AutoNation CEO Explains How The Company Benefits By Not Giving Guidance

AutoNation, Inc. AN came out with mixed second-quarter numbers on Wednesday, reporting EPS of $1.01, slightly below analysts' estimates of $1.01.

Mike Jackson, AutoNation chairman and CEO, was on CNBC following the earnings declaration to weigh in on the results and discuss benefits of not giving guidance.

19th Quarter Of Double-Digit Growth

"It was a record second quarter for us," Jackson began. "It's a 20 percent increase in earnings per share; it is the nineteenth quarter in a row of double-digit growth. And in that journey of 19 in a row, 14 of them beat estimate, 4 were short. We don't give guidance. I want the freedom to change investment strategy and change expense structure for what's the best long-term interest of the company."

Related Link: Vroom Raises $54 Million Series B Round

AutoNation Express

"And in this quarter, we accelerated our investment in AutoNation Express since its been extremely well received by our customers. And what we had said we are going to roll out in a year, we have completed 100 percent by June 30. Now, it cost a little bit more to do that, but our customers have embraced it, our employees have embraced it."

Benefits Of Not Giving Guidance

He continued, "So, I think there's a lot of benefit in not giving guidance and in just accepting sometimes it's going to be a little bit difference between what the analysts say and what we actually do because we haven't told them a number."

Jackson elaborated on how not giving guidance helps, saying, "There is a price to pay for giving quarterly guidance. In that, during the quarter, you have to constantly evaluate how you are performing versus what you said, rather than simply running the company for the long term."