Sonic Automotive (SAH) 28 Apr 222022 Q1 Earnings call transcript

Good morning, and welcome to the Sonic Automotive First Quarter 2022 Earnings Conference Call. This conference call is being recorded today, Thursday, April 28, 2022. Presentation materials, which accompany management's decisions on the conference call can be accessed at the company's Web site 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 otherwise, make statements about the future. and could a differ cause the made. forward-looking and of materially are statements that uncertainties actual statements subject number to risks from Such results to with are the These Commission. detailed and and Exchange uncertainties company's risks filings the Securities in

today. discuss Please filed Exchange In Commission. current measures your David as Exchange to report would the with company's the and non-GAAP I on non-GAAP defined addition, Mr. certain earlier Officer to financial X-K the Smith, the like by Securities introduce Commission begin Chief management may Smith, Securities in of Form may refer Automotive. conference. and now Sonic reconciliation you tables Mr. Executive

and Thank Automotive's to Sonic XXXX you, everyone, first and good welcome earnings morning quarter call.

company's As CEO. she said, I'm the Smith, David

is Building EchoPark, Relations, of by Mr. Mr. on Keen; Retail on Wieland. revenues plans. share, Mr. a Heath Steve our call President, operating focused results Whitman; Mr. per and CFO, Digital President me Jeff Tim of we strategic our today, our the Investor our earnings the Chief and Officer quarter and Mr. XXXX, driven record Officer, playbooks, Byrd; in first Danny customer today our our Chief Operating Dyke; Joining execution reported of XXXX demand, team continued our our growth accomplishing strong on record-breaking Vice

our would and record us partners Sun also thank Congratulations, We also not effort also achieve of vendor continue another to our Upstate teammates. thank This for our in growing strategically while and manufacturers, dealership and been without and and all. execution EchoPark's franchise with have nationwide Sonic by customers, network, helping to performance acquisition Chevrolet expand the We EchoPark quarter. New digital like possible network our footprint you would York. amazing

Now, let's review financial highlights. our briefly

previous year-over-year billion, quarter XXXX, we performance of and results of record EPS $X.X a of growth. consecutive the strong up a in These a year, XXth from quarter quarterly XX% quarter revenues first basis, our record challenging posted all-time environment. quarter delivered across amidst first revenues EPS $X.XX, up XX% Sonic by exceptional year-over-year. of business driven first were On the During operational consolidated

We also efficiencies, entire enhance continue to permanently our operating our and from throughout further organization. initiatives reduce expenses see to benefits

As efforts, reported SG&A expenses improvement a year-over-year. low was a And first a profit record franchise result basis of X,XXX of this XX.X%, dealership of basis, these we gross segment quarter on as percentage a XX.X%. figure point

continued structure long-term picture, our Our chain in improvements. profitability and team industry we vehicle remains well sales expense demand, lingering initiatives, committed record ongoing with the results inventory effects result in the achieved of Taking spite as issues. of larger our we inflation, targeted optimizing to a have persistent profitability to constraints, drive the record look new these generate consumer at first to digital marketing supply and a headwinds, pandemic, of our as revenues improved as quarter Despite the and channels.

demonstrates XXXX. stated Additionally, on measures the realize continued the ability a of the business model. efficiencies inherent we plan growth $XX goal remain we by confident long-term to and positive Sonic and in for in operating execution billion of reach outlook our revenues total EchoPark, strategic our our organization, of Based that continue as the which operating we and implemented during our enhanced management pandemic, and an of height flexibility strength to cost

all-time in gross pay increase first Looking XX% profit was were decrease X% per quarter the dealership a driven XX% retail F&I up a on $X unit were up despite franchise in gross same-store in -- a at and gross our with segment. by quarter billion to revenues while XX%. customer profit gross a $X,XXX X% a from profit. same-store basis, billion, XXXX continues of franchise record franchise revenues profit dealership's up dealership year. $X.X F&I basis, On first XX% Parts year-over-year, our improved improve, record prior business, unit XX% up by volume, in Same-store service

