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Demand for new and used cars seen staying hot into 2022: AutoNation CEO

·Anchor, Editor-at-Large
·2-min read
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Surging demand for new and used cars during the COVID-19 pandemic — which has sent prices for each skyrocketing — continues to seriously pad the bottom line of auto dealership giant AutoNation (AN). 

And its top executive doesn't see that dynamic changing anytime soon. 

"Demand continues to outpace supply for new vehicles. We expect this to continue into 2022 due to consumers' preference for personal transportation coupled with lower interest rates," AutoNation CEO Mike Jackson says. 

AutoNation — which operates 315 retail locations across the country — crushed analyst sales and profit forecasts for the second quarter on Monday. The company saw strong unit growth in import and premium luxury vehicles as consumers sought out upgraded rides. Volumes of domestic autos fell year-over-year as the Big Three (Ford, General Motors and Fiat Chrysler) battled with plant shutdowns borne from the chip supply shortage.   

Here is how AutoNation performed compared to Wall Street estimates.

  • Net Sales: $6.98 billion vs. $6.07 billion

  • Diluted EPS: $4.83 vs. $2.58

AutoNation shares was down slightly in pre-market trading Monday. The stock has skyrocketed 130% over the past year amid a series of blowout quarter. 

For the second quarter, the company saw same-store sales climb 54% (up 33% from the second quarter of 2019, aka pre-pandemic numbers). 

Underscoring the strong consumer demand, AutoNation said its new vehicle and used vehicle gross profit rose 89% and 24%, respectively, from the prior year. Those respective gains were 130% and 53%, compared to the second quarter of 2019.

The company said it repurchased 9% of its outstanding shares in the quarter for $736 million. Year-to-date, AutoNation has repurchased 15% of the company by spending $1.2 billion on stock buybacks. 

Programming note: AutoNation CEO Mike Jackson will be on Yahoo Finance Live Monday in the 9:00 a.m. ET hour, to talk more about the quarter and the company's outlook.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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