Sonic Automotive, Inc. (NYSE:SAH) Q2 2023 Earnings Conference Call July 27, 2023 11:00 AM ET

Company Participants

David Smith - Chairman & CEO

Jeff Dyke - President

Heath Byrd - CFO

Tim Keen - Chief Operating Officer, EchoPark

Steve Wittman - Chief Digital Retail Officer

Danny Wieland - VP of IR

Conference Call Participants

Daniel Imbro - Stephens Inc.

Rajat Gupta - JPMorgan

Patrick Buckley - Jefferies

John Murphy - BofA Securities

David Whiston - Morningstar

Operator

Good morning, and welcome to the Sonic Automotive Second Quarter 2023 Earnings Conference Call. This conference call is being recorded today, Thursday, July 27, 2023. Presentation materials, which accompany management's discussion on the conference call can be accessed at company's website at ir.sonicautomotive.com.

At this time, I would like to refer to the safe harbor statement under the Private Securities and Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information or expectations about the company's products or market or otherwise make statements about the future.

Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission. In addition, management may discuss certain non-GAAP financial measures as defined by the Securities and Exchange Commission.

Please refer to the non-GAAP reconciliation tables in the company's current report on Form 8-K filed with the Securities and Exchange Commission earlier today.

I would now like to introduce Mr. David Smith, Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference.

David Smith

Thank you very much, and good morning, everyone. And welcome, as she said, to the Sonic Automotive second quarter 2023 earnings call. Again, I'm David Smith, the company's Chairman and CEO. Joining me on the call today is Mr. Jeff Dyke, our President; our CFO, Mr. Heath Byrd; our EchoPark Chief Operating Officer, Mr. Tim Keen; our Chief Digital Retail Officer; Mr. Steve Wittman, and our Vice President of Investor Relations, Mr. Danny Wieland.

Earlier this morning, Sonic Automotive reported second quarter financial results, including record quarterly total revenues of $3.7 billion, a 4% increase from last year. Second quarter EPS was $0.65 per share, which includes the effect of $75 million in charges related to our previously announced plan to indefinitely suspend operations at eight EchoPark retail hubs and 14 delivery and buy centers as well as three Northwest Motorsport stores in the EchoPark segment. Offset partially by a $21 million gain on the disposal of three franchise dealerships. Excluding these items, adjusted EPS was $1.83 per share, a decrease from $2.45 in the prior year, due primarily to normalizing new vehicle margins and higher interest rates.