CHARLOTTE, N.C., July 14 /PRNewswire-FirstCall/ -- Sonic Automotive,
Inc. (NYSE: SAH) today revised the Company's earnings target for the year
ending December 31, 2008. The Company now expects that its diluted earnings
per share from continuing operations for the year will be in the range of
$1.65 to $1.85.
This lower earnings target is primarily a reflection of the difficult
market for all segments of our business. The Company currently expects
diluted earnings per share from continuing operations for the quarter ended
June 30, 2008 to be in the range of $0.48 to $0.50.
The difficult retail market for new and used vehicles resulted in
lower-than-anticipated sales volume for the Company in the second quarter
of 2008. The Company estimated an annual new vehicle industry sales rate of
approximately 15.5 million vehicles for 2008 when establishing its original
earnings target for this year. The expected sales rate for vehicles and the
parts and service business is now trending significantly lower than what
was originally projected. The Company anticipates that the present
difficult market will continue for the remainder of the 2008 calendar year.
Expense reduction initiatives have intensified, but the Company expects
that lower gross profit levels will result in elevated SG&A rates as a
percentage of gross profit.
B. Scott Smith, the Company's President stated, "Although the retail
environment is more challenging than anticipated and profit projections are
below what we expected, our strategy is sound and cash flow and liquidity
are strong. The economic environment -- notably high gas prices and low
consumer confidence -- has caused lower overall demand and a pronounced
shift from large trucks and SUVs to smaller passenger cars. This has put
pressure on new and used vehicle volume and margins. In addition, we are
seeing a softer parts and service business environment than we originally
anticipated. We are actively reducing costs and continue to take steps to
stimulate demand in the higher margin segments of our business."
MANAGEMENT WILL BE HOLDING A CONFERENCE CALL TO DISCUSS SECOND QUARTER
RESULTS ON TUESDAY, JULY 29 AT 11:00 A.M. EASTERN TIME. TO PARTICIPATE,
PLEASE DIAL 877-791-3416. INTERNATIONAL CALLERS DIAL 706-643-0958 -- OR YOU
CAN ACCESS THE CALL AT http://www.sonicautomotive.com .
About Sonic Automotive, Inc.
Sonic Automotive, Inc., a Fortune 300 Company, is one of the largest
automotive retailers in the United States operating 166 franchises. Sonic
can be reached on the Web at http://www.sonicautomotive.com .
Included herein are forward-looking statements, including statements
with respect to anticipated diluted earnings per share from continuing
operations, expense levels, gross margin rates and profit levels, as well
as anticipated industry vehicle sales conditions. There are many factors
that affect management's views about future events and trends of the
Company's business. These factors involve risk and uncertainties that could
cause actual results or trends to differ materially from management's view,
including without limitation, economic conditions, risks associated with
acquisitions and the risk factors described in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2008. The Company does
not undertake any obligation to update forward-looking information.
Contact:
David Cosper, Chief Financial Officer of Sonic Automotive, Inc.
(704) 566-2400.
Greg Young, VP of Finance of Sonic Automotive, Inc. (704) 566-2489.
SOURCE Sonic Automotive, Inc.
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Related links:
http://www.sonicautomotive.com
http://www.prnewswire.com/comp/125546.html /
CONTACT:
David Cosper, Chief Financial Officer,
+1-704-566-2400, or Greg Young, VP of Finance, +1-704-566-2489,
both of Sonic Automotive, Inc.
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