Crosstown Auto Centre in Edmonton, Alta.
Edmonton-based AutoCanada, the largest multi-location and first publicly traded franchise automobile dealership group in Canada, reported a big increase in its Q2 revenue and gross profit.
Revenue from existing and new dealerships increased by 75.6 per cent or $351.8-million to $816.9-million in the second quarter of 2015, from $465.1-million in the same quarter in 2014, according to figures in the company’s Q2 earnings release.
Gross profit from existing and new dealerships increased by 66.8 per cent or $52-million to $129.7-million in Q2 2015, from $77.7-million in the same quarter in 2014.
Same store used vehicle retail revenue and same store parts, service and collision repair revenue also increased in the second quarter of 2015.
But same store new vehicle retail was down by 14.1 per cent —$28.5-million — to $173.7 million in the second quarter of 2015, from $202.2-million in the same quarter in 2014.
The company attributes an accumulation of new vehicle inventory from the reduced sales volume in Q1 to a slowdown in Q2 sales.
“Although the second quarter and the Western Canadian economy in particular provided great challenges, as evidenced by declines in our gross margin percentages and earnings per share,” said Tom Orysiuk, President and CEO of AutoCanada, “and same store sales revenue and gross margins were weaker than the previous quarter, we are determined to adjust to meet these challenges.”
Orysiuk continued: “We were pleased to see that our efforts in the quarter resulted in same store gross margin growth in both used vehicles and parts and service operations as well as significant improvements in operating expenses relative to gross profit. These gains notwithstanding, we are not satisfied and are working closely on a dealership by dealership basis to make the appropriate market sensitive adjustments to maximize all volume, gross and expense reduction opportunities.”
The company also said it will continue with its dealership acquisition activities and consolidating the retail automotive industry.
