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Automotive retail giant AutoNation Inc. has announced that it will acquire Priority 1 Automotive Group as it reported record third quarter results that saw its bottom line nearly double, supported by vehicle sales and revenues. used vehicles and a record gross profit per new vehicle.
The nation’s largest new vehicle retailer said Thursday it posted third-quarter net profit of $ 361.7 million, nearly double the $ 182.6 million it earned a year earlier. Revenue jumped 18 percent to $ 6.38 billion, even as new vehicle sales fell 12 percent.
“Demand continues to outpace the supply of new vehicles,†AutoNation outgoing CEO Mike Jackson said in a statement. Former Fiat Chrysler Automobiles CEO Mike Manley is expected to take the helm of AutoNation on November 1.
AutoNation said the day supply of new vehicles was only 10 days at the end of September. A year ago it was 43.
“New vehicle sales are constrained by reduced production volume with low inventory levels,†Jackson said. “We expect this pent-up demand to support sales for the foreseeable future.”
AutoNation said it has signed an agreement and hopes to complete the acquisition of Priority 1 Automotive by the end of the fourth quarter, pending approvals from the manufacturer and others. The acquisition is expected to generate approximately $ 420 million in annual revenue.
At the end of September, AutoNation bought 11 dealerships and a collision center from Peacock Automotive Group, under a deal originally announced in April. These stores are expected to generate $ 380 in annual revenue.
Also in September, AutoNation opened a pre-owned AutoNation USA store in Northglenn, Colorado, and this week opened one in Littleton, Colorado, the third of five AutoNation USA outlets it plans to open. This year. Additional sites are planned in Phoenix and Charlotte, North Carolina. The group wants to expand AutoNation USA to more than 130 sites by the end of 2026.
This week, the company, in a regulatory filing, said it plans to sell 17 of its crash centers – about a quarter of its number – to Caliber Holdings in a deal expected to be reached by now. the end of the year.
Meanwhile, during the third quarter, AutoNation spent $ 879 million to buy almost 11% of its own stock, while the board authorized another $ billion in buybacks.
AutoNation shares rose 3.3% pre-market Thursday to $ 120.80.
Q3 turnover: $ 6.38 billion, up 18% from the previous year.
Q3 net income: $ 361.7 million, nearly double the $ 182.6 million earned a year earlier.
Vehicle sales in the 3rd quarter: 135,830 combined sales of new and used vehicles, up 4%.
Recordings: Same store gross profit per vehicle of $ 5,484 and same-store finance and insurance gross margin per vehicle of $ 2,573.
AutoNation, of Fort Lauderdale, Fla., Ranks # 1 on Automotive Newslist of the top 150 US-based dealer groups, retailing 249,654 new vehicles in 2020.
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