SAH - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the Sonic Automotive Fourth Quarter 2024 Earnings Conference Call. This conference call is being recorded today, Wednesday, February 12, 2025. Presentation materials, which accompany management's discussions on the conference call, can be accessed at the company's website at ir.sonicautomotive.com. At this time, I'd like to refer to the safe harbor statement under the Private Securities Litigation Reform Act of 1995.

During this conference call, management may discuss financial projections, information or expectations about the company's products or market or otherwise make statements about the future. Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission.

discuss and financial Exchange may by as management Securities the Commission. addition, certain measures non-GAAP defined In Please refer the to introduce company's Commission current the today. I'd Mr. non-GAAP reconciliation on earlier X-K tables Form filed like with now Securities Exchange report and to in the David Chief and Chairman Officer of Smith, Automotive. Sonic Executive Mr. may conference. you Smith, your begin

David Smith

Quarter and Call. much, very Welcome you Earnings morning, everyone. to XXXX the Thank good Sonic Automotive Fourth

CEO. I'm David Smith, and mentioned, Chairman he As company's the

our EchoPark me Investor today's Byrd; our is our CFO, and President, Keen; our to Relations, Wieland. We would of Dyke; Operating on like the Jeff Chief our for our thanking customers. to deliver for Joining call amazing sincerely Danny President continuing Tim world-class Officer, a open experience Heath Vice by teammates call Mr. guest

again set Automotive and the annual second #X satisfaction teammates as the in once teammates automotive Reputation.com record ranked customer by scores. EchoPark franchise spot a have pre-owned Automotive top dealer guest satisfaction consecutive in Sonic earned our Our

welcome Atlanta. And remaining to Volvo Point the loyalty our for like venture of newest to our Greater as our always, teammates key quarter delivers Our and for our lending success. would to that our lives teammates joint enriches our and acquisition like I are truly relationships our fulfills dreams, with future are Sonic all our partners Sonic their purpose of the team. I in guests strong and support and would our thank guests teammates, deliver We teammates them to believe also Sonic fourth XX% experience happiness. our Automotive manufacturer North an to and from living

announce & add our major and we million Orleans annualized pursuing XXXX. the approximately Greensboro, to would collectively, in that to to these In addition expect we are to vehicle in acquiring New franchises actively market We like back of revenues Motorcycles and in acquisitions also $XXX new acquisitions business. of Audi Charlotte

year-over-year. $X.XX EPS morning, was revenues increased consolidated profit in excluding year-over-year, effect total per GAAP fourth a this and an EBITDA results; the as adjusted while decrease quarterly X% our $X.XX quarter up to per share, now of all-time Fourth X% adjusted consolidated share. certain was consolidated our EPS X%. gross release Turning grew record, detailed quarter X% press items And our were

Moving increase XX% to of a fourth revenues $X.X results; dealership our we X% all-time in was franchise year-over-year. growth revenues. and increase now used record XX% volume retail new operations This segment up quarter, in XX% fixed volume, retail franchise by increase in a a revenue billion, driven generated quarterly the in

gross up profit also Our fixed all-time year-over-year, records, set operations and respectively. XX% and profit F&I gross XX% quarterly

the sales to decreased new quarter, sequentially With quarter. of $X,XXX, range. the days and line XX was new volume third exit the our previous at in third $X,XXX due XX the acceleration vehicle with the luxury low from the end GPU days, to in to in new vehicle Same-store vehicle the fourth day quarter from our year up brand down in supply mix guidance

grew volume we X% challenge. and On a affordability the consumer by remain while the franchise supply of used year-over-year, side business, vehicle constraints

normalized Our GPU a stable was used in supply our inventory day target environment. at $X,XXX XX per basis, range unit supply days and sequentially same-store at was approaching this used levels on in GPU

