AutoNation, Inc. (AN) Misses Earnings Estimates Due to ‘Digital’ Spending

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.

AutoNation, Inc. (NYSE:AN)

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.

Disclosure: none

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!