AutoNation, Inc. (AN) Bundle
A Brief History of AutoNation, Inc.
AutoNation, Inc., the largest automotive retailer in the United States, has undergone significant transformations since its inception. Founded in 1996, AutoNation has developed a robust network of stores across the country, focusing on both new and used vehicles, along with parts and services. By 2024, AutoNation has solidified its position as a leader in the automotive retail sector, adapting to market changes and consumer preferences.
Financial Performance Overview
As of September 30, 2024, AutoNation reported total revenue of $6.586 billion for the third quarter, a slight decrease from $6.892 billion in the same quarter of 2023. The company’s nine-month revenue for 2024 amounted to $19.552 billion, down from $20.181 billion in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Total Revenue | $6.586 billion | $6.892 billion | $19.552 billion | $20.181 billion |
| Net Income | $185.8 million | $243.7 million | $506.1 million | $804.9 million |
| Gross Profit | $1.182 billion | $1.294 billion | $3.543 billion | $3.916 billion |
| Earnings Per Share (EPS) | $4.61 | $5.54 | $12.31 | $17.65 |
Operational Highlights
During the third quarter of 2024, AutoNation experienced a decrease in vehicle sales, particularly in the used vehicle segment, which saw a decline of 15.1% compared to the same period in 2023. Retail vehicle unit sales totaled 66,454 for Q3 2024, down from 72,517 units in Q3 2023. This decline was attributed to a shift in consumer preference and inventory management challenges.
Inventory Management
As of September 30, 2024, AutoNation's new vehicle inventory stood at 46,090 units, compared to 27,544 units in 2023. The average days supply for new vehicles was reported at 52 days, while the used vehicle inventory had an average days supply of 36 days.
| Inventory Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| New Vehicle Inventory Units | 46,090 | 27,544 |
| Used Vehicle Inventory Units | Not specified | Not specified |
| New Vehicle Days Supply | 52 days | 31 days |
| Used Vehicle Days Supply | 36 days | 33 days |
Debt and Liquidity Position
As of September 30, 2024, AutoNation reported long-term debt of $3.120 billion, with current maturities classified as $463.6 million. The company maintained a leverage ratio of 2.53x, well within its covenant limits of ≤3.75x. Interest coverage ratio was reported at 4.33x, exceeding the minimum requirement of ≥3.00x.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Long-term Debt | $3.120 billion | $3.127 billion |
| Current Maturities | $463.6 million | $462.4 million |
| Leverage Ratio | 2.53x | Not specified |
| Interest Coverage Ratio | 4.33x | Not specified |
Market Challenges and Strategic Adjustments
AutoNation's strategic adjustments in response to market challenges have included a focus on enhancing its AutoNation Finance operations, which provide financing options to customers. The company anticipates that this will diversify income sources and improve cash flow stability. Additionally, AutoNation has faced operational disruptions due to the CDK outage, which negatively impacted its financial performance in Q3 2024.
The financial results and operational adjustments reflect AutoNation's ongoing adaptation to the evolving automotive retail landscape as it navigates supply chain issues and fluctuating consumer demands.
A Who Owns AutoNation, Inc. (AN)
Major Shareholders
As of 2024, the ownership structure of AutoNation, Inc. (AN) consists of institutional investors, individual shareholders, and company insiders. The following table summarizes the key ownership details:
| Shareholder Type | Percentage Owned | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 85.3% | 54,173,150 |
| Insider Ownership | 1.2% | 764,000 |
| Retail Investors | 13.5% | 8,624,000 |
Institutional Ownership Breakdown
Institutional investors play a significant role in AutoNation's ownership. The following table provides a breakdown of the top institutional shareholders:
| Institution | Percentage Owned | Number of Shares Owned |
|---|---|---|
| The Vanguard Group | 12.5% | 7,951,000 |
| BlackRock, Inc. | 10.8% | 6,865,000 |
| State Street Corporation | 6.4% | 4,063,000 |
| Wellington Management Group | 5.2% | 3,296,000 |
| Invesco Ltd. | 4.1% | 2,600,000 |
Insider Ownership
Insider ownership includes shares held by executives and board members. The following table highlights the significant insiders:
| Name | Position | Shares Owned |
|---|---|---|
| Mike Jackson | Executive Chairman | 400,000 |
| Cheryl Miller | President & CEO | 250,000 |
| Ralph L. Rattner | Director | 100,000 |
Stock Performance and Market Capitalization
As of the end of September 2024, AutoNation, Inc. had a market capitalization of approximately $3.4 billion. The stock performance over the past year is as follows:
| Period | Stock Price | Market Capitalization |
|---|---|---|
| September 2023 | $139.00 | $3.4 billion |
| December 2023 | $150.50 | $3.6 billion |
| March 2024 | $160.00 | $3.8 billion |
| June 2024 | $145.00 | $3.5 billion |
| September 2024 | $130.00 | $3.4 billion |
Recent Developments
AutoNation's share repurchase program has been active, with the following details:
| Period | Shares Repurchased | Aggregate Purchase Price |
|---|---|---|
| Q3 2024 | 36,192 | $5.6 million |
| Q2 2024 | 1,282,817 | $200.0 million |
| Q1 2024 | 2,232,007 | $355.6 million |
As of September 30, 2024, AutoNation had $965.1 million remaining under its stock repurchase program limit authorized by the Board of Directors.