$X,XXX structurally will these than a environment. consumer F&I sequentially at F&I be remain continued stability and performance in affordability per franchise X% up The fourth with a supports to our year-over-year. strength of continues levels F&I Our even in higher same-store pre-pandemic unit quarter, view challenging the F&I levels GPU that in

combined by in same-store XXXX. gross fourth was strong net effects by with warranty higher XX% operations quarter. increase of remains during headcount business in increase profit initiative technician in repairs, XXX strong a part driven to This technicians fixed Our parts our the and service operations with growth levels the fixed of or very

exceeded adding to goal, hiring for that we focus growth to in to We excited retention. strong announce very expect and we the XXX fixed this XXXX XXXX, net are operations set as stage challenging which on continue technicians we technician during

we Turning result inventory now $X.X was This a below guidance to EchoPark adjusted million, $X third from improve to used heading in $X into sequentially. too response, for as our used the segment; a third $XXX our the inventory inventory to quarter, primarily quarter EchoPark GPU the bit and quarter demand. GPU previous taken in adjusted seasonal EBITDA led fourth quickly depreciation aging used by our exiting decline of steps first EBITDA. and for in rightsize to a building to quarter which sequential slowdown million a little shortfall have was In amidst million EchoPark risk at driven expect

$XX On down revenue fourth third excludes million, the per $XXX unit, compared EchoPark to vehicle reported For EchoPark fourth million, prior year. lower-than-expected per quarter from a finished increased the unit XX% gross $XXX quarter. quarter, EchoPark of from basis, unit used year-over-year. profit volume quarter unit XX,XXX a EchoPark was quarter record flat. Gross sales volume revenues was XX market we down segment X% same-store was was -- supply GPU. closed of on units, year-over-year up gross stores, end the retail for year of and at EchoPark the front-end X% per unit year-over-year. and up retail segment profit prior despite X% profit day EchoPark at XX the which days the fourth the XX% approximately total up sales used $X,XXX same days

look long-term to Full the disciplined XXXX used long-term this and strategic the and our loss believe adjustments we million, of continue forward validate the from over on we in million results market achieved in has EchoPark profitability we a weather XXXX in as several vehicle the allowed past in resuming quarters. segment demonstrates for the Our conditions performance EBITDA market unwavering recent $XX these pretax XXXX. We was made to up basis in next EchoPark used improve us growth opportunity tremendous adjusted in challenges several vehicle years, over quarters, year and for potential to the $XX.X a XXXX confidence the EchoPark's believe brand.

to of million, our for was which fourth line quarter. our segment; now a revenues gross of a with EBITDA for Powersports generated $XX.X lighter $X million $X.X and seasonally profit of million, Turning we the quarter, adjusted fourth loss segment in expectations

Powersports focus to network within operational our playbooks. continue fine-tuning We while identifying current operating our on synergies

a growth retail when sector While segment, right. this approach in about we optimistic time to is in this we are opportunities future adjacent taking expansion the disciplined remain the

with liquidity, excluding balance our in we including combined available real $XXX deposits estate, floor the in year $XXX Finally, and million on ended sheet; cash to hand. plan unencumbered turning million

sheet a conservative capital as approach to the with the maintain strategically We ability evolves. market deploy continue to balance

on quarterly Additionally, approved $X.XX record payable I'm today pleased dividend per of Board to share a cash XX, to report of XX, of all Directors that stockholders XXXX, April our XXXX. March on

offset I help look in including affect and and the business. And this right our in to our that see once guidance can we have our limited segments franchise we culture our business production electric of presentation as decisions environment model look and interest team we value in again any that making to the to some questions right industry-driven financial many that face significant you shifts new returns. adapting certain focused others. In may you may right the earlier, XXXX, franchise in we concludes changes create mentioned to in acquisitions any have. morning, business forward released you. potential EchoPark our provides to the diversified macroeconomic answering people tariffs, for closing, environment that opening we forward our execution Powersports strategic for in We variables business impact the may provided investor and grow continue maximize there and Note As announcing earnings near-term vehicle continue remain are remains the Furthermore, affordability, on and automotive rate our and major Thank ongoing backdrop, may confident opportunities changes in we to margin and remarks, headwinds and stakeholders. This long-term that while believe to strategy, XXXX. long-term growth retail vehicle in demand XXXX. have to the we consumer among the

Operator

first today of coming America. is John from from question Bank Murphy [Operator Instructions] Our

John Murphy

Just a like are mentioned M&A. acceleration little just were valuations they high, leaning high, that bit question of hear kind little that folks a in But were that hear Lithia some on a and so first into some were we they the you, we folks. down, thought bit this. multiples slowing from

what I'm in seeing many regions you're the go just after. in you to and to strategies think valuations? curious So the game play there's what And ways market, of

your for different that seeing I'm So what somewhat target what you're just really and the is might curious be acquisitions?

