Sonic Automotive (NYSE:SAH) reported record second-quarter revenue of $3.9 billion, up 8% from a year earlier, and all-time quarterly gross profit of $616.2 million, up 2%. Reported GAAP earnings were $1.79 per diluted share, while adjusted earnings were $1.82 per diluted share, Chairman and Chief Executive Officer David Smith said on the company’s second-quarter 2026 earnings call.
Smith said the company’s franchised dealerships, EchoPark used-vehicle business and Powersports operations all contributed to growth, while affordability pressures in the new-vehicle market continued to shape consumer demand and management’s operating strategy.
Franchised dealership results and margin outlook
New-vehicle gross profit per unit remained above the company’s previous full-year outlook. Sonic raised its full-year new-vehicle GPU guidance to between $2,850 and $3,000, from its earlier range of $2,700 to $3,000. Second-quarter reported new-vehicle GPU was $3,024, down 11% year over year, and same-store new-vehicle GPU was $2,872, down 16%.
President Jeff Dyke said the company has been willing to be more aggressive on front-end margins while maintaining inventory turnover, supporting unit volume and F&I results. Same-store new-vehicle volume was flat, in line with industry trends.
Used-vehicle demand at franchised dealerships was stronger. Same-store retail used-vehicle volume increased 7%, as Sonic cited improving supply and its strategy to increase used-vehicle throughput. The company’s long-term objective is to average 100 used retail units per dealership per month, which it said represents about 25% organic volume growth potential from current levels.
Management said used-vehicle GPU could decline in the second half as it prioritizes volume and total gross-profit generation. Second-quarter reported used-vehicle GPU was $1,399, down 12%, while same-store used-vehicle GPU was $1,401, down 13%.
Fixed operations remains central focus
Fixed operations gross profit rose 6% to a quarterly record of $263.8 million. Same-store fixed operations gross profit increased 2%, including a 1% increase in customer-pay gross profit and a 3% increase in warranty gross profit. Franchise dealership F&I gross profit increased 2% to a second-quarter record of $147.9 million, though same-store F&I gross profit declined 1% as F&I gross profit per unit fell 4%.
Fixed operations and F&I combined accounted for more than 75% of total gross profit during the quarter, Smith said.
Dyke described the industry’s fixed-operations growth as uneven in the second quarter and said Sonic is pursuing value pricing, marketing and improved customer awareness to capture service business from customers who do not return to dealerships for repairs. He said the company is focused on mid- to upper-single-digit fixed-operations growth, while CFO Heath Byrd pointed to potential efficiency gains from artificial intelligence initiatives.
Management maintained its outlook for mid-single-digit same-store fixed-operations gross-profit growth for the full year. The company also said consumers may retain vehicles longer amid affordability challenges, creating a longer-term service opportunity.
EchoPark volume accelerates as inventory mix changes
EchoPark revenue increased 15% to $582.9 million and segment gross profit rose 4% to a second-quarter record of $64.3 million. Retail used-vehicle volume increased 17% to 19,601 units, outpacing the broader used-vehicle market, according to the company.
EchoPark’s total gross profit per unit declined 12% to $3,292. Used-vehicle front-end GPU declined 21% to $328, while F&I gross profit per unit fell 11% to $2,965. Management attributed the declines largely to a greater mix of more affordable, higher-mileage vehicles and battery-electric vehicles, which carry lower service-contract penetration and profit per contract.
EchoPark Chief Operating Officer Tim Keen said carrying more inventory and maintaining a value position with lower-priced vehicles supported unit growth. Danny Wieland, vice president of investor relations, said non-auction sourcing represented 42% of EchoPark sales in the second quarter, up from 32% in the first quarter.
Management said EchoPark was running above 25% unit growth in July. The company continues to target full-year retail used-vehicle volume growth of 12% to 15% and total GPU of $3,100 to $3,300 per unit. It expects additional F&I offerings for electric and smaller-segment vehicles to support margins.
EchoPark generated segment income of $7.2 million and adjusted EBITDA of $13.9 million, remaining on track for its full-year adjusted EBITDA guidance of $35 million to $40 million. The company expects to open an EchoPark location in Orlando in the fourth quarter and two to four additional locations in 2027. Keen said the timing of openings is driven by construction schedules.
Powersports growth and capital allocation
Powersports revenue climbed 53% to a second-quarter record of $73.5 million, while gross profit increased 57% to $19.7 million. Same-store revenue and gross profit each rose 13%. The segment reported income of $2.3 million, compared with break-even results a year earlier, and adjusted EBITDA increased 145% to $4.9 million.
Smith said recently acquired Harley-Davidson dealerships in California, Florida, Georgia and North Carolina supported the segment’s growth. Management said the acquired locations were producing returns above expectations despite limited integration of Sonic’s operating approach.
At quarter-end, Sonic had approximately $676 million of total available liquidity, including roughly $294 million of cash and floor-plan deposits. Smith said the company sees acquisition opportunities in both franchised dealerships and Powersports, with management describing Powersports valuations as particularly compelling.
The board approved a quarterly cash dividend of $0.41 per share, payable Oct. 15 to shareholders of record on Sept. 15.
About Sonic Automotive (NYSE:SAH)
Sonic Automotive, Inc is a publicly traded automotive retailer that operates a network of franchised new-car dealerships and used-vehicle dealerships across the United States. Headquartered in Charlotte, North Carolina, the company offers a range of services that include vehicle sales, leasing, finance and insurance products, service and parts, and collision repair. Sonic Automotive’s dealerships represent numerous major automotive brands, and the company also markets a broad selection of pre-owned vehicles under its own banner.
In addition to its core dealership operations, Sonic Automotive has developed digital retail capabilities that allow customers to research, shop and complete transactions online.
