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AutoNation Reports Decrease in First Quarter Earnings

AutoNation, Inc. has recently released its 10-Q report, providing a detailed insight into its financial performance for the first quarter of 2024. The company operates as a prominent automotive retailer in the United States, owning and operating 347 new vehicle franchises from 251 stores located predominantly in major metropolitan markets in the Sunbelt region. AutoNation offers a wide range of automotive products and services, including new and used vehicles, automotive repair and maintenance, wholesale parts, collision services, and automotive finance and insurance products.

In the first quarter of 2024, AutoNation reported net income of $190.1 million and diluted earnings per share of $4.49, as compared to net income of $288.7 million and diluted earnings per share of $6.07 during the same period in 2023. The total gross profit decreased by 6.9% during the first quarter of 2024 compared to the first quarter of 2023, driven by decreases in new vehicle gross profit of 31.7% and used vehicle gross profit of 27.8%. New vehicle sales accounted for 46% of the total revenue and 16% of the total gross profit, while used vehicle sales accounted for 31% of the total revenue and 9% of the total gross profit. Parts and service operations, comprising 18% of the total revenue, contributed 46% of the total gross profit, while finance and insurance sales, comprising 5% of the total revenue, contributed 28% of the total gross profit.

AutoNation's new vehicle inventory units at March 31, 2024, were 38,185, compared to 21,176 in 2023, and its used vehicle inventory balance was net of cumulative write-downs of $6.5 million at March 31, 2024, and $12.2 million at December 31, 2023. The company also reported that the U.S. industry retail new vehicle unit sales increased approximately 5% in the first quarter of 2024 compared to the first quarter of 2023. However, new vehicle inventory levels continued to increase during the first quarter of 2024 due to higher levels of manufacturer vehicle production, impacting new vehicle unit profitability.

AutoNation's revenue for the first quarter of 2024 was $6,485.7 million, representing a 1.4% increase from the same period in 2023. The company's gross profit mix percentages for the first quarter of 2024 were as follows: new vehicle (16.4%), used vehicle (9.3%), parts and service (46.4%), and finance and insurance (27.9%). Additionally, the company's operating income as a percentage of revenue was 5.2% in the first quarter of 2024, compared to 6.9% in the same period in 2023.

These figures provide a comprehensive overview of AutoNation's financial performance and its position in the automotive retail industry, offering valuable insights into its operations, market conditions, and inventory management. As a result of these announcements, the company's shares have moved 5.9% on the market, and are now trading at a price of $169.88. Check out the company's full 10-Q submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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