AutoNation Inc., the Fort Lauderdale, Florida-based new-vehicle retailer, said its second quarter profit rose – but it missed analyst estimates because of increased costs.
The company’s stock went down 8.2% to $55.82 at the close in New York, the largest dip in five years – since March 2009. The company increased spending on its online sales system – it mulls a $100 million investment during the next period.
“We’re in an investment period in brand and digital,” said Chief Executive Officer Mike Jackson. “You have to make an adjustment as an investor whether you think that will be a worthwhile investment or not.”
AutoNation’s CEO added that his company wants to shed resilience on companies like TrueCar Inc. and Cars.com, taking its own websites from a mostly informational outlet to a place where interested customers could make down payments, service appointments or get trade-in offers. They also want to be able to let buyers reserve online a car by the year’s end.
Revenue went up by 8.2% to $4.79 billion, with profit weighed down by an 8.4% sales cost increase to $4.04 billion. The company’s net income climbed 12% to $100.4 million, or 83 cents a share, which was lower than what analysts anticipated – with an average of 87 cents a share.