Earnings call transcript: Sonic Automotive Q2 2025 sees 49% EPS surge

Sonic Automotive (SAH) reported a significant increase in its Q2 2025 earnings, with adjusted earnings per share (EPS) rising by 49% year-over-year to $2.19. The company’s consolidated total revenues set a quarterly record, increasing by 6% from the previous year to $14.7 billion. The stock price responded positively, climbing 6.05% to close at $71.86, reflecting investor confidence in the company’s performance and strategic initiatives. According to InvestingPro analysis, the stock currently appears overvalued compared to its Fair Value, despite showing strong financial health with an overall score of "GOOD" and maintaining dividend payments for 16 consecutive years.

Key Takeaways

• Adjusted EPS increased by 49% year-over-year.
• Consolidated revenues reached a quarterly record, up 6%.
• EchoPark segment income hit an all-time high of $11.7 million.
• Stock price rose by 6.05% following the earnings announcement.

Company Performance

Sonic Automotive demonstrated robust performance in Q2 2025, with significant growth in both its franchise and EchoPark segments. The company’s focus on expanding its luxury brand portfolio and modernizing its Power Sports business contributed to these positive results. Additionally, the acquisition of four Jaguar Land Rover dealerships in California and strategic inventory management at EchoPark played key roles in driving growth.

Financial Highlights

• Revenue: $3.1 billion in the franchise segment, a 6% increase from the previous year.
• Earnings per share: $2.19, a 49% year-over-year increase.
• Consolidated gross profit grew by 12%.
• Consolidated adjusted EBITDA rose by 22%.
• EchoPark adjusted EBITDA surged by 128% year-over-year to $16.4 million.

Outlook & Guidance

Sonic Automotive raised its EchoPark EBITDA guidance to $50-$55 million, reflecting confidence in continued growth. The company also increased its quarterly cash dividend by 9% to $0.38 per share, maintaining its impressive track record of raising dividends for 4 consecutive years. With a current dividend yield of 2.1% and a strong dividend growth rate of 26.7% over the last twelve months, the company demonstrates solid shareholder returns. While cautiously optimistic about the used vehicle market, Sonic Automotive anticipates improved lease returns between 2026 and 2028.

Access the complete Pro Research Report and detailed financial analysis for SAH and 1,400+ other US stocks through InvestingPro.

Executive Commentary

David Smith, CEO, emphasized the importance of strong relationships with teammates, guests, and partners as a foundation for future success. Jeff Dyke, President, highlighted the exceptional performance of EchoPark, noting its ability to manage volume and profit effectively.

Risks and Challenges

• Potential tariff-driven price increases could impact vehicle pricing.
• Volatility in the used vehicle market presents ongoing challenges.
• Economic pressures and supply chain disruptions may affect future performance.

Q&A

During the earnings call, analysts inquired about the impact of tariffs on vehicle pricing and the company’s inventory management strategy. Sonic Automotive addressed these concerns by detailing its approach to maintaining flexibility and optimizing gross profit margins. Additionally, the company discussed its strong F&I performance and expectations for used vehicle gross profit per unit (GPU).

Overall, Sonic Automotive’s Q2 2025 results reflect a strong performance driven by strategic initiatives and market positioning, with a positive outlook for future growth.

Full transcript - Sonic Automotive Inc (SAH) Q2 2025:

Conference Operator: Good morning and welcome to the Sonic Automotive second quarter 2025 earnings conference call. This conference call is being recorded today, Thursday, July 24, 2025. Presentation materials which accompany management’s discussion on the conference call can be accessed at the company’s website at ir.sonicautomotive.com. At this time, I would like to refer to the Safe Harbor Statement under the Private Securities and Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information or expectations about the company’s products or market, or otherwise make statements about the future. Such statements are forward looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company’s filings with the Securities and Exchange Commission.

In addition, management may discuss certain non-GAAP financial measures as defined by the Securities and Exchange Commission. Please refer to the non-GAAP reconciliation tables in the company’s current report on Form 8-K filed with the Securities and Exchange Commission earlier today. I would now like to introduce Mr. David Smith, Chairman and Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference.

David Smith, Chairman and CEO, Sonic Automotive: Thank you very much and good morning everyone. Welcome to the Sonic Automotive second quarter 2025 earnings call. I’m David Smith, the company’s Chairman and CEO. Joining me on today’s call is our President, Jeff Dyke, our CFO Heath Byrd, our EchoPark Chief Operating Officer, Mr. Tim Keen, and our VP of Investor Relations, Danny Weiland. I would like to open the call by sincerely thanking our amazing teammates for continuing to deliver a world-class guest experience for our customers. We believe our strong relationships with our teammates, our guests, and manufacturer and lending partners are key to our future success, and as always, I would like to thank them all for their continued support and loyalty to the Sonic Automotive team.

