SONIC AUTOMOTIVE INC (SAH): Results of Operations and Financial Condition
SONIC AUTOMOTIVE INC (SAH) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Sonic Automotive Reports Second Quarter 2026 Financial Results Sonic Reported Second Quarter Record Consolidated Revenues and All-Time Record Quarterly Gross Profit EchoPark Segment Retail Unit Sales Volume Increased 17% Year-Over-Year, Driving Second Quarter Record
How this was made
The 30-second read
Why it matters
Traders can update models for dealership and EchoPark profitability trends using the disclosed record gross profit at the consolidated level, offset by YoY declines in adjusted net income and EchoPark income. The filing also adds capital return via a $0.41 dividend and provides acquisition-related annualized revenue expectations for Powersports.
Market read
A fresh earnings release with detailed segment KPIs, liquidity figures, and a dividend declaration, driving near-term repricing risk around margin durability and EchoPark profitability.
What to watch
EchoPark retail used unit volume rose 17% YoY, but total gross profit per unit fell, implying margin mix and inventory sourcing are key swing factors. Also, dividend timing and acquisition revenue expectations may be more important than the single-quarter EchoPark income decline.
Sonic reported second quarter record consolidated revenues of $3.9 billion and all-time record quarterly gross profit of $616.2 million, while adjusted net income declined 23% year-over-year.
Revenue, gross profit, EchoPark unit volume and Powersports results grew, but adjusted net income, adjusted EPS, same-store gross profit, several per-unit profit measures and EchoPark segment income declined year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $3.9 billion | – | up 8% year-over-year |
| Total gross profitGAAP | $616.2 million | – | up 2% year-over-year |
| Net incomeGAAP | $57.4 million | – | up 226% year-over-year |
| Earnings per diluted shareGAAP | $1.79 earnings per diluted share | – | up 234% year-over-year |
| Adjusted net incomenon-GAAP | $58.3 million | – | down 23% year-over-year |
| Adjusted earnings per diluted sharenon-GAAP | $1.82 adjusted earnings per diluted share | – | down 17% year-over-year |
| Total reported SG&A expenses as a percentage of gross profitGAAP | 72.2% | – | – |
| Total adjusted SG&A expenses as a percentage of gross profitnon-GAAP | 72.0% | – | – |
| Franchised Dealerships Segment reported SG&A expenses as a percentage of gross profitGAAP | 71.9% | – | – |
| Franchised Dealerships Segment adjusted SG&A expenses as a percentage of gross profitnon-GAAP | 71.7% | – | – |
| EchoPark Segment reported SG&A expenses as a percentage of gross profitGAAP | 73.4% | – | – |
| EchoPark Segment adjusted SG&A expenses as a percentage of gross profitnon-GAAP | 73.4% | – | – |
| Powersports Segment reported SG&A expenses as a percentage of gross profitGAAP | 73.5% | – | – |
| Powersports Segment adjusted SG&A expenses as a percentage of gross profitnon-GAAP | 73.5% | – | – |
| Franchised Dealerships same store revenuesother | – | up 2% | |
| Franchised Dealerships same store gross profitother | – | down 3% | |
| Same store retail new vehicle unit sales volumeother | – | flat | |
| Same store retail new vehicle gross profit per unitother | $2,872 | – | down 16% |
| Same store retail used vehicle unit sales volumeother | – | up 7% | |
| Same store retail used vehicle gross profit per unitother | $1,401 | – | down 13% |
| Same store Fixed Operations gross profitother | – | up 2% | |
| Same store customer pay gross profitother | – | up 1% | |
| Same store warranty gross profitother | – | up 3% | |
| Same store Fixed Operations gross profit marginother | 51.0% | – | down 30 basis points |
| Same store F&I gross profitother | – | down 1% | |
| Same store F&I gross profit per retail unitother | $2,619 | – | down 4% |
| EchoPark Segment gross profitGAAP | $64.3 million | – | up 4% |
| EchoPark Segment retail used vehicle unit sales volumeother | 19,601 | – | up 17% |
| EchoPark Segment incomeGAAP | $7.2 million | – | a 38% decrease year-over-year |
| Adjusted EchoPark Segment incomenon-GAAP | $7.2 million | – | a 34% decrease year-over-year |
| EchoPark Segment adjusted EBITDAnon-GAAP | $13.9 million | – | down 15% year-over-year |
| Powersports Segment gross profitGAAP | $19.7 million | – | up 58% |
| Powersports Segment incomeGAAP | $2.3 million | – | – |
| Powersports Segment adjusted EBITDAnon-GAAP | $4.9 million | – | a 145% improvement |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Franchised Dealerships SegmentSame store retail used vehicle unit sales volume was up 7%, while same store Fixed Operations gross profit was up 2%. | not reported | – | Same store revenues up 2% |
| EchoPark SegmentRetail used vehicle unit sales volume of 19,601, up 17%, drove revenue and gross profit growth despite lower total gross profit per unit. | $582.9 million | – | up 15% |
| Powersports SegmentSecond quarter record revenue and gross profit of $19.7 million, up 58%. | $73.5 million | – | up 53% |
annualized outlook
- Revenueapproximately $100 million in annualized revenue
- NotePreviously announced acquisition of Space Coast Harley-Davidson, Treasure Coast Harley-Davidson, Falcons Fury Harley-Davidson, Raging Bull Harley-Davidson, and San Diego Harley-Davidson in April 2026 is expected to add approximately $100 million in annualized revenue to Sonic's Powersports Segment.