Frank Dyke

is want discuss Yeah. ]? [ This David, do you Jeff. to

David Smith

ahead. Go

Frank Dyke

lot just our that XX in luxury the luxury is end now And and We're gotten across. about manufacturer Sonic opportunities sits with luxury. background in our we're seeing import single we ever country. been perspective, across years. day, This green more strength seeing than At more the a buy every for the not our on in better we We're I've side certainly worse. all of come desk deals across to have, our actually across Multiples have Jeff. seeing We're from deals the come the of We're position. a have. lines. great

saving that. we're dollars. got We've debt great -- our got our to sheet. out the for And been We've to go this so and it's a set sheet. liquidity We've balance up adding without do balance

And that. for for it's so ready We're opportunity us. a great

to Our don't team is We have that. any for ready overhead. add

your We've and I us deals to hopper, here right the So the the coming in a us EBITDA in month be lowering two. of lot do or immediate for SG&A. of the moment. this of at it's expect just would to And addition and it's deals got announcing thing

David Smith

mentioned comments opportunities have is I scores to satisfaction record and this teammates about competitors And have. customer just mention us on to that on some our our the have don't I Jeff's Yes. David. allowed earlier piggyback that the table would

for creates it strategic advantage have us to that performance. So a

appreciate really there. we team's our So efforts

John Murphy

sorry, sort you're of is other on lower is dealerships? going side? after, -- all specific smaller size of just mean, strategy it what's And than the comers I'm a sort large or follow just dealerships, that region and luxury, up, luxury to -- scale, there or I

Frank Dyke

deals, particular for our in out round of looking market we a package We're allows markets. brand in luxury have for market might our hopper it multiple rounds not at Texas. have big our And in sort Alabama, here a again. deals And there luxury domestic shining all mean, be East import. you Coast, Well, tell sea, there. on might to a -- I from across California, deal the sea tell Jeff I But California, there or and I markets Florida, from to would it's the each of deals out would are us multiple you where consumer. that

out advantage So there's opportunity of going here we're in that 'XX. a lot to of take John, there, and

David Smith

Yeah. look and We particularly in from we've love not a some and it's growth to Jeff in growth at decided to so mind, Texas. something at markets and some taking there. areas, pass deals on we recently we're But is when are keep looked markets

tries deals always to he some So bring Texas. from

John Murphy

nothing wrong There's Texas. with

Frank Dyke

You're right.

John Murphy

which in maybe create the of have EVs slide topic they're don't I to here put GPUs, that relief and a with when us through get how inventory of it going. new on new as politely of can more give clearing hopefully, that we or appreciate hottest of been kind the to or deck. they're restocked weight But get going some you is that restuffed gave And out On GPUs? drag where EVs, could outlook some the color you big normalize and on what GPUs? you

Frank Dyke

all, And first EVs. all ], sure with [ case. as need that's job We the restuffed to hope you're a Well, their want hell don't day board. much across get the exactly better of They managing right. the supply to I of do

because in up. down Now It's went way came day quarter. volumes supplies the fourth

industry consumer And hopefully, that's willing just something what along an to in away. That And Let's really even the think happens got needs through of as drag But that's go this year better a first domestic. for X we against on relief in And of the output see And the government incredibly I and buy. job manufacturers give reduction heavily drag managing -- it's Coast their vehicle better to going us the to become a will and do the job more electric is with go -- as there. a to a what year. in We particular, that we and new brands. I us. West just new to important the about little in particularly quarters focus $XXX will It's really mean, this important. the the a their and luxury GPU. do offset it's got big