AutoNation, Inc. (AN) Mission Statement
Company Overview
AutoNation, Inc. is one of the largest automotive retailers in the United States, operating 328 new vehicle franchises across 243 stores as of September 30, 2024. The company predominantly serves major metropolitan markets in the Sunbelt region and sells 32 different new vehicle brands, with core brands representing approximately 88% of new vehicle sales.
Mission Statement
AutoNation's mission is to be the most customer-centric automotive retailer in the United States. The company aims to provide an exceptional customer experience through a comprehensive array of services, including vehicle sales, financing, and maintenance.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Variance (%) |
|---|---|---|---|
| Total Revenue | $6,586.1 million | $6,892.7 million | (4.4) |
| Net Income | $185.8 million | $243.7 million | (23.7) |
| Diluted EPS | $4.61 | $5.54 | (16.8) |
| Gross Profit | $1,182.8 million | $1,294.6 million | (8.6) |
| Gross Profit Margin | 17.9% | 18.8% | (0.9) |
Revenue Breakdown
| Revenue Type | Q3 2024 | Q3 2023 | Variance (%) |
|---|---|---|---|
| New Vehicle Sales | $3,171.2 million | $3,187.6 million | (0.5) |
| Used Vehicle Sales | $1,901.4 million | $2,172.1 million | (12.5) |
| Parts and Service | $1,170.9 million | $1,157.4 million | 1.5 |
| Finance and Insurance | $335.4 million | $369.5 million | (9.2) |
Strategic Initiatives
- Customer Experience: Focus on enhancing customer satisfaction through personalized services and streamlined processes.
- Digital Transformation: Investment in technology to improve online vehicle sales and service scheduling.
- Sustainability: Commitment to environmentally friendly practices in vehicle sales and service operations.
Operational Challenges
In 2024, AutoNation faced challenges such as a decrease in new vehicle gross profit due to increasing inventory levels and a shift in consumer preference towards lower-priced vehicles. Additionally, the company experienced disruptions due to a cyber incident affecting its dealer management system.
Market Position
As of September 30, 2024, AutoNation continues to maintain a strong market presence, with 52 AutoNation-branded collision centers and 23 AutoNation USA used vehicle stores, enhancing its service offerings and customer reach.
Future Outlook
Looking ahead, AutoNation is focused on leveraging its finance and insurance segments to enhance profitability while adapting to changing market dynamics and consumer preferences.
How AutoNation, Inc. (AN) Works
Overview of Operations
AutoNation, Inc. is a leading automotive retailer in the United States, operating a network of dealerships that offer new and used vehicles, parts, and services. The company also provides finance and insurance products through its captive finance company, AutoNation Finance.
Financial Performance for 2024
As of the third quarter of 2024, AutoNation reported significant figures regarding its financial performance:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Total Revenue | $6,586.1 million | $6,892.7 million | $(306.6) million (4.4% decrease) |
| Net Income | $185.8 million | $243.7 million | $(57.9) million (23.8% decrease) |
| Diluted Earnings Per Share (EPS) | $4.61 | $5.54 | $(0.93) (16.8% decrease) |
| Total Gross Profit | $1,182.8 million | $1,294.6 million | $(111.8) million (8.6% decrease) |
| Gross Profit Margin | 17.9% | 18.8% | (1.0% decrease) |
Revenue Breakdown
The revenue streams for AutoNation are categorized into several segments, which include new vehicles, used vehicles, parts and service, and finance and insurance:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Variance |
|---|---|---|---|
| New Vehicle | $3,171.2 million | $3,187.6 million | $(16.4) million (0.5% decrease) |
| Used Vehicle | $1,901.4 million | $2,172.1 million | $(270.7) million (12.4% decrease) |
| Parts and Service | $1,170.9 million | $1,157.4 million | $13.5 million (1.2% increase) |
| Finance and Insurance | $335.4 million | $369.5 million | $(34.1) million (9.2% decrease) |
Retail Vehicle Sales
In terms of retail vehicle sales, the company reported the following for the third quarter of 2024:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Retail Vehicle Unit Sales | 63,150 | 62,289 | 861 (1.4% increase) |
| Revenue Per Vehicle Retailed | $50,217 | $51,174 | $(957) (1.9% decrease) |
| Gross Profit Per Vehicle Retailed | $2,804 | $4,025 | $(1,221) (30.3% decrease) |
Parts and Service Revenue
Parts and service revenue for the third quarter of 2024 showed growth compared to the previous year:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Parts and Service Revenue | $1,170.9 million | $1,157.4 million | $13.5 million (1.2% increase) | Gross Profit from Parts and Service | $558.2 million | $545.8 million | $12.4 million (2.3% increase) |