Turning now to our second quarter results, primarily as a result of a non-cash charge relating to our annual franchise asset impairment testing, reported GAAP EPS was a loss of $1.34 per share. Excluding these non-cash impairment charges and the effect of certain other items, as detailed in our press release this morning, adjusted EPS for the second quarter was $2.19 per share, which was a 49% increase year over year. Consolidated total revenues were a second quarter record, up 6% year over year, while consolidated gross profit grew 12%. Consolidated adjusted EBITDA increased 22%. Moving now to our franchise dealership segment results, we generated second quarter record franchise revenues of $3.1 billion, up 6% year over year on a same-store basis. This revenue growth was driven by a 5% increase in same-store new retail volume and a 10% increase in same-store fixed operations revenues.

Second quarter results benefited from an increase in consumer demand and new vehicle sales in April and early May, which we expect was the result of customers buying in advance of anticipated tariff-driven price increases. Our fixed operations gross profit and F&I gross profit also set all-time quarterly records, up 12% and 15% year over year respectively on a same-store basis. These two high-margin business lines continue to increase their share of our total gross profit pool, approaching 75% of total gross profit for the second quarter, mitigating the potential tariff impact on vehicle pricing and margin to our overall profitability while also leveraging our SG&A expenses more efficiently than vehicle-related gross profit. Our same-store new vehicle GPU was $3,391, down 6% year over year but up 10% sequentially from the first quarter due to a surge in pre-tariff consumer demand.

On the used side of the franchise business, same-store used volume decreased 4% year over year, driven by lower supply of late-model used vehicles and ongoing consumer affordability challenges. Same-store used GPU increased 2% sequentially to $1,590 per unit. Our F&I performance continues to be a strength, with all-time record quarterly franchised F&I GPU of $2,721 per unit in the second quarter, up 12% sequentially and 14% year over year. The continued growth in our F&I per unit supports our view that F&I per unit will remain structurally higher than pre-pandemic levels even in a challenging consumer affordability environment as we continue to fine-tune our F&I product offerings and cost structure. Our parts and service, or fixed operations, business remains strong with a 12% increase in same-store fixed operations gross profit in the second quarter.

Same-store warranty gross profit continued to be a tailwind in the second quarter, up 34% year over year, and same-store customer pay gross profit grew 9% year over year and 7% sequentially. We believe this continued strength in customer pay revenues is attributable to the increase in technician headcount we achieved in 2024 and our efforts to not only retain these technicians but to continue to grow our technician capacity in 2025. Turning now to our EchoPark segment, second quarter segment income was an all-time quarterly record $11.7 million, and adjusted EBITDA was an all-time quarterly record of $16.4 million, up 128% year over year. For the second quarter, we reported EchoPark revenues of $509 million, down 2% year over year, and second quarter record EchoPark gross profit of $62 million, which was up 22% year over year.

EchoPark segment retail unit sales volume for the quarter increased 1% year over year, and EchoPark segment total GPU was an all-time quarterly record of $3,747 per unit, up $669 per unit year over year and $336 sequentially from the first quarter. We continue to believe that our data-driven centralized inventory management strategy is a key differentiator for EchoPark, which should help to minimize disruptions from market volatility in the short term while maximizing EchoPark’s long-term growth potential. When combined with the strategic adjustments we made to our EchoPark business model, we believe we are well positioned to resume disciplined long term growth for EchoPark in 2026 assuming used vehicle market conditions sufficiently improve. Turning now to our Power Sports segment, we generated record second quarter revenues of $48.1 million, up 21% year over year, and second quarter gross profit of $12.5 million, up 17% year over year.

Power Sports segment adjusted EBITDA was $2 million, down 13% year over year, but beginning to ramp up ahead of what is typically a seasonally strong third quarter. We are beginning to see the benefits of our investment in modernizing the Power Sports business, and we remain focused on identifying operational synergies within our current network before deploying capital to expand our Power Sports footprint. Finally, turning to our balance sheet, we ended the quarter with $775 million in available liquidity, including $210 million in combined cash and floor plan deposits on hand. Our focus on maintaining a strong balance sheet and liquidity position allowed us to complete the acquisition of four Jaguar Land Rover dealerships in California using cash and floor plan deposits on hand, and I’d like to take this opportunity to welcome these teammates to the Sonic Automotive family.

