Earnings call transcript: Sonic Automotive misses Q3 2026 EPS forecast as shares fall

Sonic Automotive delivered a third-quarter 2026 earnings report that fell short of Wall Street expectations, with adjusted earnings per share (EPS) at $1.30, missing the forecasted $1.69. Despite this, the company reported record revenue of $4.0 billion and record gross profit of $617.5 million. However, revenue and same-store franchise revenue fell short of forecasts, with franchise revenue down 3% year-over-year and same-store revenue declining 2%.

Fixed operations gross profit reached a record $265.4 million, while EchoPark and Powersports both showed record or near-record results. The company attributed the earnings miss to higher SG&A costs, including loaner-car expenses, gas inflation, and AI-related spending. Sonic's shares fell 2.98% to $61.24 in premarket trading following the report.

Despite the earnings miss, the stock trades at a low P/E ratio of 9.79 and a PEG ratio of 0.25, suggesting potential value relative to its growth prospects. The company expects modest same-store gross profit growth in the franchise business, with fixed operations growth around 3% or slightly better, and plans for further EchoPark store openings and marketing campaigns.