What happened
Shares of AutoNation (AN 1.06%) have popped today, up by 7% as of 1 p.m. EDT, after the car retailer reported second-quarter earnings. The company beat expectations and benefited from a shift to online sales.
So what
Total revenue in the second quarter came in at $4.5 billion, with same-store sales falling 14%. That all led to adjusted earnings per share of $1.41. Consensus estimates called for $4 billion in sales and $0.37 per share in adjusted profit. AutoNation also recognized a non-cash, after-tax unrealized gain of $161 million related to its investment in Vroom, an online auto marketplace.
Image source: Getty Images.
"Our goal is to provide a peerless customer experience, while empowering the customer to engage with us on their terms," the company said in a release. "Our AutoNation Express online selling tools enable customers to buy and sell vehicles online, and our store-to-door delivery option allows customers to completely avoid visiting a showroom if they choose."
Now what
The company had previously laid off thousands of staff, as car sales have been hurt due to the coronavirus pandemic. CEO Mike Jackson said that it may not rehire those workers because the shift to e-commerce and online purchasing may be here to stay, according to Bloomberg. AutoNation said that 45% of customers purchased their vehicles online in the second quarter.
Separately, J.D. Power said that the used vehicle market continued to bounce back in June, with wholesale prices increasing last month. The market researcher expects prices to reach "pre-virus levels" by the end of the year. Used vehicles represented nearly 30% of AutoNation's revenue last quarter.
