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Demand for used vehicles spiked during the pandemic but has since slipped as supply chains eased and automakers were able to start rolling out new models.
As a result, Florida-based AutoNation saw new vehicle retail unit sales climb by 8% annually in the three months ended June 30 to 62,444, while used car retail unit sales dipped by 11% to 68,812.
After-sales revenue, which is generated from services like pit stops and repairs, also grew to $1.1 billion, an increase of 11%.
Total revenue remained essentially unchanged year-on-year at $6.9B but still topped Bloomberg consensus expectations of $6.75B.
Meanwhile, adjusted diluted earnings per share beat estimates despite dipping by 3% to $6.29.
Speaking to Reuters, chief executive Mike Manley said that demand for vehicles in the U.S. is strong as growing inventories contribute to prices dropping from COVID-era peaks. But Manley told Reuters that, due to this trend, “I don’t think you’ll see margins at pre-pandemic levels this year.”
Shares in AutoNation slumped in early U.S. trading on Friday.
