AutoNation Extends Adjusted Earnings Streak as GAAP Profit Falls

The Tip Desk · October 30, 2026 · 4 min read

Adjusted diluted EPS rose 2% to $5.11 a share for a seventh straight year-over-year gain, while GAAP diluted EPS fell 14% to $4.87.

AutoNation, Inc. (AN), one of the largest automotive retailers in the United States, reported third-quarter 2026 revenue of $7.010 billion, relatively flat versus $7.037 billion a year earlier.

GAAP diluted earnings per share fell 14% to $4.87 from $5.65. Adjusted diluted EPS rose 2% to $5.11 from $5.01, the seventh consecutive quarter of year-over-year growth in that measure. Chief Executive Officer Mike Manley said the team delivered another solid quarter of adjusted-EPS growth.

The GAAP decline reflected a higher year-ago base that included $30.2 million after-tax of CDK cybersecurity insurance recoveries. Third-quarter 2025 adjusted results also included $6.0 million after-tax of acquisition-related expenses. Third-quarter 2026 adjusted results excluded $6.6 million after-tax of self-insurance losses tied to weather-related events and $1.4 million after-tax of customer-journey transformation costs.

Gross profit declined 2% to $1.208 billion from $1.238 billion. Operating income fell 16% to $314.6 million from $372.4 million. Net income fell 25% to $162.3 million from $215.1 million. Adjusted operating income fell 7% to $322.7 million from $348.1 million, and adjusted net income fell 11% to $170.3 million from $190.9 million.

Same-store revenue fell 2% to $6.805 billion from $6.973 billion. Same-store gross profit fell 5% to $1.170 billion from $1.228 billion. Same-store new-vehicle retail units fell 5% to 62,356 from 65,836, and same-store used-vehicle retail units fell 6% to 63,703 from 67,988. Combined retail units fell 4.3% to 129,339 from 135,085.

New-vehicle revenue fell 2.5% to $3.330 billion from $3.416 billion, and new-vehicle gross profit fell 7.9% to $139.1 million from $151.0 million. New-vehicle gross profit per unit retailed fell 4.6% to $2,176 from $2,281. Used-vehicle revenue rose 1.0% to $2.036 billion from $2.016 billion, but used-vehicle gross profit fell 9.4% to $104.1 million from $114.9 million. Finance and insurance, net, revenue fell 6.9% to $349.0 million from $374.8 million.

Parts and service revenue rose 5.2% to $1.290 billion from $1.226 billion. Parts and service gross profit rose 3.3% to $616.6 million from $597.0 million, a record After-Sales gross profit. Parts and service accounted for 51.1% of gross profit, up from 48.2% a year earlier. New vehicle’s share of gross profit fell to 11.5% from 12.2%.

AutoNation Finance income rose to $15.4 million from $1.5 million a year earlier. The company said the portfolio grew more than 40% year over year and profit rose 10 times. Total interest margin was $43.9 million versus $34.0 million. Auto loans receivable, net, were $2.784 billion at September 30, 2026, up from $1.954 billion a year earlier.

Segment revenue was mixed. Domestic revenue fell 7.1% to $1.807 billion from $1.945 billion, and Domestic segment income fell 19.4% to $65.5 million from $81.3 million. Import revenue rose 3.6% to $2.252 billion from $2.173 billion, with Import segment income of $115.3 million. Premium luxury revenue rose 2.8% to $2.630 billion from $2.559 billion, with Premium luxury segment income of $150.6 million. Retail new-vehicle units in Domestic fell 12.3% to 17,196 from 19,610. Import and Premium luxury new-vehicle units were essentially unchanged.

In the quarter, AutoNation repurchased 0.8 million shares for $162.9 million. For the nine months ended September 30, 2026, it repurchased 3.1 million shares for $620 million, a 9% reduction of shares outstanding. Diluted weighted average shares were 33.3 million in the quarter. In October, the board authorized an additional $1.0 billion of share repurchases; as of October 28, $1.4 billion remained available.

Adjusted free cash flow for the nine months was $739.0 million, or 141% of adjusted net income. Liquidity was $1.5 billion, including $51 million in cash. Covenant leverage was 2.71 times. New days supply rose to 52 days from 47 days a year earlier; used days supply rose to 43 days from 37 days.