XXXX, our or during plus luxury brand production to X,XXX first GP a that chain [Ph] Offsetting unit in unit vehicle and from segment industry the the inventory highest a limited quarter vehicle ago. approximately This dealership We of units, down in profit due new new decline contributed line sales which sales of On volume, XXX% vehicle slightly XX,XXX was levels. continue [$X,XXX] sales better of to inventory XX% retail represents quarter basis, per lower mix. SAAR new a XX supply same-store retail volumes, retail with the than to see gross the fourth year year-over-year disruptions vehicle decrease XX%. franchise our our units quarter new had cost and quarter typically supply trailing days same-store

XX dealership approximately supply from ago. had franchise Our used inventory segment X,XXX units, year days vehicle or units a XX,XXX up

record posted $XXX of million, quarter up first year-over-year. XX% Turning now EchoPark, revenues we to

solid expansion we to continued the of revenue addition the of new in the growth, end EchoPark XXXX. markets nationwide opening brand, automotive since In EchoPark three also locations

our Beyond EchoPark's we in months, fiscal network. footprint recent digital expanding grown have also

continued during first proprietary with the we of Since to rollout make this quarter, announced, launched markets. the geographic platform. e-commerce our last call, our select earnings in we national substantial previously platform, As echopark.com digital have progress

XX% of the out echopark.com. to been traffic our of today, at nationwide platform As rolled has now

Web positive with our sales. results of rate see representing and platform and buyers XX% XX% our to in out-of-market a continue customer feedback from online over We site new increase conversion early the

success recent our coverage this XX% target to the with as reaching by $XX both Keen, for in to This and at and Stephen our We part growth and continue the hires represent annual capital same coverage pre-owned generating commitment Tim of and key our year. date Chief of quarter to dedicated Upon human XXXX. other EchoPark we remain billion These Mr. vehicle long-term on the Automotive. continue to C-suite Carrelli strategic Automotive XXX,XXX EchoPark's EchoPark as first Sonic achieve necessary level, of EchoPark's remain invest appointment expansion future vehicles we success and of nationwide of unique delivering growth population a geographic we revenues support our in our growth. as of to Given the EchoPark. to digital to EchoPark's anticipate Technology Officer expansion plan includes by network, concept promotion

Turning now deposits $XXX our ended the first floor in hand. and to million balance plan sheet, quarter we cash with on

solid to XXXX. end generation that To success efficiencies our all X.X return targeted stock of of of and per of repurchasing Our unwavering capital summary, million payable report consistently marketing pleased by approved to on XX, performance, our demand, all of record quarterly e-commerce approximately maximizing our July flow sales strategy XXX% of allocation to continued throughout balanced initiatives, the I'm XX, success sales cash our our capital of on quarterly Board dividend consumer our position and to to contributed teammates. shares network, end, increasing strong XXXX. stockholders course, by have dividend financial June share, first that operations quarter a record and of our our since our Directors the and cash strong dedication stockholders enhanced In the XXXX, on results operating $X.XX talented reflect in

and guest guests, EchoPark our teammates, opening further forward revenue implementing for and best-in-class enhance to continuing profitability This our Thank to concludes committed experience, Automotive and execute remain any our our we to driving remarks, you may this stockholders. while long-term look have. answering our value our to questions you. and continuing to Sonic vision, we By long-term growth increased plans Automotive. realize we forward, look on we for strategic for growth As expect

Thank Instructions] America. Murphy you. [Operator We John of our question first comes have from with Bank

for on Smith This is Aileen John.

I ones your rather question wanted more to franchise Is [technical around [technical stores to what stores on disappointing. has than the give Can been is on through going on is [technical difficulty] little it old you a more trying bit it ground first ask EchoPark, and The pretty is of difficulty] to more there? difficulty] running up the a EchoPark flow getting new aggressively? or more focus running color

stores. the our Dyke This Jeff Thanks inventory [technical is question. from difficulty] Yes. for franchise

had a life. So, when EchoPark, inventory businesses [technical learned share was And really we Keen not two difficulty] built different first a we from to and overall. that lesson these Tim I that started

difficulty] but get headwinds there. [technical we're and So, difficulty] of industry that our with in second some educate that this the actually look to investor it, [technical at has and nothing a anticipation to facing, to at look everybody deck. do give I'll

one of And that is to slide all manufacturers inventories down we're first the I broke with disruption. with vehicle. main faced this just of overall coming slowing all that that of chain are is some headwinds a three have, headwinds look so, drivers said, we the One to know industry take the buckets, being three supply the ability industry sort acquire and today. down the together the let's are at We new vehicle low the there that -- from four-year-old into in

