CDK Outage Costs Sonic $22M, A Van For A Paralyzed Shooting Victim, Gen Z Buying Homes

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Tuesday’s here, and we’re rolling through the morning talking about Sonic’s Q2 income growth, Sutherlin Auto donating a custom van to a paralyzed shooting victim, and the surprising fact about Gen Z and home ownership.

Show Notes with links

• Sonic Automotive Inc. experienced a remarkable 76% YoY increase in second-quarter net income, hitting $41.2M, nearly doubling from $23.4M despite setbacks from a cyberattack and a system outage in June.
  • The group sold 27,026 new vehicles (down 3.3%), 25,668 used vehicles at franchise stores (up 1.9%), and 16,641 used vehicles at EchoPark stores (down 2.6%) in Q2​​.
  • Sonic estimated the CDK software outage cut net income by $22.2 million, with $11.6 million in pretax charges for extra employee compensation.
  • Other charges included $3.6 million for hail and storm damage, $1.4 million impairment for EchoPark locations.
  • In March, Sonic launched an initiative to add 300 technicians in 2024, aiming to boost annual fixed-ops gross profit by $100 million, and so far have netted 131 techs in Q2.
• Toyota of Montgomery of Sutherlin Automotive Group donated a wheelchair accessible van to Amy Dicks, an innocent bystander who was paralyzed after being caught in a highway shootout back in April of this year.
  • Amy Dicks was struck by a bullet while driving to work, paralyzing her from the chest down.
  • The donation was made on August 5 as she returned home from months of rehabilitation and the van aims to help Dicks regain mobility and independence.
  • Brett Sutherlin, CEO of Sutherlin Automotive Group, visited Amy in the hospital and expressed deep admiration for her resilience and emphasized the importance of the support.
  • "Providing her with this accessible van is a small gesture to help someone who has faced such tremendous adversity. After meeting her and understanding her situation, it became clear how vital this support is."  Sutherlin stated.
• Gen Z is buying homes at a faster rate than older generations, particularly in the Midwest, with the highest purchase rates in Indianapolis, St. Louis, and Cincinnati, and the lowest in California and the Northeast.
  • Nearly 28% of 24-year-olds owned a home in 2023, surpassing millennials and Gen X at that age, and almost 40% of new mortgages in 2023 went to buyers under 35.
  • Indianapolis had the highest share of Gen Z homeowners at 1.6%, followed by St. Louis and other metro areas like Jacksonville and Kansas City.
  • San Francisco, New York City, Los Angeles, and Boston had the lowest rates of Gen Z homeownership at around 0.1%, with median home values for new Gen Z homeowners exceeding $1 million in San Francisco​​.
  • Gen Z benefits from remote work and lower living costs in certain areas but faces high student debt and housing shortages​​.

Hosts: Paul J Daly and Kyle Mountsier

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