AutoNation’s Same-Store Customer-Pay Gross Profit Rose 8% In Q2

Aug 28, 2019

For the second quarter of 2019, AutoNation’s Customer Care (parts and service) revenue rose 5.2% to $901.50 million. On a same-store basis, Customer Care revenue increased 5.4% to $886.70 million.

Customer Care gross profit grew 6.4% to $411.90 million. Same-store gross profit increased by $25.30 million (or 6.7%) to $405.20 million, primarily because of an increase in gross profit associated with customer-pay service of $12.60 million (up 8%), warranty service of $9.10 million (up 12%) and wholesale parts sales of $3.20 million.

According to management, AutoNation’s customer-pay service gross profit benefited from an increase in volume, higher-value customer-pay repair orders, the company’s parts initiatives and price increases. Warranty service gross profit benefited from an increase in volume and improved margin performance largely due to a shift in mix toward higher-margin service work and improved parts and labor rates negotiated with certain manufacturers. Gross profit from wholesale parts sales increased because of the company’s brand extension strategy, according to management.

AutoNation, through its subsidiaries, is the largest automotive retailer in the United States. As of June 30, 2019, it owned and operated 324 new vehicle franchises from 237 stores, predominantly in major metropolitan markets in the U.S. Sunbelt region. The company also owned and operated 83 AutoNation-branded collision centers.

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