AutoNation, Inc. has recently released its 10-Q report, providing a detailed look into its financial performance for the first quarter of 2025. AutoNation, Inc. operates as one of the largest automotive retailers in the United States, with 322 new vehicle franchises from 244 stores located in major metropolitan markets in the Sunbelt region. The company offers a wide range of automotive products and services, including new and used vehicles, automotive repair and maintenance, wholesale parts and collision services, and automotive finance and insurance products.
In the first quarter of 2025, AutoNation reported net income of $175.5 million and diluted earnings per share of $4.45, compared to net income of $190.1 million and diluted earnings per share of $4.49 during the same period in 2024. The company's total gross profit increased by 2% during the first quarter of 2025 compared to the same period in 2024. This increase was driven by improvements in finance and insurance gross profit of 5%, used vehicle gross profit of 12%, and parts and service gross profit of 2%. However, new vehicle gross profit experienced a decrease of 11% during the same period.
New vehicle sales accounted for 49% of AutoNation's total revenue and 14% of its total gross profit for the first quarter of 2025. Used vehicle sales contributed 29% of the total revenue and 10% of the total gross profit, while the parts and service operations made up 17% of the total revenue and contributed 47% of the total gross profit. Finance and insurance sales accounted for 5% of the total revenue and contributed 29% of the total gross profit.
AutoNation reported a 6% increase in retail new vehicle unit sales, with 62,387 new vehicles sold in the first quarter of 2025 compared to 58,863 in the same period in 2024. However, the company experienced a slight decrease of 1.6% in retail used vehicle unit sales, with 68,000 used vehicles sold in the first quarter of 2025 compared to 69,121 in the same period in 2024.
The company's new vehicle inventory units at the end of March 31, 2025, totaled 39,300, showing a slight increase from 38,200 at the end of March 31, 2024. AutoNation monitors its vehicle inventory levels based on current economic conditions and seasonal sales trends. The company also reconditions the majority of used vehicles acquired for retail sale and capitalizes the related costs to the used vehicle inventory.
AutoNation's financial statements are prepared in conformity with U.S. generally accepted accounting principles, which require the company to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the reported amounts of revenue and expenses during the reporting period. The company evaluates its estimates on an ongoing basis, and these estimates are based on historical experience and various other assumptions. Goodwill for the reporting units is tested for impairment annually, and the company is scheduled to complete its annual goodwill impairment test as of April 30, 2025.
The market has reacted to these announcements by moving the company's shares 1.0% to a price of $175.09. Check out the company's full 10-Q submission here.
