Sonic Automotive Posts Mixed Q4 Results, Shares Dip in Premarket
Sonic Automotive Inc-Class A (NYSE:SAH) reported financial results for the fourth quarter and full year ended December 31, 2025, delivering a performance that narrowly missed revenue expectations while slightly exceeding adjusted profit forecasts. The market's initial reaction was negative, with shares trading down approximately 1.2% in pre-market activity.
Earnings and Revenue Versus Estimates
The company's fourth-quarter results presented a nuanced picture when measured against Wall Street's expectations. While profitability on an adjusted basis came in ahead of estimates, top-line growth fell short.
- Revenue: Total revenues for Q4 2025 were $3.87 billion, a 1% decrease compared to the prior year period. This figure came in below the analyst consensus estimate of approximately $3.99 billion.
- Earnings Per Share (Adjusted): The company reported adjusted earnings per diluted share of $1.52, which represents a 1% year-over-year increase. This result slightly surpassed the analyst estimate of $1.51 per share.
For the full year 2025, Sonic Automotive achieved record total revenues of $15.2 billion, a 7% increase, and record total gross profit of $2.4 billion, up 9%. On an adjusted basis, full-year net income rose 17% to $229.2 million, with adjusted EPS climbing 18% to $6.60.
Market Reaction and Segment Performance
The pre-market decline suggests investor focus may be on the revenue miss and a broader assessment of the quarter's dynamics. The earnings release highlighted a challenging environment for new vehicle sales but notable strength in other, more profitable areas of the business.
The company operates through three primary segments, each showing distinct trends:
- Franchised Dealerships: Segment revenues were flat year-over-year at $3.4 billion, though gross profit reached a Q4 record of $535.8 million, up 4%. Same-store new vehicle unit sales declined, but this was partially offset by growth in used vehicle sales and fixed operations (service and parts).
- EchoPark (Used Vehicles): This segment showed significant improvement in profitability despite a 5% drop in revenue. EchoPark recorded a segment income of $3.6 million, a substantial improvement from a $2.6 million loss in Q4 2024, and achieved a record quarterly adjusted EBITDA of $8.8 million, up 110%.
- Powersports: The smallest segment posted record fourth-quarter revenues of $36.4 million, up 19%, and record gross profit of $9.4 million, up 25%.
Outlook and Forward Estimates
The company's press release did not provide specific quantitative financial guidance for the coming year. Management commentary emphasized disciplined execution, cost control, and a strong balance sheet with over $700 million in available liquidity.
Analysts currently have estimates in place for the upcoming periods. For the full year 2026, the consensus sales estimate stands at $15.84 billion. For the immediate next quarter (Q1 2026), analysts are projecting revenue of approximately $3.82 billion.
Summary of Key Press Release Elements
Beyond the headline numbers, the earnings report underscored several critical points:
- Profitability Focus: The company demonstrated an ability to grow gross profit (up 4% in Q4) even amid a slight revenue decline, pointing to effective operations and mix management.
- EchoPark Turnaround: The dramatic year-over-year profit improvement in the EchoPark segment is a notable positive, suggesting the company's strategy for its used vehicle business is gaining traction.
- Shareholder Returns: Sonic remained active in returning capital, repurchasing $38.3 million worth of shares in the quarter and declaring a quarterly dividend of $0.38 per share, a 9% increase from the prior year's Q4 dividend.
- One-Time Items: Reported GAAP earnings were significantly impacted by various non-recurring charges and benefits in both 2025 and 2024, making the adjusted figures more reflective of ongoing operational performance.
For a detailed breakdown of past earnings and future analyst estimates for Sonic Automotive, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