So, that's a major issue.

they're to be company. now lanes wane cars, [technical of inventories on call rental take model, pay is to car prices one the Customers of auction we to about to purchased a technicians, from would the some in Typically, model, something the going XX-year-old vehicle so order they're a to point -- auction a used at we nine and about for processes they're major companies That us new. what new model able in of of the that car four either bullet this and they're car a rental different auctions now moving are headwind approaching make payment, then their to would $XX,XXX maybe car. has second going last call. that. John more go what It's [technical because that as can to point to in we all difficulty] they time new And EchoPark the had the parts is used come moving The in customer because we're eight-year-old this on major difficulty] cars difficulty] depending down buying that putting to in overall, that headwinds. one up. selling we to or and last buying depreciation $XXX competitive point companies see -- acquire. different it's in a wait [Technical moved the happens, close rental price And cars up that upwards buying car The back car. the you are if that to at And difficulty] car lanes few in prices a see this difficulty] to on cars. $XXX handle [technical moving pushing deciding auction set to And issues XX% that and four-year-old car the payment on [technical lane. price causing finally, $XX,XXX a pre-owned a to here on

Whitman in mentioned launching Smith now and launching, play part. to we'll Steve e-commerce in echopark.com are This here our that So, new and details it results in and just David opening modernize some is of has The notes, minute, get into offering. can a fantastic. those We're talk his we're a just also as it minute. in offering, a our about been fantastic,

EchoPark CMO play that Bernacki, Dino from We a our perspective. SEM/SEO we'll are marketed and our price It's brand, launching we've new low launch never is process, really EchoPark a driving from Remember, a perspective. also of EchoPark. just marketing

our brand about we're launch excited summer, that. also will start so, And and entire very this

year from doing, So, happened, over slide, with on the As we've results? are sourcing some X% what initiatives last action to we're improved and non-auction the mix, percentage which overall that really plans things see what's XX% rolling his of taken, first the as the that above expect changes of to this can for of now we've you some team XX% we at brings the perspective and EchoPark. continue in number grow, and our keep a our to terms that profitability of as year, up total margins Tim and

They March, hub returned another leads they made having or in Denver location sort $XXX,XXX Our way. the good profitability April. of to

on take slide you do beginning segment. everything see mature that some hold deck, by that quarter of gave -- the the profitability XX done, we stores, can our that satisfaction highest And how working. that's in competitive a and sort we've first there a building for scores by taking, in the also finally, So, you these of the our the perspective. achieved investor of guest from pre-owned and we're Slide initiatives the we stores achieved all signs is to month then we've autotrading, we've and see highest And doing profit

David this the terminal today. EchoPark take our to solution But that are for are that and process. it's taking love teammate for those the to the as that that to we we're got snapshot those investing inventory in But that that right dealing prices term us, short come are the So, and our in we we're plans the we our very headwinds that just out customers headwinds deal time. point, far. know structure, right in a is and car with certain play will understand few facing levels. in talked some here industry, where very, facing months in EchoPark. that are with in believe the the a but extent. things believe going Well, announcements you've We a confident all [indiscernible]. about again, EchoPark back we so have Used going not appreciate sort action to We're continue And to not with into to we've And us. at seen

direction. we have headed certainly right where very like the we're things So, we in feel and are confident

an Yes, new traffic XX% far. We're national showing end the is very, with Web us the to of going to that results Jeff driving pleased in this site just incremental build new And new on to actually Web launched echopark.com. XX% Steve. rate. early site XXX% so progress conversion QX. now, on are what is very the The by of the said the We've

