AutoNation Flags Softer Service Growth, 10% Drop in New-Vehicle GPU, and EV Slump
AN is trading near its 52-week low of $176.62 (0.8% above the low).
Summary
AutoNation shares fell about 9% after management warned at a Morgan Stanley conference that service growth is moderating, with Q3 growth expected to be more modest as customers become more selective on maintenance spending. The company also guided new-vehicle gross profit per unit down about 10% sequentially in Q3 due to model-year changeover and affordability pressures, forcing more price concessions. EV penetration has collapsed to low single digits from 8-9% after incentives expired. On the positive side, AutoNation Finance has grown its loan portfolio to nearly $3 billion, financing about 18% of vehicles, and now contributes to a profit mix where roughly 80% comes from service and financial products. This follows Q2 results that showed record after-sales profit and a 50%+ surge in the finance portfolio, but the new commentary signals near-term margin compression. The stock is trading near its 52-week low, and this guidance adds to a third straight session of declines.
At the time of this announcement, AN was trading at $178.05 on NYSE in the Trade & Services sector, with a market capitalization of approximately $5.9B. The 52-week trading range was $176.62 to $235.81. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Seeking Alpha.