Investing.com — AutoNation (NYSE:AN), one of the largest car dealership chains in the U.S., has reported better-than-expected adjusted income per share and revenue for the second quarter, thanks to strong demand for new vehicles that helped counterbalance a decline in sales of used cars.
Demand for used vehicles spiked during the pandemic but has since slipped as supply chains eased and automakers were able to start rolling out new models.
As a result, Florida-based AutoNation saw new vehicle retail unit sales climb by 8% annually in the three months ended June 30 to 62,444, while used car retail unit sales dipped by 11% to 68,812.
After-sales revenue, which is generated from services like pit stops and repairs, also grew to $1.1 billion, an increase of 11%.
Total revenue remained essentially unchanged year-on-year at $6.9B but still topped Bloomberg consensus expectations of $6.75B.
Meanwhile, adjusted diluted earnings per share beat estimates despite dipping by 3% to $6.29.
Speaking to Reuters, chief executive Mike Manley said that demand for vehicles in the U.S. is strong as growing inventories contribute to prices dropping from COVID-era peaks. But Manley told Reuters that, due to this trend, “I don’t think you’ll see margins at pre-pandemic levels this year.”
Shares in AutoNation slumped in early U.S. trading on Friday.