than our volume line incremental actually on online we drive to we're with on is unit And F&I at continue we mature with echopark.com, per going stores stores, echopark.com stores roll in it's penetration expectations, this seeing what out. is to us are exceeding So, first in new F&I for versus penetration higher that seeing in about our $XX.XX F&I those our in-store. as store. we're that the started

of Web So, to consumer it from them. have to far any then enables been so new XX% very, another interestingly, sold market. And very lastly, from a standpoint, And we've good that results anywhere the there. cars and just access over site our nationwide car shipped shipped inventory the online have

our turn So, which so, consumers, the to we're results. more appeal but really, in strong really extending on come our very to volumes, inventory, incremental is echopark.com, extending new early driving

some color. in couple to characterizing a the market and of helpful reported on of but supply suggest odd industry they really in that's one clearly weakness, -- really, from a larger little as saw the price book perspective us, of what one the quarter That's I was weeks fantastic. which in demand being vehicle everything seems that demand of constrained. Okay, going wanted to that on it still there, headwinds players the a given is ago

you kind you on a getting that So, -- the that available is price, be may than supply getting pushback equation the consumer the as be which anything any somewhat think other from perspective understandable? you there about demand would there of of the affordability lack other concerned consumer is that has And side mentioned, dynamics that's exhausted? of the

XX demand terms Yes. million weeks in I'd plenty a cars this of This There's there'll sold in the is demand accurate. Jeff don't think be that's there. America still pre-owned. few Dyke. of year comment to million made is ago. The disagree with XX I

is payment, a of and whole to is, $XXX you that like at a price. pricing. your run XX%, one deep It's we to and that demand kind really career, XX%. vehicle want in price the the $XXX like are, a it's study used And to selling I your half of somewhere you're to cars be used we always too pay used month is selling car and in vehicle average am XX% The Look, or used you car there. my close problem new new payment, it's pushing month So, if we're there.

a plenty There's month and someone $XXX to too high, it's vehicle those maybe that's of just -- our we're benefit change cetera, not of a a the the -- we've winds in growing. it in Ukraine and sold. prices used fall have that I and going not believe lot because -- a are there's wind been to -- new big out pricing causing And throw something the are out just recover. That's not it's back below what's way. too a car prices and been of think there. there's out in this a for certainly of whole Sonic close coming at all and look of environment hit that the that's could whatever, $XXX suffering things we norm, And payment. is that I demand. acquire a can't lot will You think to working Automotive, that that's it's don't way to on If model, demand And lot cars auctions, decades here going just used be in developing -- the the hit coming. that little are year. cars are And on $XX,XXX COVID a because don't to going but et that two there's vehicle the

how And of free car. new of see kind and both we for it; so, that's plenty demand

this that a not still having place want because add hires. to point experienced you and to look over to turn handle investment in staying to we're is EchoPark, that, you all that higher new throwing when Heath And team When to we're about Byrd. with we're it your need course. believe again staffed understand start volume than to having I better is just out the happens, at we the

And so, of that's forward out of as environment. we get you'll the going drags the current that one see

sell X,XXX not us when And the I -- but is staffing, in are mean, just Heath And staffed month. for department, we're talks to technicians we're service very about XX,XXX to not come to a going Yes. majority staffing the the back. difficult cars,

no We're we're and an triggers just We investment don't investment. in that that's terms see of consideration we could to do in EchoPark, continue a circumstances currently going that under are making to back. need under make to that. there And so, pulling but pull,

And We'll a bumpy couple with so, there are of deal couple quarters. of that.

color. taking Thanks Okay, great. questions. the very That's helpful for

bet. You

Gupta We Morgan have Rajat JP you. of now Thank Chase.

