Sonic Automotive Inc.'s first-quarter net income soared on revenue growth from its EchoPark brand of standalone used-vehicle stores and record finance and insurance profits.
The nation's fifth-largest dealership group, in a statement Thursday, said it posted net income of $42.2 million compared to a loss of $2.2 million in the same three months a year ago. Revenue fell 0.5 percent to $2.39 billion, as new-vehicle retail sales dropped.
Sonic, which has been increasing emphasis on its EchoPark used-vehicle store unit, announced that the division was profitable for its first quarter ever. Sales for EchoPark's eight stores more than doubled to 11,051 vehicles, and the division posted pretax income of $200,000. Revenue for EchoPark surged 90 percent to $249.6 million.
"We are very pleased with the results for the quarter with our franchised dealerships offering a solid performance and EchoPark beginning to show what is possible from what we have developed over the last several years," Sonic CEO David Smith said in a statement. "We believe EchoPark revenues will eclipse the $1 billion mark in 2019 as our stores are still maturing."
The company said it received $121.7 million for selling four franchised dealerships during the quarter. Those stores represented about $300 million in annual revenue.
Sonic's shares surged 12 percent to close at $17.77 on Thursday in New York.
Records: Sonic achieved first-quarter record F&I gross profit of $106.2 million. It also set an all-time quarterly record for F&I gross profit per unit of $1,676 and best-ever used-vehicle retail unit sales.
Sales: New-vehicle unit sales sank 15percent to 25,197, while used-vehicle unit sales jumped 14 percent to 38,463.
Same-store sales: New-vehicle unit sales fell 8.2 percent to 24,695. That compares with a drop of 3.2 percent in new light-vehicle sales across the U.S. during the first quarter, according to the Automotive News Data Center. Used-vehicle unit sales rose 13.5 percent to 35,609.
Sonic, of Charlotte, N.C., ranks No. 5 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 122,717 new vehicles in 2018.