This acquisition closed on June 30, so there was no impact to our second quarter results, but we do anticipate these stores will contribute approximately $500 million in annualized revenues to our franchise dealership segment and make Sonic Automotive the largest Jaguar Land Rover retailer in the U.S., further enhancing our luxury brand portfolio. Going forward, we remain focused on deploying capital via a diversified growth strategy across our franchise dealerships, EchoPark, and Power Sports segments to grow our revenue base and enhance shareholder returns. In addition, I’m very pleased to report today that our Board of Directors approved a 9% increase to our quarterly cash dividend to $0.38 per share, payable on October 15, 2025, to all stockholders of record on September 15, 2025.

As we told you back in April, we continue to work closely with our manufacturer partners to understand the impact of tariffs on manufacturer production and pricing decisions and the resulting impact tariffs may have on vehicle affordability and consumer demand later this year. To date, we have not seen a material impact on vehicle pricing as a result of tariffs, but that could change as the model year 2026 vehicles begin to arrive at our dealerships late in the third quarter. Despite this uncertainty, our team remains focused on near-term execution and adapting to ongoing changes in the automotive retail environment and macroeconomic backdrop while making strategic decisions to maximize long-term results. Furthermore, we remain confident that we have the right strategy, the right people, and the right culture to continue to grow our business and create long-term value for our stakeholders.

This concludes our opening remarks and we look forward to answering any questions you may have. Thank you.

Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today comes from Jeff Lick of Stephens Inc. Please proceed with your question.

Good morning, gentlemen.

Jeff Dyke, President, Sonic Automotive: Congrats on a great quarter again.

David Smith, Chairman and CEO, Sonic Automotive: Thank you. Thank you.

Jeff Dyke, President, Sonic Automotive: Morning.

I was wondering, look, there’s a lot of cross currents and noise in 2Q. Obviously, the beginning of the quarter maybe looks a little different than the exit. You have some tariff deals. I’m just curious of the things, what.

Surprised you the most?

What are you pleased with the most? As we kind of head into the back half, what are the things you think are kind of indicative of how the back half will go versus you might say to the analyst community, hey, those particular metrics, I’d be cautious with those and don’t read too much into them.

Hey, Jeff, it’s Jeff Dyke. Yeah, I mean, obviously the first part of the quarter took off due to the tariff noise. It did slow down at the end of June and was slow a little bit the first week or two of July. What is surprising a little bit is the business. The back half of July is picking up nicely. We’re going to have a great July and that’s not something that we really anticipated. We thought it would be more average given all the noise with the tariffs. Obviously the Japan deal is going to help. We need to secure something with the EU, but that’s a surprise. I’m very proud of our F&I performance. We’ve worked very hard to increase our product penetration above the 2 and we’ve worked very hard on reducing cost with our partners that provide the products.

The combination of those things has really driven, as you can see in the quarter, a nice, nice increase. We expect that increase to continue. The $2,700 number is a number that feels good for us moving forward from a franchise perspective for the rest of the year. Obviously we’re very, very proud of the work that we’ve done at EchoPark. EchoPark is just on fire, selling a lot of cars. A little more margin pressure I think in the third quarter than we might anticipate and maybe the back half of the year. We’re hitting all of our expectations. Obviously the profit’s great and that’s putting us in a position to really begin to expand EchoPark as we move into 2026.

David Smith, Chairman and CEO, Sonic Automotive: This is David. I think that it’s important to emphasize that our EchoPark stores still have a lot of runway left, a lot of performance increases to go yet in our current store base. I think that’s exciting and our team did obviously an outstanding job. Another point to note is that our Power Sports business again is a seasonal business and we are very excited that coming up next month is our 85th annual Sturgis Motorcycle Rally, the 85th anniversary. We’re expecting as many as 800,000 people will come out there for that, and we’re expecting some huge numbers to report on that in the next quarter.

Jeff Dyke, President, Sonic Automotive: Just a quick follow up.

I’m curious your thoughts on the lease return kind of trough this year versus next year. I don’t want to say it’s going to be a boom, but it should be hard for it not to be considerably better than this year. Curious how that ripples through both in your franchise business and EchoPark.

