Sonic Automotive reported record annual revenue of $15.2 billion, a 7% increase from the prior year, and a record gross profit of $2.4 billion. Fourth‑quarter revenue reached $3.871 billion, slightly below consensus estimates and a 1% decline from the $3.9 billion reported in Q4 2024. The miss is largely attributed to a $300‑per‑unit headwind from the growing electric‑vehicle mix, which has compressed margins in the franchised dealership segment.
The company’s reported earnings per share were $1.36, down 19% year‑over‑year, but the adjusted EPS of $1.52 beat consensus estimates of $1.51 by $0.01. The adjusted beat reflects disciplined cost control and the continued emphasis on high‑margin fixed operations, which now account for more than 75% of gross profit. GAAP net income fell 45% due to significant non‑cash impairment charges, creating a large gap between GAAP and adjusted earnings that investors closely monitor.
Segment performance underscored the company’s diversified platform. Franchised Dealerships generated $12.9 billion in revenue and $2.1 billion in gross profit, both up 8% year‑over‑year. EchoPark reported an all‑time record adjusted EBITDA of $49.2 million, up 78%, while the Powersports segment’s adjusted EBITDA rose 83% to $11.5 million. These gains were driven by strong demand in core automotive and powersports markets and the company’s ability to leverage fixed‑operations efficiencies.
Sonic confirmed a quarterly cash dividend of $0.38 per share, payable on April 15 2026. Management highlighted liquidity of over $700 million as of December 31 2025 and noted operating cash flow over the nine‑month period, though specific figures were not disclosed in the release.
David Smith, Chairman and CEO, said, "Our fourth‑quarter results reflect the strength of Sonic Automotive’s diversified business model and the disciplined execution of our long‑term strategy." He added that the company remains focused on mitigating the electric‑vehicle mix headwind while expanding high‑margin fixed‑operations activity.
Investors reacted negatively to the results, citing the revenue miss, the narrow adjusted EPS beat, and the sizable gap between GAAP and adjusted earnings. The market’s response underscores concerns about the company’s ability to sustain profitability amid the EV transition and the impact of one‑time impairment charges on reported earnings.
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