Powersports operations help drive Sonic’s record-setting quarter
Publicly traded automotive and powersports retailer Sonic Automotive reported record highs in second-quarter revenue and net income, with the company saying its powersports operations significantly contributed to the growth.
Sonic reported record-setting revenue of $3.9 billion, up 8% from a year earlier, and all-time quarterly gross profit of $616.2 million, up 2%. Reported GAAP earnings were $1.79 per diluted share, while adjusted earnings were $1.82 per diluted share, chairman and CEO David Smith said on the company’s earnings call.
Powersports growth and capital allocation
Powersports revenue climbed 53% to a second-quarter record of $73.5 million, while net income increased 57% to $19.7 million. Same-store revenue and gross profit each rose 13%. The powersports segment reported income of $2.3 million, compared with break-even results a year earlier, and adjusted EBITDA increased 145% to $4.9 million.
Smith said recently acquired Harley-Davidson dealerships in California, Florida, Georgia and North Carolina supported the segment’s growth. Management said the acquired locations were producing returns above expectations despite limited integration of Sonic’s operating approach.
At quarter-end, Sonic had approximately $676 million of total available liquidity, including roughly $294 million of cash and floor-plan deposits. Smith added that the company sees acquisition opportunities in both franchised dealerships and powersports, with management describing powersports valuations as particularly compelling.
Sonic Powersports is one of the fastest-growing powersports companies in the U.S. and is made up of 20 dealerships, including two tactical fleet locations.
