Critical Shifts:
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EchoPark’s Turning Point: Sonic’s used-car segment, EchoPark, capitalized on tax refund season to hit an all-time record adjusted EBITDA ($18.6M). For independents, this highlights the massive impact seasonal buyer liquidity still has on used-unit profitability.
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Margin Growth vs. Bottom Line: While total revenue rose 1% to a record $3.7B and gross profit jumped 6%, net income actually dropped 14%. The takeaway: rising operating costs (SG&A at 71.3% of gross profit) are eating into the gains from higher sales prices.
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Diversification into Powersports: Sonic is aggressively expanding into the Harley-Davidson market across four states. This shift signals a strategic move to hedge against automotive volatility by capturing higher-margin, lifestyle-driven powersports customers.
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Sonic Automotive, Inc., one of the nation’s largest automotive retailers, today reported financial results for the first quarter ended March 31, 2026.
Sonic reported first quarter record total revenues of $3.7 billion, up 1% year-over-year; first quarter record total gross profit of $598.8 million, up 6% year-over-year. The company also reported net income in the first quarter was $60.8 million, down 14% year-over-year ($1.79 earnings per share, down 12% year-over-year).
Reported net income for the first quarter of 2026 includes a $5.1 million pre-tax disposition-related net gain and a $3.6 million pre-tax gain related to the exit of leased dealerships, partially offset by a $0.4 million pre-tax impairment charge related to capital improvement projects (collectively, these items are partially offset by a $2.4 million income tax expense on the above net benefit).
Reported net income for the first quarter of 2025 includes the effect of a $30.0 million pre-tax gain from cyber insurance proceeds, offset partially by a $1.4 million non-cash pre-tax impairment charge, a $1.0 million pre-tax disposition related net loss, and a $0.9 million pre-tax charge related to storm damage (collectively, these items are partially offset by a $7.4 million tax expense on the above net benefit).
Total reported selling, general and administrative expenses as a percentage of gross profit of 71.3% (71.9% on a Franchised Dealerships Segment basis, 62.9% on an EchoPark Segment basis, and 97.7% on a Powersports Segment basis).
“I am grateful for our team’s efforts in the first quarter, which delivered several first quarter and all-time quarterly records across our operating segments,” David Smith, chairman and chief executive officer of Sonic Automotive, stated. “Our Franchised Dealerships built on fourth quarter momentum to deliver record consolidated first quarter revenue, and our EchoPark team capitalized on a strong tax refund season to deliver an all-time record adjusted EBITDA of $18.6 million while continuing to provide a world-class guest experience.
“We are also excited to expand our Powersports segment in the great riding states of California, Florida, Georgia, and North Carolina. The acquisition of five new Harley-Davidson dealerships establishes Sonic Powersports as one of the fastest growing powersports retailers in the country and reinforces our commitment to diversifying our revenue base and enhancing shareholder returns.”
