AutoNation Inc. plans to reduce its selling, general, and administrative (SG&A) expenses to between 66% and 67% of revenue by the end of 2026 [1].
This cost-cutting strategy is designed to protect profitability and sustain earnings growth while the company navigates a challenging automotive market [1, 2].
During a second quarter 2026 earnings call, CEO Michael Manley said the company is optimizing operating costs. The firm is targeting a 150-basis-point improvement in SG&A efficiency [2]. To support its infrastructure and growth, AutoNation has established a capital expenditure plan for 2026 ranging from $300 million to $325 million [2].
Financial results for the second quarter of 2026 showed an adjusted earnings per share (EPS) of $5.56 [3]. This follows a period of volatility, with the CEO previously citing an adjusted EPS of $4.69 [2]. The company also reported adjusted free cash flow of $256 million [2].
Manley highlighted the company's resilience despite broader industry headwinds. "Despite a challenging Q1 for the industry... AutoNation delivered its fifth consecutive quarter of year-over-year growth in adjusted earnings per share," Manley said [2].
Management expects that the combination of efficiency gains and cost controls will drive adjusted EPS growth throughout the second half of 2026 [1]. The company continues to focus on balancing its capital investments with the need for leaner operations, a strategy intended to stabilize margins as consumer demand shifts.
“AutoNation delivered its fifth consecutive quarter of year-over-year growth in adjusted earnings per share.”
AutoNation's focus on SG&A efficiency indicates a pivot toward operational leaness to offset market volatility. By capping expenses as a percentage of revenue and setting a specific basis-point improvement goal, the company is attempting to decouple its profitability from the unpredictable fluctuations of new and used vehicle sales volumes.