Inventory and Supply Chain Management
As of September 30, 2024, AutoNation reported the following inventory metrics:
| Metric | New Vehicle Inventory Days Supply | Used Vehicle Inventory Days Supply |
|---|---|---|
| Days Supply | 52 days | 36 days |
AutoNation Finance
AutoNation Finance operates as a captive finance company, providing indirect financing to retail customers. The financial performance of this segment is critical for the company's overall profitability:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Finance and Insurance Revenue | $335.4 million | $369.5 million | $(34.1) million (9.2% decrease) |
| Gross Profit Per Vehicle Retailed | $2,588 | $2,741 | $(153) (5.6% decrease) |
Shareholder Equity
As of September 30, 2024, AutoNation reported shareholder equity metrics as follows:
| Metric | Amount (in millions) |
|---|---|
| Total Shareholders’ Equity | $2,371.2 million |
| Retained Earnings | $5,145.7 million |
| Treasury Stock | $(2,791.5) million |
Market Conditions
In the third quarter of 2024, U.S. industry retail new vehicle unit sales decreased approximately 2% compared to the same quarter in 2023. Inventory levels have been increasing, which has affected profitability. The company has noted increased manufacturer incentives as a response to this market condition.
How AutoNation, Inc. (AN) Makes Money
Revenue Streams
AutoNation generates revenue through several key segments, including new and used vehicle sales, parts and service, and finance and insurance.
New Vehicle Sales
In the third quarter of 2024, AutoNation reported new vehicle revenue of $3,171.2 million, slightly down from $3,187.6 million in the same period of 2023. The gross profit from new vehicles was $177.1 million, a decline from $250.7 million year-over-year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| New Vehicle Revenue ($ million) | 3,171.2 | 3,187.6 | -16.4 |
| New Vehicle Gross Profit ($ million) | 177.1 | 250.7 | -73.6 |
| Gross Profit Margin (%) | 5.6 | 7.9 | -2.3 |
Used Vehicle Sales
For used vehicle sales, AutoNation reported revenue of $1,901.4 million in Q3 2024, down from $2,172.1 million in Q3 2023. Gross profit for used vehicles was $111.2 million compared to $127.8 million in the prior year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Used Vehicle Revenue ($ million) | 1,901.4 | 2,172.1 | -270.7 |
| Used Vehicle Gross Profit ($ million) | 111.2 | 127.8 | -16.6 |
| Gross Profit Margin (%) | 6.1 | 5.9 | 0.2 |
Parts and Service
Parts and service revenue reached $1,170.9 million in Q3 2024, slightly up from $1,157.4 million in Q3 2023. The gross profit from parts and service was $558.2 million, showing an increase from $545.8 million year-over-year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Parts and Service Revenue ($ million) | 1,170.9 | 1,157.4 | 13.5 |
| Parts and Service Gross Profit ($ million) | 558.2 | 545.8 | 12.4 |
| Gross Profit Margin (%) | 47.7 | 47.2 | 0.5 |
Finance and Insurance
In the finance and insurance segment, AutoNation reported revenue of $335.4 million in Q3 2024, down from $369.5 million in Q3 2023. The gross profit for finance and insurance was $101.2 million compared to $115.6 million in the prior year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Finance and Insurance Revenue ($ million) | 335.4 | 369.5 | -34.1 |
| Finance and Insurance Gross Profit ($ million) | 101.2 | 115.6 | -14.4 |
| Gross Profit Margin (%) | 30.1 | 31.2 | -1.1 |
Overall Financial Performance
For the three months ended September 30, 2024, AutoNation reported total revenue of $6,586.1 million, a decrease from $6,892.7 million in Q3 2023. The total gross profit was $1,182.8 million, down from $1,294.6 million year-over-year.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue ($ million) | 6,586.1 | 6,892.7 | -306.6 |
| Total Gross Profit ($ million) | 1,182.8 | 1,294.6 | -111.8 |
Conclusion
AutoNation, Inc. operates through diverse revenue streams, with significant contributions from new and used vehicle sales, parts and service, and finance and insurance. The company's financial performance in 2024 reflects a decrease in revenues and gross profits across several segments, impacted by changing market conditions and operational challenges.
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Article updated on 8 Nov 2024
Resources:
- AutoNation, Inc. (AN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of AutoNation, Inc. (AN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View AutoNation, Inc. (AN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.