Yeah, that’s huge. I mean, we are at the bottom, at the bottom of this now. Obviously, as lease returns pick up, that makes a huge difference in our used vehicle inventory. Our ability to grow our volume makes it a lot easier to access inventory. It’s going to make a difference in 2026. There’s no question it’ll help EchoPark as well. As we get into 2027 and 2028, it really gets back to the pre-pandemic levels and that is a game changer from an EchoPark perspective. It does help our franchise business, there’s no question, but it allows EchoPark to have access to inventory that’s just really not as accessible. Right now we’re doing a great job buying more cars off the street. We’re hitting at times above 40% of our total mix off the street in trades, which is huge.

That’s double what we were doing last year.

The lease returns are going to make a big, big difference, and it’s just a honey hole that’s coming for us.

David Smith, Chairman and CEO, Sonic Automotive: Awesome.

Thank you very much and look forward to chatting with you later.

Jeff Dyke, President, Sonic Automotive: Thanks, Jeff.

Thank you.

Conference Operator: The next question is from Rajat Gupta of JPMorgan. Please proceed with your question.

Jeff Dyke, President, Sonic Automotive: Great.

Rajat Gupta, Analyst, JPMorgan: Thanks for taking the questions. I had one question on EchoPark, just one follow up on GP on EchoPark. If you look at just the volume trajectory in the second quarter, obviously GPUs were very strong. Is there an element here of trading off one for the other? Because we would have expected volumes to do better just relative to the industry seasonality. I’m curious if there is a bit of a change in approach or strategy as to how you want to grow overall EchoPark profits versus just like historically, you know, how you had wanted to grow the business and have a quick follow up.

Thanks.

Jeff Dyke, President, Sonic Automotive: We’re just being cautious in terms of the inventory management, and Tim can chime in here in a sec. Yeah, we’re being cautious in terms of how much inventory we’re buying and maximizing our margin. The total gross dollars is growing the bottom line. I would expect this to kind of continue for the rest of this year, kind of in this range in comparison to last year, somewhere in this ballpark. For us, I think we announced $50 to $55 million in terms of EBITDA for the year now, upping our guidance from $30 to $35 million. I think so, yeah, I think that’s right. It doesn’t mean there’s not more volume there. We’re just being real cautious and not going out over buying and making some of the mistakes that we see happening out there today. It’s not a concern for us.

We can turn up the volume when we want, but we’re just managing the gross and the profit in the volume. I think Tim and team are doing a great job. Tim, you want to add to that? Yeah, I mean, the second quarter we.

David Smith, Chairman and CEO, Sonic Automotive: Saw a fairly unstable MMR market going on.

Jeff Dyke, President, Sonic Automotive: The upside probably caused by the tariff scares as well.

David Smith, Chairman and CEO, Sonic Automotive: We managed through that very strategically, held onto our gross, did not buy up, kept day supply where we wanted it, and thought we managed through that well.

Jeff Dyke, President, Sonic Automotive: We will continue to do that through the rest of the year as we see opportunities.

Danny Weiland, VP of Investor Relations, Sonic Automotive: I think one more point. This is Danny, you know, if you look at the trend in SG&A at EchoPark, despite the fact that we saw that sequential step down in volume, the SG&A actually levered about 110 basis points from 1Q to 2Q. It just proves we’ve got some flexibility in the model based on the different contributions of gross via volume, front end gross or F&I, that we can adapt and flex over the next couple of quarters here as the used market becomes more of a tailwind for us.

Rajat Gupta, Analyst, JPMorgan: Got it. Yeah, it was nice to see the ESG step down dearly.

Jeff Dyke, President, Sonic Automotive: And then.

Rajat Gupta, Analyst, JPMorgan: Sorry, I had just one more on just F&I before the GPU question. You mentioned some of the changes in your agreements with the partners that drove the F&I increase. Curious if you could elaborate a bit more on that. Was it on the warranty side? Was it on the lending side? Was this something.

Jeff Dyke, President, Sonic Automotive: That was left.

Rajat Gupta, Analyst, JPMorgan: on the table like in the past? This is like more entitlement levels. Just curious if we could get a little more color on that.

Jeff Dyke, President, Sonic Automotive: Yeah, sure. This is Jeff, mostly on the product side. What we did was put RFQs out, RFPs out, and renegotiated all our positions. Our team did an amazing job. We’ve been doing that since maybe the end of last year to now, and that’s starting to really pay off. We’re saving a ton of money. We’ve been making our partners a lot of money selling their products. As we studied that and we looked at how much money they were making, we thought there was opportunity there for us to share in some of the dollars. That came to fruition. We’re hitting it. Not only are we performing better at the store level, but we’re also going out and reducing our costs. Those things are coming together at the same time, and that’s driving much higher penetrations. It’s driving better margin.