Your go line is now ahead. Please open.

all if for is clarification the that, there that plan used prices Thanks on contingency not in like EchoPark. place just maybe like expand Great. on did moderate. to But a hot

state [indiscernible] transform policy. take there like a just to to currently continue going lot business get but about we investment. five to to ongoing talked mix to steady and And like it's the You of time eight-year-old, old, a make of

a flexibility nimble like you how mean your have follow-up. should we on cost then going or expenditures that I terms of can a there? So, just capital about I front? in think like in the be structure And

Thanks one for car. nimble, the about facilities mean and normal the our choose. and have around XXX or our make ability tomorrow We roll of -- out question. This in I Very we so the a Jeff. if end the $XX.XX is the vehicle is X,XXX we adjust front to on to can certainly lose we and remember, headcount model four-year-old, a net times pack on out hours $XX stop

working our our experience that the we are because scores of right can so scores experience on higher One high, things the believe margins. guest we for so translate in that we're now high, are experience guest front-end

dollars now, $XXX positive bottom which line amount of the $X,XXX in add years. millions that with roll So, that going margin EchoPark we've move immediately. upwards front-end of to positive we're test to the the EBITDA we then coming doing a minus volume the move and more rolls mix, into if of where And see got change margin, would up, Austin market big the we're $XXX, $XXX can't our pricing

that if very last years. to tooled in trigger fast find adjustments cars. see at end our tell adjusted the make easily that to month in losses can net and that you've there. -- there's I We're positive confident are at to think our would or that I March, we just of We late that in to of levels significantly I we being with just it we're on profit a I earlier day, for of will and growing, model. on now if we line. for to is cautious make for new you But our when would more February we've the very just very hitting flexibility. the impact, talk guys March candid the to day the everybody time but retool, of we and actions at you We're slide sell thing show of time, to We're used preowned in kind like is do lot growing we the a from our effect, that you can tell the next going too store are opening at the want mistake. that's franchise problem it sort bottom call, a that couple just eight-year-old to the And of stores But on to December, than you XXXX. that to about January, in nimble the talked And us. XX, we're EchoPark. only of We so, this how want But got the easy told a by at position as of took us XX% long be very to lot to take right and little new cars EBIT. as for you for I a -- if don't committed at going this you side. and it takes cars pull adjust openings we mind if got a look you look this that We every a you the know business. it about It's look those, the page we're committed and

then because be you, could going if really And or XX%, all and well, telling not start doesn't intention. be XX% to that's it pulling back our well so, that we're mix you that

and of we on to a this bit quick make see in EBIT. in it's very at adjust a very nimble our If time. it's we some so, investment can changes the point behalf And longer we're time, little yes,

amazing that add mentioned, None ability and used $XX,XXX average And just is in a model have to that, prices strange ever. investment. us fortunately, more that right, money of permanently This we're these that this would than making with our the $XX,XXX this I dealerships, franchise the because price. company, all Smith. our are of think we David adjust Jeff is are long-term car investment. average, This

saying skating we the going are to puck not it is now. goes, to the as where be, is where right so, And

And so, we're and are making it. committed investments to those

Got it. Great.

Just a I'll auto just follow-up just on seeing lending. broader Are of industry more you be any. question. a

didn't I'm couldn't we sorry, the hear question. we

you Can now? me hear Yes.

Yes, yes, sir.

Yes.

Okay, great.

So, where pass I lender more just rising, had question. of on there stress signs just a be there increases rate the consumer? all broader question to to of on more there? to those the interest auto of seeing absorb some lenders an is of because affordability lending competitive. any developing you With environment, all more industry and to the Are rates some able stress just of those is agreements Or the able rate

front? any curious on developing Are that you're Just there as there -- to is seeing? concerns what

is but that the as So, that consumers? well of as small to which on seeing see to our prime macro we're degradation lower is is Byrd. a near portal What material see Are and of starting prime the from you little lower in tier credit This a impact upper a the bit franchise very to income income, brackets, starting bit little material. our EchoPark anything we're seeing both not there's Heath part and perspective you're any a not in on the consumers.

get Thanks. queue. in Got I'll it. Great. back

you. Thank

Thank you.

go are of Thank Jefferies. when you. Ethan ready. have Please you now ahead We Huntley

Bret. Huntley on for for our Ethan Thanks is questions taking This here.

missed you EchoPark sort I but provided it, strategic recently? your update any Sorry guys if of for alternatives have on

We have not.

can ticket trying what to that difference then, And just parts Okay. the about maybe and traffic when segment, doubt versus and in average on how had gauge inflation maybe go how the service we you much was to segment.