Danny Wieland

this vehicles wide sales the for QX John, $X,XXX down of the mix higher we good XX% the new XXXX that. is news our That's on and vehicles with Again, penetration part of about to was One in point more the is on inventory the at of industry $X,XXX from electric to because than The we a of sales. BEV. is the of that our being that at quarter. And electric guided mix Danny. GPU range variability inventory finished that little exposure. But third XX% we're end of California XX% luxury

is. the inventory we've rate as with in didn't levels improving of we an the while of end our aligned as of So what the least EV GPU, headwind sales or get and benefit now of year at rightsized the

in So that's step big right direction. a the

Frank Dyke

manufacturers incentivizing now. are EVs right forget And don't heavily the

positive So that a doing the country amount we're volume you have terms probably in little right of in the of now. false

John Murphy

there. you're think false [indiscernible] being I positive

Frank Dyke

Yes.

John Murphy

Just tap for EchoPark. back to corner on understand are turn and that externally Just goes. see openings? real turning quick internally store the the you to potentially What where that KPIs lastly to the want are here. need things Things or on the

Frank Dyke

Yeah.

a I'll year. second. a let Tim in this little So talk get to look, want here we bit through But

up can We're testing how going come down could see $XX,XXX really our street. lanes bit. back, more to we're it's are range. to intention $XX,XXX even right buying of we going a to watch street. prices opening affordability continue That's comes little we things is first if as our off stores that drop. opening of start affordability quarter, second percentage buying to important stores. that to and more in of auction perspective, off better And cars buy think maybe It things the I We're in We're now. Should the affordability from begin pull quarter get an the a some 'XX. to cars the

own As estate. we already you know, facilities. have already We real

going out not big it's little on based go we we're third going big a be a level of marketplace. And though, stores. to So and on into the those when in to in inventory had quarter. deal going make and to very and start wait what's open with on the we quarter fourth the how we out of sure the bit hand a of mature got is that opening that deal, for us It

been do. Our million system $X rightsized It copy to to the did what -- $XXX $X or cost EBITDA. it's a things, range that us supposed and in we would in million have

that So normal the first Tim, in have we've got that? add here corrected you'd to anything quarter. and margins all returned to

Thomas Keen

the benefit rightsized adjustment what because know mean, in it to quarter. first No. us, the make cost from that the I we're we had into in certainly, quarter. the We to going but were inventories first fourth our quarter going

Heath R. Byrd

is this John, And Heath.

is bottom going in theory add, car supply XXXX. about, are talking used to hit we've Just to been external in the all obvious factors the that the

into and up will on back expansion we of will and that perfect the EchoPark. set So upswing, think of 'XX the us second 'XX, for going we half be

David Smith

We third would opened which should in I store as mean, It's to store store store Texas. this month, gates. XXX in we largest second out the John, And and opening. just cars a a closed our maybe it put great Stafford a and XXX, close a had there just in It do opened XXX rolling bigger of to shot automatically. smaller it Houston, in or Houston.

that's little Lease I we back. benefit all the that's So big bit hoped be to way. pricing returns and as the to the help not in drop for. manufacturers come able and help win all just here. to continue EchoPark Those If new want store, car a EchoPark. to big day see the big supply, on markets, win to things had continue to working is themselves going going a just

Operator

Morgan. Next question J. P. from Rajat is coming Gupta from

Rajat Gupta

EchoPark car dealers did I do the on EchoPark. of for put volumes a we just like to due pretty surprised grosses. supply? around there, point curious used numbers good I'm had quick up not CarMax, I not fourth quick lack just just And younger some have a Was it happening for And else why have But better. car see I at that Anything independent mean inventory, hurting some quarter. liquidation December. of peers strength November, more Carvana, to see like the that can I just your you I was follow-up comments like the appreciate to? the follow-up.

