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Auto Retailers Group Lower As AutoNation Warns

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Auto Retailers Group Lower As AutoNation Warns

Shares of AutoNation, Inc. (NYSE: AN) plunged more than 10 percent on Wednesday after the company issuing a disappointing fourth quarter outlook.

AutoNation, the nation's largest dealership operator, said that it sold 35,962 vehicles throughout December. The company noted that while this represents a 9 percent increase versus the same period a year ago, sales were boosted by "significant retail discounts" - especially within the premium segment.

AutoNation added that for the fourth quarter, it expects to report a decline in both new and used gross profit per vehicle in the range of $250 to $300.

"The fourth quarter industry sales environment was more push versus pull," Mike Jackson, CEO of AutoNation said. "As a consequence, we expect to report significant margin declines for the fourth quarter in both our new and used retail unit sales. We have begun, and will continue through the first quarter, to take the necessary steps to align our costs, inventory, and pricing strategy to adjust to the current market. In 2016, we expect industry new vehicle unit sales will continue to exceed 17 million."

AutoNation's warning prompted a mass sell-off in the auto retailers group. Shares of Lithia Motors Inc (NYSE: LAD) were lower by nearly 10 percent, Group 1 Automotive, Inc. (NYSE: GPI) were lower by nearly 9 percent, Asbury Automotive Group, Inc. (NYSE: ABG) were lower by nearly 8 percent, Penske Automotive Group, Inc. (NYSE: PAG) were lower by around 7 percent.

Some auto retailers were seeing less severe losses in their stocks. Shares of CarMax, Inc. (NYSE: KMX) were lower by 4.50 percent while shares of Sonic Automotive Inc (NYSE: SAH) were lower by 4.05 percent.

Posted-In: Auto Retailers AutoNation Luxury Vehicles Mike JacksonNews Intraday Update Movers Best of Benzinga

 

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