rolling I'm at quick. quarter. really you pay, dig you going mean, was customer if real up and just warranty I X% up look obviously, Warranty the some pay X%. customer numbers at for to for is

rate major in seen works parts changed the -- the we of not door first the have made So, in there's board. service that the not certainly -- increases is last on way terms quarter. the across pricing inventory in and tickets or And haven't

overall to so, if the to or And inflationary a very from impact little there growth, consumer gross service the perspective. would you be will,

about then, it, was talk franchise basis. we might Can just think a where you out term? to back on close just higher to $XXX-$XXX normalize? Got on structurally new sort here we'll Are you. things reset GPUs, you lastly see thank you And once think or those maybe I do going it sort same-store to maybe levels, start longer maybe levels a shaking of at of

third I would you going sit be that believe Yes, $X,XXX boards be see Jeff to inventory is of happening. flow will up. Ukraine are the know get the and inventory able the have maybe the to But second comes to the get quarter, is wane to towards of year. like the I not in going look hopefully, We it's of just great we're year over crapshoot things July dealer in They're the we're come of answers $X,XXX in for quarter a in sense to and world shape back this then on, that COVID seem inventory, hopefully and running better going there going there Dyke. discussions for darn Is to a yes, pretty of bit a the for are to terms May. kind And in that we're a to straight all tell a that end on at is going now. right of certainly level, the was not starts a expect don't pre-COVID to level I of some Common in shape things be levels. this don't and to of little to be you now pullback. of that mean and I May; sort June I good were us, we're be I when that end call car, getting, so little rest with almost pullback it manufacturers April, get speak. to a here. back the time? the some tightening settled, that

But that she quarters, as see is mid-X,XXX the to inflationary we'll steady I somewhere inventory continue margin issues range, goes. drive ballpark next as it as seeing. of So, how for in couple the where that goes tell in to you, going and sure, constraints create for be up we're the would we're

This Yes. is David.

As historically money they having lower to spend manufacturer keep as to they a incentives. partners about supply have, think our on way, less are levels an it than you they're this inventory right, industry, motivated at because

so, keep can keep of -- And balance if industry. can everybody a we our wins in they good inventory,

point Danny David is I'll further. this And one step Wieland. take

you two around ran a back we Sonic, GPU. quarter, the were we cars shy new for year, look First quarters supply just $X,XXX of new XX of If and or of at in days last first in

days new GPU. Second quarter, supply, we just XX-XX and it of was a $X,XXX were so

said you So, XX about point manufacturers that about low David, if what are days, the has take, BMW saying in somewhere range.

They're that XX park. XX, ball kind somewhere of to in

cars the and and are about settle levels going like into. not number the that that somewhere you new question longer-term get it the to rebuild $X,XXX the for able The about forward So, issues to is run they demand saying just what existing level. $X,XXX in when talked seems inventory beyond are supply to chain range back we manufacturers that to

than But higher pre-COVID. still significantly

color Great. you very here. appreciate really much. I the Thank

bet. You

Thank you.

ready. ahead you Joe please have Sir, are now when Stephens. We you. from Enderlin Thank go

the five And the for years? long then some getting service of longer how would as Thanks after any question. franchise impact be as on the we are nine how order signs parts the And XX-year-old our and over mix seeing -- the then, can for repairs? of warranty side? older taking to car part quarter, to you term, as that percentage guys. large a seeing the S,o vehicles from results EchoPark, you maybe are gets older, vehicles mix? and have follow-up, how Thanks. eight-year-old are less As coming thinking a Hi, and

Yes.

that have cars going to works. the drive, final the service older question, that's capacity, So, to with more the the we're service and through going fantastic vehicle higher throughput all and are go

seeing the keep volume and volume that. center a for part customers and they're lease part a big because returns, returns. of large Mercedes, our with we're their sort Lexus, -- center mix was side, it franchise of I've our especially That's mix. in the profit a lease On mean seen I us a of lot BMW absolutely, of and

