AutoNation Inc., which posted robust first-quarter net income compared with a net loss in the year-earlier period, said Tuesday it plans to expand its used-vehicle-only AutoNation USA business to more than 130 stores by the end of 2026.
The nation’s largest new-vehicle retailer also announced it has signed an agreement to acquire 11 dealerships from Peacock Automotive Group by the summer. The acquisition, which includes a collision center, is expected to generate about $380 million in annual revenue.
AutoNation said the Peacock stores it would acquire are in the Hilton Head and Columbia areas of South Carolina and in Savannah, Ga. Peacock’s dealerships represent a mix of import, domestic and luxury brands including Hyundai, Genesis, Jaguar, Land Rover, Audi, Porsche, Subaru, Chrysler, Dodge, Jeep, Ram and Volkswagen.
In the first quarter, AutoNation’s revenue jumped 27 percent to $5.9 billion. Net income totaled $239.4 million, a swing from a loss of $232.3 million in the same quarter of 2020, which was negatively impacted by the early days of the coronavirus pandemic.
Results for the first three months of 2021 included a $6 million after-tax gain from AutoNation’s sale of its stake in online used-vehicle retailer Vroom Inc., which was completed in the first quarter. Results for the first quarter of 2020 included goodwill, franchise rights and impairment charges totaling $315 million after taxes; those charges were driven by the coronavirus’s impact on AutoNation’s business and valuations.
The new goal of more than 130 AutoNation USA stores by the end of 2026 is significantly more ambitious than the expansion goal announced last year: to grow from five existing stores to more than 100 outlets by 2030, including 50 by the end of 2025.
AutoNation said Tuesday that it remains on track to open five AutoNation USA stores this year, including one in San Antonio expected to open by the end of the second quarter. It plans to add 12 of the used-only stores in 2022, up from previous guidance of 10 stores for next year.
AutoNation shares were down 3 percent to $94.55 in midday trading Tuesday.
Records: All-time adjusted earnings per share from continuing operations of $2.79.
Sales: Overall and same-store new-vehicle sales jumped 22 percent to 69,361. That was better than the 12 percent rise for all U.S. new light-vehicle sales in the first quarter, according to the Automotive News Research & Data Center. Overall and same-store used-vehicle sales rose 28 percent to 71,780.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 249,654 new vehicles in 2020.