- NoteEchoPark is positioning for disciplined footprint expansion beginning in the fourth quarter of 2026.
Capital returns
- Quarterly cash dividend of $0.41 per share, payable on October 15, 2026 to stockholders of record on September 15, 2026.
- Management stated it will balance strategic acquisitions, organic investment and share repurchases as opportunities arise and market conditions evolve.
What drove it
- Growth across Sonic's diversified operating segments drove record consolidated revenue and gross profit.
- EchoPark retail used vehicle volume increased 17% year-over-year.
- Franchised Dealerships used vehicle volume grew and Fixed Operations gross profit reached an all-time quarterly record, according to management.
- Powersports delivered record second-quarter revenue and gross profit.
- The Powersports acquisitions announced in April 2026 are expected to add approximately $100 million in annualized revenue.
Concerns
- Adjusted net income was down 23% year-over-year and adjusted earnings per diluted share was down 17% year-over-year.
- EchoPark reported segment income declined 38% year-over-year, adjusted segment income declined 34% year-over-year, and adjusted EBITDA declined 15% year-over-year.
- Franchised Dealerships same store gross profit declined 3%.
- Same store retail new vehicle gross profit per unit declined 16% to $2,872, and retail used vehicle gross profit per unit declined 13% to $1,401.
- Same store F&I gross profit declined 1% and F&I gross profit per retail unit declined 4% to $2,619.
- Management cited difficult year-over-year comparisons and a challenging consumer affordability backdrop.
What to watch
- EchoPark's inventory sourcing mix and F&I performance.
- EchoPark's planned disciplined footprint expansion beginning in the fourth quarter of 2026.
- Integration and revenue contribution from the Powersports acquisitions announced in April 2026.
- Franchised Dealerships per-unit gross profit trends, including new and used vehicles.
- Fixed Operations gross profit and gross profit margin trends.
- Consumer affordability and the stated risks from tariffs, vehicle and parts pricing and supply, consumer demand, inflation and interest rates.
Balance sheet and cash flow
- Approximately $294 million of cash and floor plan deposits at quarter end.
- Approximately $676 million of total available liquidity resources at quarter end.
- Franchised Dealerships Segment had 56 days’ supply of new vehicle inventory (including in-transit) and 35 days’ supply of used vehicle inventory on a trailing quarter cost of sales basis.
- EchoPark Segment had 47 days’ supply of used vehicle inventory on a trailing quarter cost of sales basis.
Analysis
Sonic delivered record consolidated revenue of $3.9 billion, up 8% year-over-year, and record total gross profit of $616.2 million, up 2%. The gap between revenue and gross-profit growth is reflected in lower Franchised Dealerships same-store gross profit and lower per-unit vehicle gross profit. Reported net income rose 226% to $57.4 million and reported diluted EPS rose 234% to $1.79, while adjusted net income fell 23% to $58.3 million and adjusted EPS fell 17% to $1.82.
Franchised Dealerships showed mixed underlying operating trends. Same-store revenue increased 2%, retail used vehicle unit sales volume increased 7%, and Fixed Operations gross profit increased 2%. However, same-store gross profit declined 3%, new vehicle gross profit per unit declined 16% to $2,872, used vehicle gross profit per unit declined 13% to $1,401, and F&I gross profit per retail unit declined 4% to $2,619. Fixed Operations gross profit margin declined 30 basis points to 51.0%.
