AutoNation, Inc. (NYSE:AN) came up with its second quarter earnings report on Thursday. Speaking on CNBC, the company’s CEO Mike Jackson, said: “we’re in a major investment period in our brand in digital capabilities. We have not given analysts any visibility as to exactly when the cost of those investments will fall in our reports. So, from time to time we’re going to have a disconnect with the analysts on a quarterly basis” when asked about missing analyst expectations reporting a net income of $0.83 a share, versus an estimate of $0.87.
The Fort Lauderdale, FL based largest U.S. auto dealer group reported second quarter revenue of $4.79 billion up 8% from last year and net income per share of $.083, up by 14% on the previous year. This was the 15th straight quarter when AutoNation, Inc. (NYSE:AN) posted a double digit growth.
Mr. Jackson pointed out that the analyst had underestimated the amount the company would be spending in the second quarter on its online marketing efforts. During the first quarter AutoNation, Inc. (NYSE:AN) had disclosed that it has planned $100 million investment spread over several quarters, which would be spent on increasing its brand’s digital capabilities and unifying the company under one brand from coast-to-coast.
Commenting on the future trajectory of the company, Mr. Jackson added:
“What we see, what the consumer expects in the future from a company, especially a retailer, is one seamless experience. Not an online experience and an in-store experience. One experience.”
He also mentioned that a huge disconnect lies between what a consumer sees and experiences in a digital store versus a retail store and that AutoNation, Inc. (NYSE:AN) is going to bridge the gap. The company is counting on the launch of its transactional digital website at the end of the year, as a big step in this direction.