Frank Dyke

where in that with were. There's think for mean, inventory than think X%, bit there's bit happen in I basis, to that second Rajat. the stores It grow similar from we from opportunity and be could at Look, us. franchise and little more a would volume little things ballpark, be a some along third that, perspective, the have they a we same-store beginning us year right similar that look, focus projected done we'll that I quarter. We of grew first first an somewhere of took at marketing overaged our differently. a fourth wasn't of kind And X%, the I on fourth a very would bad quarter. were. still and very The see

wasn't we should at aging we in said, but said, a on a quarter. that Tim day, first quarter the nice And had really inventory got little minute inventory, rolling And the what bad see. we we're quarter, and be that, for a end a that as as slowdown of of us. or aged or focused a for cleaned ago up. first we'll which So the bit It caused is potential the

Rajat Gupta

on services. helpful That's a And and clarification. parts follow-up it. Got it. Got just then

I XXXX, benefit in that like get half took It expected technicians hiring the increasing a You've of XXXX. more that the you at of in the again XXXX. second great like would to in have you're to least technician job going looks add XXXX. done count full place

some have much is I and from CDK part? around CDK just your be conservatism higher, You the comps? curious XQ, in some easy comparisons would in have technicians just all I XQ. given dynamics mid-single-digit to growth that like was expected just guide these

David Smith

goes do that. growth fourth see, We you carries Well, the I is through, off at to quarter. And that look, said what paying the going mean, the when to guiding there, to is of we've we about I'm you we've kind you I year can operations. If upside. had day, digits mid-single on. tougher amazing end the right as in kind January than going it's of the but get saw bat give look But we're to but we're yeah, off. very accurate, them we're at not does all, fixed keep an everything There's going you a to, just the got have got really and what fixed that in what technicians year better probably plans as there's no number of hired, that. excited question we're Rajat. in The little to that projecting. it place of be

half you So bit fourth get tougher quarter it first because the first nice second But operations really 'XX. will little in quarter, the some maybe strength see were fixed a of growth in third quarter quarter, a from quarter, we should full perspective. at of fourth

Heath R. Byrd

technicians, that not the annualized in going do all operations profit is but to we going it's through the from be take they're And $XXX add Rajat, I to get going to to want to up year. we're level, fixed Heath. believe million just those this gross

helping million third in offset fourth from once that in and But fully is better mature perspective. you So a is the that and some better, -- that number $XXX see comp place. quarter getting difficulties they're and the a of should

Operator

from Next question Jordan Jefferies. is coming from Bret

Bret Jordan

isn't time would be the Powersports because wouldn't I you guess, be they there? I to about, what tough as big it and is buying that now you -- there? be Like mean, now, the see case? how right not how on is cheaper cycle piling space talk you could is it segment And sort in given Could of the good a that or the here TAM really be?

Frank Dyke

our deals Now the worth dipping that toe we're people their of think in kind more. are water,

things to up we're heads grow ] this have We show in being got hopeful in spend Typically, point fourth doing prudent during bring be very being I of We've go And really Wild now. These We're doing. one great this that extra XXX is can see us really the do We're a is the in all to us. playbook acquisitions. the important we them to same going different accounts great and going that to million hopeful direction so motorcycles the is and think that. dollars We And business, the playbook even maturing not at better. think are rally, to our bit another of going opportunities. very that an quarter get I the we this but we're umbrella good made West do doing to or of operating the Sturgis getting the get learning revenue execution [ that ways And fan around Sturgis. quarter. point Wild, our a that but to over is Probably in really in a got a cautious Sturgis would acquisition that great. That's we is ad in for fan XXX, we're some that's we're of for got to we or chart that execution. are for -- stores small some team see. year greater. that ad what like and things two with We'll under lift, this them year. and in Harley-Davidson -- year, We're and of in a significantly adding add how to which a that's on

David Smith

it business core -- It's to a one getting to that priorities, David. think of mind those Powersports, we're our there, anybody and gotten our don't we business, to takes dollars important keep is We've our and list we think is opportunity got EchoPark franchise else. which and our but the we're this right? distracted we've great something where in there's that And want with Yeah. big focus grow a into business

Bret Jordan

Okay. supply? And how take guess mix And returns. average up more lease just the can vehicle where year the to available age I have internally, on this of sort is I trough is those year about question picking $XX,XXX average then see Like Do in a you you need this you talk a mix much year is vehicle in EchoPark. about buy inventory mean cars direct EchoPark's talked the you of auction. do up versus sourced being being this to year?