And The the that There's franchise car up sure, it park vehicles franchise for X% more tell first Danny it question in of bought the from quarter. our inventory, our mix than for inside you at side no was from cars. XX% moving pointing And a number. maybe perspective. is so, really a I when was about was that. in out less very XXX, trading few the self-source overall low We're very, auction age. is X,XXX, franchise have

to And So, now Antonio something age were those nature, about we to you that level to market, trades. think what and that that EchoPark, of keep half we're to yes, selling growing. so, just we percent is of trades. vehicle or those the of to a percentage at represents take in it Tim, we're vehicles, sending certainly where of just sell But if Instead look San at sell eight-year-old them the can the turn auction, our I to starting we're off inventory. one beginning

the lot might the because having off we expanded to I X-year be that. grow and it X- from we've because able vehicles model. street So, to mean to we're growing purchasing a

trying And the So, figure used glove in into particular in as we're the of quire more now, buy next few the we're that we on able maybe what for and environment. year the inventory to going going to to quarters happen what's next fits be middle the cars into out of kind to off create street. of

would than go XX% don't could I aside guess. be my higher think any it'd that. it So,

this Yes, is David.

absolutely I want think and EchoPark look And five to at the stores that we're eight-year if to stores want. a that our it's remember they really at important to guest that old. from the customer-first standpoint experience you the are do customers look customers, trying what delivering our a --

payment. Of course, there's for reasons demand for and of because other that the lot a pricing

we're demand. before There's were demand. trying demand. to amount We so, huge talking that just And fill of about a

cars. on it by So, four-year-old that we than out just one the rather to want sitting focusing

Heath. that. And I'll this to add is

it's which people to total to as XX% vehicle four-year-old, and at about from is volume -- five, one five, six, total look one moving old, you used historical. but million the segment six-year out is If you the about David's of annual that these to point, XX the that the to And vehicles. are four eight-year-old

perspective, is So, about XX%. that's sort percentage vehicles a those the of big oil of from

from all Super helpful. you, Thank That's me. guys.

you. Thank sir. Yes,

Thank you.

from Rajat ready. go [Operator when you a We follow-up have of Sir, you. are now Gupta please Instructions] question ahead JPMorgan. Thank

I that seasonality on giving me Thanks quarter. give the wanted just for comments last an Great. to made question. you another update

gross you? think just around should I that good be changed has the line in XX%, like terms to mentioned of like there you profit is anything XQ a curious

the you Did seasonality say --

Of earnings?

seasonality of yes, earnings. Yes,

This XX%, from of full typically year the the is comes first of quarter. We Danny. pointed first XX% Sure. the to -- EPS

could GPUs what's with the and I uncertainty the that in for cadence year, see back mix. somewhat. particularly with But the this we pretty luxury think on think see I a had half production quarterly we elevated going understanding you of good the that in internally the that of vary

lease the for then second think quarter our bit the we improve luxury what see think for normally GPUs biggest the And to vehicles we fairly and backwards. the because throughout quarter. improve, is to that that if of third varied of back and the come bit because those would delivering hold if expect year our rating. equivalent. luxury first think in then And year, or in this fourth delay seeing see not of I the the quarter that vehicles, quarter we did start all, year, inventories in generally quarter the fourth some seasonality the disconnect all a to into is actuals. in of go of quarter that normally that you're I as as bit true is variable we'll little first EchoPark a and a first obviously, We a get contribution kind in we that component quarter go little where mix was similar a those elevated I -- of may that deliver of first the But was some that of be in is we

And the sold pulled we some point, we and have fact in Danny's quarter. last that year I pre-sold recognized were are that do think so of that these that to basically really first vehicles, cars

a year is So, quarter this first be earn very bit in is. than where unique higher the little a normally may it the percent that we

But can't range gave what others screen February. we what that higher we can't in people off to XX% far have that that is, when back there's not bit obviously XX% There's that. We they're are And fix listen to it, in you some say. versus so we that. It's that great. call out radar a and that the define we the attention, little paying

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color. Understood. for Great, the thanks

sir. Yes,

would Smith closing back like hand now some I David Thank it for to to remarks. you.

the thank great Have and appreciate call. you you, we everyone. And a in your participation Thank day.

Thank today's This attending for Thank conclude you today's call. you. presentation. does

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