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 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

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!