AutoNation’s Q3 results stalled by CDK hangover, sagging used-car performance
In reporting its third quarter financial results Friday, AutoNation sang the second verse of a similar song from Q2.
Revenues, gross profits and net income were all down year-over-year, in part because the residual effects of the CDK Global outage in June carried over into the beginning of Q3 in July.
In AutoNation’s Q2 earnings call, CEO Mike Manley said the June 19 cyberattack on CDK, which shut down the software provider’s systems for two weeks, impacted “virtually all our business processes.”
The issues caused by that massive disruption continued into Q3.
By the numbers, AutoNation generated $6.6 billion in revenue for the three months ending Sept. 30, down 4% from Q3 2023, while gross profit fell 9% to $1.2 billion and net income sank 24% to $186 million. Adjusted net income of $162 million was down 33%.
Still, Manley called the company’s Q3 results “solid.”
“We were able to navigate through a challenging environment, which included the lingering effects of the CDK outage — which we are relieved to now have behind us — weather challenges and OEM stop-sale orders,” he said. “Looking ahead, we remain focused on shareholder returns, are encouraged by the moderating interest rates and OEM support actions, and are committed to delivering a strong close to the year.”
What success AutoNation had in Q3 was driven by its new-car and after-sale operations, as used cars lagged behind.
While new-vehicle unit sales were up 2% YOY on a same-store basis and after-sale reported a record $558 million gross profit, used vehicle revenue dropped 12.5% and gross profit was down 16.6% as unit sales declined by 8% and gross per vehicle retailed decreased from $1,746 a year ago to $1,589.