Frank Dyke

Yeah.

So go our overall great. We which range. about like. we've percent know at $XX,XXX to of don't normal mix peak. We look We'd moved from it of it XX% was what like post-COVID know mix, our to $XX,XXX the XX-plus overall lower. see our is

and $XX,XXX where $XX,XXX it and a between to sweet somewhere is So that's spot, we're for go. looking

David Smith

we of and having there being XX much to there. at We the inventory don't have. little 'XX, too in bit third in and I that don't terms age, 'XX. did issue That's plenty year got we as -- that 'XX we though. have that an enough end need we in there's to to the change quarter proved a by I out of mix but that not of inventory stores our aggressive do think support think We've

better, improvements going into X- affordability back get X-year-old weren't making to able you throughout as little that play this to 'XX patient, not the handle at X hand that's and we category make We're we're money. concerned only And forward. If I gets that's and operational move the better very look really lease we're 'XX at year. returns to a EchoPark, year, really things about think in and it's buy to thing. particular, these our stores next all money. if or So start come to similar to as being support, with in going just in more

for to XX% to execute volume, XX%, to prep guided and beginning a ballpark little do to really somewhere open well really in stores we ourselves in continue think in I that EBITDA, more 'XX.

Operator

coming from question Jeff is from Next Lick Stephens.

Jeffrey Lick

your to ask or maybe wanted kind a EchoPark. bridges franchise I together and of question that business brings

XQ due EchoPark, -- business sustainable curious First much then through? And how surprised was do to part kind as think mean, the how pent-up it wondering relates is, how was I franchise, of and you just XQ? of new you I demand I to XQ think much I from guess the that's little Like going as better. given this have much new do a environment, I XQ might could business, And you an new like affordability look and to been little too and issue. have first for seems if inventory was quarter availability the was a affordability hear availability where the the guess, I it was at

I'm wondering there's where just relationship some there if maybe some So there's substitutes.

relationship and could XXXX So to unique do was means comment just just that if you new it relates XQ you how the think EchoPark? what as on for on the side then and

Frank Dyke

The to and BMW to on, always have all inventory I our what's XX% it increases, can QXs. on that of go. some from come to December, out further on car we're last couldn't back And to the if there's on XX Nissan, correlation type over seeing inventory. And day we sales right just doing, a know XX stores. and we watch berserk. there's QX. December mean X the open that's back go needs to would next I EchoPark. luxury just I days on which QX demand of down XX We our some their in of we're going don't comes a stop to all Like come coming the the or X But to trigger plenty and have manage supply pricing. and seeing bailiwick. out XX XX it pre-COVID like it EchoPark mix, Probably street, on well a our before lot unable those big to it's is darn mostly of and into for mix, off XX% the I buy don't I But just happens still buy there's down correlation just our of vehicles prices mix. inventory. pent-up as months We're the there. said, now, brands which of going probably enough XX comes a stores think then that want new down. buying been to now because side. go for supply overall down, Stellantis, side. It's the first correlation Affordability but mostly it the auction, we I of what pull the trades, between franchise different and to we sell here we can something from inventory mix, That's X we do trades location cars, draw

David Smith

being I it David. think, definitive think I people transportation. on think decisions into year, is having some that, answer I This an about just election making also their that played

Jeffrey Lick

And maybe just senior a [indiscernible] then given on. follow-up, Great. you team quick

at and of is look a times, could the everyone that peers. that's think put close of I'm you a showed gap? years, lot a think -- than case fascinating to things gap. good but and on it you And the One an of what like bit you when guys public this of throughout curious the maybe seems a ticker about if as you give seem that point, maybe how symbols it's little do is the just results you to Because that trade blindfold people at do always results, discounted better other unwarranted multiple. the didn't the you your and some or

