AutoNation, Inc. (NYSE:AN) Q4 2023 Earnings Conference Call February 13, 2024 9:00 AM ET

Company Participants

Derek Fiebig - Vice President of Investor Relations

Michael Manley - Chief Executive Officer

Thomas Szlosek - Chief Financial Officer

Conference Call Participants

John Murphy - Bank of America

Daniel Imbro - Stephens

Rajat Gupta - JPMorgan

Michael Ward - Freedom Capital

Bret Jordan - Jefferies

Douglas Dutton - Evercore

Colin Langan - Wells Fargo

Operator

Hello everyone, and welcome to the AutoNation Incorporation Fourth Quarter 2023 Earnings Conference Call. My name is Bruno, I'll be operating your call today. [Operator Instructions]

I'll now hand over to your host, Derek Fiebig, Vice President of Investor Relations. Please go ahead.

Derek Fiebig

Thank you, Bruno, and good morning, everyone. And welcome to AutoNation's fourth quarter 2023 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer; and Tom Szlosek, our Chief Financial Officer. Following their remarks, we'll open up the call for questions.

Before we begin, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued today, and in our filings with the SEC. Certain non-GAAP financial measures as defined under SEC rules will be discussed on this call. Reconciliations are provided in our materials and on our website at investors.autonation.com.

With that I'll turn the call over to Mike.

Michael Manley

Yes, thanks Derek, and good morning, everybody. Thank you for joining us today. I'm on Slide 3 and I'm going to provide some opening remarks before I hand over to Tom, who is going to take you through our fourth quarter results in greater detail.

Now, as we know, there continues to be mixed economic signals in the economy, and concerns over affordability. But from our perspective, consumer demand for new vehicles remains robust. During the quarter, our total new vehicle revenue increased 7%, and unit sales increased 5%. And this reflected strong import growth, as well as the seasonal uplift in Premium Luxury sales.

New vehicle margins continue to decline, but the rate of moderation in the fourth-quarter, which is approximately $120 per month was more modest than earlier quarters. Total new vehicle inventory levels of 76 days increased from 19 last year and 31 in the third quarter. We have 66 days of domestic brands, 29 days of luxury and 24 days of import brands. Inventory levels are expected to continue to grow in 2024, and as such, we expect to see a continued moderation of new vehicle margin, which we anticipate will be roughly the same pace as we experienced in Q4.