What’s great is if we don’t sell one more car or one more product, we’re making more money. That was a big focus for us, like technicians were the first half of last year. This has been a big focus for us the first half of this year, and it’s really beginning to pay off. We expect that to continue as we move forward.

Rajat Gupta, Analyst, JPMorgan: Got it, got it.

Jeff Dyke, President, Sonic Automotive: That’s very clear.

Rajat Gupta, Analyst, JPMorgan: Just lastly, on new GPU, just more housekeeping question.

David Smith, Chairman and CEO, Sonic Automotive: Any color you.

Rajat Gupta, Analyst, JPMorgan: Could you give us on how the different months of the quarter did on the new vehicle GPU, you know, April, May, June, how that trended? That would be helpful, thanks.

Jeff Dyke, President, Sonic Automotive: Yeah, GPUs in the beginning of the quarter were stronger than they were at the end of the quarter.

Rajat Gupta, Analyst, JPMorgan: As we mentioned.

Jeff Dyke, President, Sonic Automotive: Yeah.

David Smith, Chairman and CEO, Sonic Automotive: The demand spike that I talked about in our opening comments, with the anticipation of the tariffs coming in, people did absolutely rush out to buy.

Jeff Dyke, President, Sonic Automotive: Yeah, I mean, we’re 3,600 in that ballpark in April, maybe 3,250 in May and 3,300. It’s the end of the quarter, so we get some pickups and stuff in June. The front end margin for new is materially higher than what we even anticipated it to be for this calendar year. I think it’s going to stay in the same ballpark that we’ve been running. There’s not any reason for it to massively drop off, which is great. That’s a great tailwind for us for the remainder of the year.

Understood.

Rajat Gupta, Analyst, JPMorgan: Thanks for all the color and good luck.

Conference Operator: You bet.

David Smith, Chairman and CEO, Sonic Automotive: Thank you.

Conference Operator: The next question is from Chris Pierce of Needham & Company. Please proceed with your question.

David Smith, Chairman and CEO, Sonic Automotive: Hey, good morning, everyone.

Can you just go in deeper on Rajat’s question there?

If we look at front-end growth.

At EchoPark, I just want to remember.

Is that sort of a change?

Strategy or it’s due to certain market dynamics at this point in time? Because I noticed now you’re guiding to total vehicle GPU, not F&I GPU. I just want to get a sense of if it’s just a unique moment in time, you’re able to take advantage of that due to inventory, or if it’s sort of business as usual going forward.

Jeff Dyke, President, Sonic Automotive: Look, at the end of the day, we’re buying more cars off the street, and as we buy more cars off the street, margin’s going to go up. That 40% number I was talking about makes a big difference there. We do expect margin pressure in the third and fourth quarter. Used car inventory is moving around Mannheim. As Tim said earlier, the Mannheim indexes are moving around. A lot of that’s being played off just because of the tariffs. It’s going to be in and around the same ballpark. If there’s $50 or $100 worth of margin pressure, there is probably, you know, somewhere in that ballpark in total and should get better as we go towards the end of the year. There’s a little uncertainty out there right now, and we’ll see how that plays out. Not concerned in terms of the overall volume and the profitability.

That should continue to stay solid. That’s why we took our forecast up for the year.

David Smith, Chairman and CEO, Sonic Automotive: Okay, perfect. Chris, this is David Smith, and something to note is you remember our first EchoPark stores, we opened in 2014. If you look at our guest experience and our market penetration, in a lot of markets, we’re the number one used dealer in the market. If you look at our, we’ve got now over 100,000 five-star reviews. A big part of that is our, you know, GPU, I think, is our guest experience. Our repeat customers who are just choosing to buy from us again, we’ve had multiple sales to the same family. They tell us it’s the entire guest experience. I think that’s paying off for us. We have the number one rated guest experience in the industry.

Danny Weiland, VP of Investor Relations, Sonic Automotive: Chris, to your point, this is Danny on the total GPU shift in the guide away from the F&I piece. You’ve seen now for the last two quarters, we’ve improved our EchoPark F&I per unit by about $200 a unit, quarter over quarter, both in 1Q and in 2Q, and driven by some of the cost structure negotiations that Jeff was talking about. That gives us more flexibility in terms of the total gross profit equation for EchoPark. It’s something where if we face front end margin pressure, as Jeff, as Tim has said, in the coming quarters, the F&I gains help us maintain that kind of total $3,400 to $3,800 range, which is pretty comparable to what we make on our franchise side, despite the pricing differences at EchoPark.