David Smith

ahead. Go

Frank Dyke

saying We're plugging the strong we what a sees. volume quarter, We quarters. The and continue year-over-year, and heads scratch look you well, mean the process. just if fourth level. year-over-year the going and the plays leads appreciate at say, strong big I to have our are our you had all the confidence. increase increase the performance really thought head, right? we heck our It and Street away, high keep scratch the have was to keep new report and a pre-owned of missing I mean that EchoPark you to operations a certainly in segments great a on we going business, I But you certainly was weight your fourth look at nice mothership mean, we new numbers, I know does. time at fixed a quarter. executing when everybody's written I us, sort

our never our have customer in been We scores. satisfaction better CSI,

so We We're never been more green. have green.

the KPIs You our manufacturers. from us our moon, heard can in of I've terms with see

to we are expect a else see of just stock in price good to growth what grow. to the the in and what point has expect grown. that. I see, out price we're many for time company's green there. continue history, We do positions had of stock great catch dealerships. at And out one sitting some to best, in on said time We're in And everybody we great no we in too. think, exactly that's question. We our of year We're really it this so buy first to because you to look, go going just our There's seat. And a

David Smith

some Jeff, anybody point I'll a And going just add as float standpoint, well obviously, on Jeff, investors. more it. as from to know And is, impact one you this is technical the

a in well. trades lot plays And think so as to that how our I stock

Jeffrey Lick

Well, wood controlling just in you chopping XXXX. and Great. listen, Best control. can what luck of keep

David Smith

what we every exactly say That's day.

Operator

from is from Chris Company. & Pierce next Our Instructions] Needham question coming [Operator

Christopher Pierce

aged is to chew kind the more kind of cite off stores board and you bait? newer where you that's had of inventory some at at you EchoPark, can or your On bit of cut the across you it is that

Frank Dyke

driven way third adjustments to having and the into us short demand overforecasting both, the It's from to a that of and quarter the little perspective, but mainly quarter the my in the up in at we that kind make fourth little the the wanted. a bit end carrying fell wake of first quarter

Christopher Pierce

would frame oldest markets think Are the then And they third-party as markets on to CarMax data grow was how it or referred are usual? okay. that's I markets? business seeing anything? as units. it's in Like Denver, you would that say Carvana you you older your concern and anything your earlier, in like in Okay, what of your seeing you older

Frank Dyke

mean, we're I Denver, No. especially still #X.

from it than people made the us. progress, they're other have other Some Carvanas world of some taking but

David Smith

Yeah.

are real that think, that's wildly we're largest state, oldest looking markets and Our pre-owned the I dealer Denver In rent the real, profitable, the in and and that for. we're stable. it's market, repeat

Christopher Pierce

as quarter, sense want it's -- frame lastly, second if I get And you -- units were the hood what's driving 'XX? far that's look about the staffing EchoPark same but the million versus quarter. up And that at increased under the think we the going Like on second as would just to versus kind Okay. in $X how of how you SG&A? about of should SG&A, just a

Danny Wieland

quarter down I sequentially $X little think Danny. million from -- quarter. on basis. an third a up is adjusted about million the we're this up the bit versus about $X And We're second

in too. there property So on sales related some to periods, noise was gains prior

looking trend. in So expense up is that SG&A when that think expansion maybe about the to adjusted may you ratio, $XXX the lost gross. into delta. And quarter range at at you're headwind the the the by the gross, look that side, got really, front-end Chris, XX.X% to less on close the driven I And the out fourth thought, be that just to about primarily the gross more numbers

Operator

I'd back end to the or session. our closing comments. for of reached any like over We've floor question-and-answer turn further the

David Smith

much, very to will Thank Great. quarter. and next you. you Thank we everyone, talk you

Operator

Thank does teleconference conclude webcast. and you. today's That

You time, this today. day. may and participation thank your line a wonderful for at your have We you disconnect

Sonic Automotive (SAH) 12 Feb 252024 Q4 Earnings call transcript