AutoNation's Q2 Earnings Beat Estimates, Revenues Rise Y/Y

AutoNation, Inc. AN reported second-quarter 2025 adjusted earnings of $5.46 per share, which increased 37% year over year and beat the Zacks Consensus Estimate of $4.70, primarily on the back of better-than-expected revenues from retail new and used vehicles, finance and insurance business, as well as parts and service business. In the quarter under review, revenues amounted to $6.97 billion, which surpassed the Zacks Consensus Estimate of $6.80 billion and rose from $6.48 billion reported in the second quarter of 2024.

AutoNation, Inc. Price, Consensus and EPS Surprise

AutoNation, Inc. price-consensus-eps-surprise-chart | AutoNation, Inc. Quote

Key Takeaways

In the reported quarter, new vehicle revenues were up 8.8% year over year to $3.40 billion and topped our estimate of $3.24 billion due to higher-than-expected sales volume and average selling price (ASP). New vehicle retail units sold totaled 65,847 units (up 7.5% year over year), beating our projection of 64,882 units. The ASP per new vehicle unit retailed was $51,579 (up 1.2% year over year), beating our estimate of $49,903. Gross profit from the segment came in at $183.4 million, which declined 3.7% year over year and lagged our estimate of $196.6 million.

Retail used-vehicle revenues increased 5.8% from the year-ago quarter’s figure to $1.85 billion, which surpassed our projection of $1.76 billion due to higher-than-expected volumes and ASP. Used vehicle retail units sold totaled 69,736 units (up 6.5% year over year), beating our projection of 67,147 units. ASP per used vehicle unit retailed came in at $26,457 (down 0.6% year over year) and topped our projection of $26,245. Gross profit from the segment came in at $113.1 million, which rose 5.4% and beat our projection of $97.8 million.

Revenues from wholesale used vehicles were down 16.5% to $140 million and missed our estimate of $164.2 million. Gross profit rose to $12.3 million from $4.1 million and topped our estimate of $7.3 million. 

Net revenues in the finance and insurance business amounted to $367.7 million, which increased 13.5% from the year-ago quarter and beat our projection of $327 million. Gross profit was $367.7 million, which increased 13.5% and beat our estimate of $327 million.

Revenues from the parts and service business went up by 9.3% to $1.22 billion and topped our estimate of $1.18 billion. Gross profit from this segment came in at $598.6 million, which rose 11.6% year over year, beating our estimate of $569.2 million.

Segmental Details

Revenues from the Domestic segment rose 10.4% year over year to $1.92 billion and topped our projection of $1.75 billion. The segment’s income climbed 82.9% to $92 million, surpassing our estimate of $59.6 million.

Revenues from the Import segment increased 6.4% from the prior-year quarter to $2.15 billion and topped our forecast of $2.02 billion. The segment’s income increased 23.3% to $133.4 million and surpassed our model estimate of $114.2 million.  

Premium Luxury segment sales rose 6.6% to $2.56 billion, missing our projection of $2.57 billion. The segmental income rose 26.9% year over year to $180.1 million in the reported quarter and topped our estimate of $163.9 million.

Financial Tidbits

As of June 30, 2025, the company’s liquidity was $1.8 billion, including $63 million in cash and nearly $1.8 billion available under its revolving credit facility. The firm’s inventory was valued at $3.46 billion. At the end of the second quarter, non-vehicle debt was $3.76 billion. Capital expenditure in the quarter was $79 million.

During the first half of 2025, the company bought back 1.5 million shares for $254 million. Currently, AN has $607 million remaining under its share repurchase program.

AN’s Zacks Rank & Stocks to Consider

AN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Ferrari N.V. RACE, PHINIA Inc. PHIN and XPeng Inc. XPEV. While RACE and PHIN sport a Zacks Rank #1 (Strong Buy) each at present, XPEV carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RACE’s fiscal 2025 sales and earnings indicates year-over-year growth of 13.6% and 12.1%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 5 cents each in the past 30 days.

The Zacks Consensus Estimate for PHIN’s 2025 sales and earnings implies year-over-year growth of 0.58% and 12.44% respectively. EPS estimates for 2025 and 2026 have improved 14 cents and 16 cents, respectively, in the past seven days.

The Zacks Consensus Estimate for XPEV’s 2025 sales and earnings indicates year-over-year growth of 102% and 66.7%, respectively. EPS estimates for 2025 have improved 7 cents in the past 90 days. EPS estimates for 2026 have increased a penny in the past 60 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research