6 percent. On a same-store basis, EchoPark's sales increased 23 percent to 16,641.

Sonic shares Sonic shares rose 3.4 percent to close at $57.78 on Aug. 5.

Sonic Automotive on April 16 sold Enchanted Mazda in Santa Fe, N.M., to Ryan Knight, Paul Tew and Jordan Peterson of 2AutoGroup.

Sonic Automotive, of Charlotte, N.C., ranks No. 6 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 107,257 new vehicles in 2023.