Sonic Automotive Inc - Class A
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.69%.
Did SAH Beat Earnings? Q1 2026 Results
Sonic Automotive posted a mixed but largely encouraging first quarter for 2026, delivering an adjusted earnings beat even as revenue fell modestly short of expectations. Adjusted diluted EPS came in at $1.62, clearing the $1.40 consensus estimate by 15.46%, while consolidated revenue of $3.69 billion rose 1.0% year-over-year but trailed the $3.73 billion Wall Street had anticipated by 1.10%. The headline driver was a standout performance in the EchoPark pre-owned vehicle segment, which generated record quarterly pre-tax income of $16.20 million, up 57% year-over-year, and total GPU of $3,502 per unit, helping offset a 22% decline in Franchised Dealerships segment income that reflected the absence of $30.00 million in prior-year cyber insurance proceeds. Capital returns were aggressive, with Sonic repurchasing roughly 2.1 million shares for $135.70 million and raising its quarterly dividend 8% to $0.41 per share. Looking ahead, management raised EchoPark adjusted EBITDA guidance to $35.00 million-$40.00 million, though tariff uncertainty clouds the outlook for second-half vehicle pricing, a concern some analysts covering the stock have flagged as a meaningful headwind.
- EchoPark segment achieved all-time record quarterly pre-tax income, gross profit, and adjusted EBITDA driven by strong tax refund season
- Franchised Dealerships fixed operations gross profit up 10% YoY to first quarter record, driven by technician hiring and retention
- Franchised Dealerships F&I gross profit per unit up 9% YoY to record $2,670
- Used vehicle unit sales volume growth of 3% across both Franchised and EchoPark segments
- Powersports segment narrowed losses with revenue growth of 19% YoY
- Share repurchases reduced diluted share count by 2% YoY, improving per-share metrics
“I am grateful for our team's efforts in the first quarter, which delivered several first quarter and all-time quarterly records across our operating segments. Our Franchised Dealerships built on fourth quarter momentum to deliver record consolidated first quarter revenue, and our EchoPark team capitalized on a strong tax refund season to deliver an all-time record adjusted EBITDA of $18.6 million while continuing to provide a world-class guest experience. We are also excited to expand our Powersports segment in the great riding states of California, Florida, Georgia, and North Carolina. The acquisition of five new Harley-Davidson dealerships establishes Sonic Powersports as one of the fastest growing powersports retailers in the country and reinforces our commitment to diversifying our revenue base and enhancing shareholder returns.”
Sonic Automotive CEO, on the earnings call
Forward Guidance & Outlook
For FY 2026, Sonic anticipates Franchised Dealerships new vehicle GPU of $2,700-$3,000 per unit (H2 potentially lower due to tariff impact), used vehicle GPU of $1,350-$1,450 per unit (raised from $1,300-$1,400), mid-single-digit same-store fixed operations gross profit growth, and F&I GPU of $2,600-$2,700 per unit. Adjusted SG&A as a percent of gross profit is expected in the low 70% range. Floor plan interest expense is anticipated to increase approximately 10% from FY 2025. Effective income tax rate is expected at 28.0%-29.0%. For EchoPark, the company expects adjusted EBITDA of $35-$40 million (raised from $25-$35 million), high-single-digit used retail unit volume growth, total GPU of $3,400-$3,600, and plans to resume disciplined expansion in Q4 2026 supported by $10-$20 million in incremental brand marketing beginning mid-2026. The Powersports segment is expected to deliver FY 2026 adjusted EBITDA of $14-$17 million (raised from $12-$15 million), including recent Harley-Davidson acquisitions expected to generate approximately $100 million in annualized revenue. Management flagged tariff uncertainty as a key risk to H2 2026 vehicle pricing and consumer demand.
SAH YoY Financials
SAH Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.