AutoNation Witnesses Sales Upsurge
Automotive retailer AutoNation Inc. (AN) reported 11% year-over-year increase in sales to 26,372 vehicles in May 2013. The growth was mainly attributable to strong sales of Premium Luxury vehicles.
On same-store basis, retail new vehicle sales went up 8% to 25,566 units. May 2013 had 26 selling days; consistent with May 2012.
Sales in the Domestic segment jumped 14% to 8,287 vehicles. The segment comprises retail automotive franchises that sell vehicles manufactured by Ford Motor Co. (F), Chrysler and others.
Sales in the Import segment went up 7% to 13,181 vehicles. The segment covers retail automotive franchises that sell vehicles manufactured by Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and others.
Sales in the Premium Luxury segment surged 17% to 4,904 vehicles during the month. The segment consists of retail automotive franchises selling vehicles manufactured by Mercedes Benz, BMW, Lexus and others.
Auto sales in the U.S. grew 8.2% to 1.44 million units in May while it rose 10.9% to 15.3 million vehicles on a seasonally adjusted rate (:SAAR) basis. The year-over-year improvement was attributable to continued macroeconomic recovery, increase in aging vehicles on the U.S. roads and strong demand for commercial vehicles.
It is expected that strong pent-up demand, easier car finance and improving macroeconomic conditions will continue to act as a catalyst to rejuvenate U.S. auto sales to the pre-recession level.
Based in Fort Lauderdale, Fla, AutoNation is the largest automotive retailer in the U.S. The company owns and operates about 265 new vehicle franchises that sell 32 brands located in the major metropolitan markets across 15 states.
AutoNation posted a 21.4% rise in earnings per share to 68 cents in the first quarter of 2013 from 56 cents in the same quarter of 2012, topping the Zacks Consensus Estimate by 5 cents.
Revenues increased 10.8% to $4.1 billion, slightly ahead of the Zacks Consensus Estimate of $4.0 billion. The revenue growth was mainly attributable to strong new vehicle sales during the quarter. The company retains a Zacks Rank #2 (Buy).
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