Sonic Automotive, Inc.

What they do

Sonic operates three reportable segments: Franchised Dealerships, EchoPark and Powersports. As of June 30, 2026 it ran 107 franchised stores (127 new vehicle franchises across 24 brands and 15 collision repair centers in 17 states), 18 EchoPark used-vehicle stores in 10 states, and 20 Powersports locations in five states. Franchised dealerships sell new and used cars and light trucks, provide parts, service and collision repair, and arrange third-party F&I products. EchoPark sells used vehicles and arranges F&I but offers no customer-facing fixed operations; Powersports sells motorcycles, personal watercraft and ATVs plus service and F&I.

Revenue drivers

• Franchised Dealerships Segment — The core business, representing approximately 85.0% of 2025 total revenue (83.9% in 2024); generates revenue from new and used vehicle sales, fixed operations and F&I.
• EchoPark Segment — Used-vehicle specialty retail, approximately 13.7% of 2025 total revenue (15.0% in 2024), operating 18 stores in 10 states with F&I but no customer-facing fixed operations.
• Powersports Segment — The smallest segment at approximately 1.3% of 2025 total revenue (1.1% in 2024); sells new and used motorcycles, personal watercraft and all-terrain vehicles with fixed operations and F&I at 20 locations as of June 30, 2026.
• Fixed Operations and F&I — Higher-margin revenue streams across the Franchised Dealerships and Powersports segments: parts, maintenance, warranty repairs, collision repair and arranging third-party financing, extended warranties and aftermarket products.

Recent performance

Annual revenue rose to $15.15 billion in 2025 from $14.22 billion in 2024, but net income fell to $118.7 million (diluted EPS $3.42) from $216.0 million ($6.18) in 2024. Operating cash flow improved sharply to $567.4 million in 2025 from $109.2 million in 2024. Recent quarterly revenue was $3.97 billion (2025-09-30), $3.87 billion (2025-12-31), $3.69 billion (2026-03-31) and $3.93 billion (2026-06-30). At June 30, 2026 the company reported $6.38 billion in total assets, $1.03 billion in shareholder equity, $19.2 million in cash and equivalents, and $1.57 billion in long-term debt.

Strategy

Management expects to acquire dealerships and open new stores that strengthen the brand portfolio and to divest or close stores that do not yield acceptable long-term returns. The company highlights a diversified model across franchised dealerships, EchoPark used-vehicle retailing and powersports consolidation, and describes EchoPark as an omnichannel strategy in a highly fragmented pre-owned market. Sonic is also expanding powersports: it acquired five Harley-Davidson dealerships and one authorized retail outlet in April 2026, estimated to generate $100 million in annualized revenues. The investor presentation cites anticipated expense reductions, targeted increases to technician headcount, and long-term annual revenue and profitability targets.

Risks

• Industry competition and internet pricing — Sonic competes with public and private dealerships, many larger and with greater resources, and states that consumers using the internet to compare prices may further reduce new and used vehicle margins and F&I profits.
• Manufacturer direct sales — The company warns that its revenues and profitability could be materially harmed if state dealer franchise laws are relaxed to permit manufacturers to retail vehicles directly to consumers.
• New vehicle demand and macro factors — Sonic says interest rates, consumer confidence, financing availability, manufacturer production and incentive levels, tariffs and trade policies, and geopolitical or other disruptions could cause actual 2026 industry volume to vary from its estimates.
• Geographic and brand concentration — Texas and California together accounted for 50.8% of 2025 total revenue (26.2% and 24.6%, respectively), and the company notes brand and geographic concentrations have caused its past results to differ from overall industry trends.

Outlook

Sonic estimates 2026 U.S. new vehicle industry volume of 15.5 million to 16.0 million vehicles, a decrease of 2% to 5% compared to 2025. The company describes EchoPark as offering high growth potential in a fragmented pre-owned market and powersports as an early-stage consolidation opportunity; the April 2026 Harley-Davidson dealership acquisitions are estimated to add $100 million in annualized revenues. Management continues to pursue acquisitions and store divestitures and targets long-term annual revenue and profitability goals.