Sonic Automotive fourth-quarter income drops to $28.1 million

Article by Anita Panait, on February 21, 2014

Sonic Automotive Inc. posted an 8-percent decline in net income in the fourth quarter of 2013 to $28.1 million, this despite posted surges in revenues and gross profits in all business fronts in the period. When adjusted for charges related to the impairment of property, equipment and franchise assets, Sonic's net income for the fourth quarter was $34.1 million, up 12 percent from the same period in 2012.

The company recorded a 6-percent rise in revenues for the quarter to $2.32 billion.  In a statement, Sonic executives called 2013 a transition year for the company, saying they were pleased with the performance given all the changes at their stores as it gets ready for a new customer experience initiative launching this summer.

"2014 is going to be another challenging year for our team with all of the changes we plan," Jeff Dyke, Sonic's executive vice president of operations, said in a statement. "But, if history is any indication, our team will succeed in executing these initiatives, and I can't wait to see them go to work. It's going to be fun."

Sonic is planning to roll out on July 1 its One Sonic-One Experience initiative, which is aimed at simplifying the purchase experience by using iPads to handle vehicle sales from start to finish. Executives expect the initiative to ultimately result to shorter transaction times, better customer satisfaction, lower employee turnover and higher sales.

Sonic also plans to roll out stand-alone used-vehicle stores this year, the first of which will be launched in Denver during in fourth quarter. "As we have demonstrated over the last several years, one of our core competencies and competitive advantages is our ability to execute in the pre-owned space," Sonic President Scott Smith said in the statement.

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