Okay, perfect. Just kind of playing off of that, you had talked about the RFQs you put out there with your existing lenders. Are you seeing new lenders come to the auto loan market the way Carvana’s talking about finding new lenders? Is that causing sort of, I don’t want to say a power shift, but a dynamic shift where you’re able to have a little more pricing power? Or is this just leverage with existing lenders as you kind of grow the relationships and have these long standing relationships?

Jeff Dyke, President, Sonic Automotive: Yeah, and this is product providers that we’re talking about more along the lines of warranty and gap and those products that we sell, that’s where we’re getting the leverage. We’re not seeing a run of new lenders coming into the marketplace. Our margin that we’re making from financing is relatively the same. Where we’re getting our pickup is through product sales and the cost reductions that we’re seeing there. That’s just going back and really working hard. The team’s worked very hard on restructuring deals, still giving great wins to our partners, there’s no question, but sharing in some of the wins that they’ve had over the years, on the backs of our team working really hard to grow their business. We want to share in some of that. That’s what’s happening. You’re seeing our cost reduce, thus growing our margin, which is great.

Like I said earlier, we don’t have to sell another car, we don’t have to sell another product. We can keep the same numbers and have better results because of the work the team has done.

Okay, perfect. Just lastly for me, real quick, EchoPark unit guidance is unchanged, which implies maybe a little bit of a modest pickup in the second half. Not pickup, but in the sense of pickup. In terms of the growth you just printed at EchoPark units, is that driven by easier comps in the second half of the year or is that just some end market view?

Danny Weiland, VP of Investor Relations, Sonic Automotive: It’s a little bit of a combination of the two. If you were to look at the back half of 2024, there were some challenges, there were some pockets of consumer weakness on the used car side. It’s a combination of those two things, I think, as we look forward.

Jeff Dyke, President, Sonic Automotive: Okay, thanks for everything.

Danny Weiland, VP of Investor Relations, Sonic Automotive: Thank you.

David Smith, Chairman and CEO, Sonic Automotive: Thank you.

Conference Operator: As a reminder, if you would like to ask a question, please press Star one on your telephone keypad. Our next question is from Brett Jordan of Jefferies. Please proceed with your question.

Patrick Buckley, Analyst, Jefferies: Hey, good morning, guys. This is Patrick Buckley on for Brett. Thanks for taking our questions.

David Smith, Chairman and CEO, Sonic Automotive: Hey, Britt. Patrick on the franchise used GPU side.

Patrick Buckley, Analyst, Jefferies: With the first half settling a bit above the upper end of the 1,500 annual guide, should we expect some moderation into the second half, and what sort of headwinds could you be expecting there?

Jeff Dyke, President, Sonic Automotive: I think that we’re going to be in and around that number. It could be just a little bit like at EchoPark, July and August. We’re just not quite sure from a tariff perspective what’s happening. It’s putting day supply pressure, and manufacturers are acting a little quirky, trying to get us to take inventory and put inventory in loaner cars and do things that they had been getting away from. It might put a little pressure, but in and around that number, I feel comfortable. Yeah, the volume should be higher.

David Smith, Chairman and CEO, Sonic Automotive: Got it.

Patrick Buckley, Analyst, Jefferies: That’s helpful. I guess going off that, as you said, a lot of moving pieces with tariffs you have to shake out. Could you talk a bit about your expectations for new vehicle SAAR trajectory from here and expectations for second half and maybe the annual year?

Jeff Dyke, President, Sonic Automotive: I mean, your guess is as good as mine at the end of the day. In the quarter, we went from 17 to 15, so it’s all over the board. A 15, 16 million SAR kind of feels right, somewhere in that ballpark, you know, unless something else crazy happens and we get another pull ahead or something happens. Somewhere in that ballpark, interest rate drop, kind of our guess. Yeah, interest rates drop. That could change the game as well. We’ll just have to see. It’s somewhere in that ballpark.

Got it.

Patrick Buckley, Analyst, Jefferies: That’s all from us. Thanks, guys.

David Smith, Chairman and CEO, Sonic Automotive: Thanks, Patrick.

Conference Operator: There are no further questions at this time. I’ll turn the call back over to David Smith for closing comments.

David Smith, Chairman and CEO, Sonic Automotive: Thank you everyone for joining us for the call. We’ll speak with you next quarter. Have a great day.

Conference Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s teleconference. You may disconnect your lines and have a wonderful day.

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