EchoPark produced $582.9 million of revenue, up 15%, and $64.3 million of gross profit, up 4%, as retail used vehicle unit volume rose 17% to 19,601. The segment's profit measures did not keep pace with volume and revenue: reported segment income declined 38% to $7.2 million, adjusted segment income declined 34% to $7.2 million, and adjusted EBITDA declined 15% to $13.9 million. Management specifically identified lower total gross profit per unit and plans to improve inventory sourcing mix and F&I performance.
Powersports was the strongest reported segment growth contributor, with record revenue of $73.5 million, up 53%, record gross profit of $19.7 million, up 58%, segment income of $2.3 million compared with breakeven in the prior-year period, and adjusted EBITDA of $4.9 million compared with $2.0 million. The April 2026 acquisitions are expected to add approximately $100 million in annualized revenue to the segment.
Capital allocation included a quarterly cash dividend of $0.41 per share. Management reported approximately $294 million of cash and floor plan deposits and approximately $676 million of total available liquidity resources, and stated that it will balance acquisitions, organic investment and share repurchases. The release did not provide formal consolidated financial guidance, though management said EchoPark is positioning for disciplined footprint expansion beginning in the fourth quarter of 2026.
Management, verbatim
Our second quarter performance reflects the strength of Sonic’s diversified business model and the commitment of our teammates across the organization. We generated second quarter record consolidated revenues of $3.9 billion and all-time record quarterly gross profit of $616.2 million, driven by growth across our diversified operating segments.
David Smith, Chairman and Chief Executive Officer of Sonic Automotive
Our teams executed well in a quarter that included difficult year-over-year comparisons and a challenging consumer affordability backdrop. Our continued focus on opportunities in our used vehicle and fixed operations businesses led to our Franchised Dealerships segment delivering strong used vehicle volume growth and all-time record quarterly fixed operations gross profit, along with second quarter record F&I gross profit.
Jeff Dyke, President of Sonic Automotive
We ended the quarter with approximately $294 million of cash and floor plan deposits and approximately $676 million of total available liquidity resources. Our balance sheet and liquidity position provide the flexibility to fund our existing operations, support targeted growth investments and return capital to stockholders.
Heath Byrd, Chief Financial Officer of Sonic Automotive
Not in the filing
stated, not guessed- Consolidated operating income and operating margin.
- Consolidated gross margin.
- Consolidated cash from operating activities and free cash flow.
- Total cash, total debt, net debt and detailed balance-sheet amounts.
- Share repurchase amount, share count and remaining repurchase authorization.
- Franchised Dealerships Segment revenue, gross profit, segment income and EBITDA.
- Prior-year dollar amounts for total revenues, total gross profit, net income, diluted EPS, adjusted net income, adjusted diluted EPS, EchoPark revenue and gross profit, and Powersports revenue and gross profit.
- Prior-quarter comparisons for reported metrics.
- Formal consolidated revenue, gross margin, operating expense or tax-rate guidance.
- Detailed GAAP-to-non-GAAP reconciliation and full financial statements, which were not included in the provided filing text.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Sonic Automotive’s SEC Form 8-K reporting Q2 2026 results (Item 2.02) with segment performance, liquidity, and a declared quarterly dividend.
Ticker impact
Sonic Automotive reported Q2 2026 results, including $3.9B revenue (+8% YoY) and $57.4M net income (+226% YoY), plus segment and liquidity updates.
Near-term reaction likely choppy: investors may focus on record revenues and gross profit plus liquidity, while discounting YoY declines in adjusted net income and EchoPark income.
The filing provides multiple directional datapoints: record consolidated revenues and gross profit, but adjusted net income down 23% YoY and EchoPark segment income down 38% YoY. It also discloses a $0.41 quarterly dividend and acquisition-related revenue expectations, which can support sentiment but do not fully offset the mixed profitability trends.
Market effects
Provides read-through on used-vehicle demand and dealership fixed-ops performance, with EchoPark showing volume growth but lower per-unit gross profit.
No specific regional catalyst beyond company-wide results.
Primarily US auto retail demand and financing/F&I dynamics; limited global spillover.
Counterpoint
The headline net income surge may be less durable given adjusted net income fell 23% YoY and EchoPark income declined, suggesting earnings quality could deteriorate if per-unit gross profit pressure persists.
Key entities
- issuerSonic Automotive, Inc.
Reported Q2 2026 financial results, segment metrics, liquidity, and a quarterly cash dividend.
- segmentEchoPark Segment
Reported record segment revenues and used unit volume growth, but segment income and adjusted EBITDA declined YoY.
- segmentPowersports Segment
Reported record Q2 revenues and gross profit, with improved segment income and adjusted EBITDA.
