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Sonic Automotive Inc., citing timing and market circumstances, mentioned it has accomplished a strategic overview of its EchoPark used automobile unit with out taking additional motion.

An analyst protecting the publicly traded retailer final 12 months speculated that the overview may have been a precursor to an EchoPark spin-off.

On Thursday, Sonic gave the EchoPark replace by saying decrease income however greater income for the second quarter.

“After fastidiously evaluating a variety of alternate options, the corporate has concluded its overview and the board has decided that the timing and present market circumstances don’t align with the corporate’s worth creation goals for the enterprise,” officers mentioned. Sonic in a press release.

“Sonic will proceed to execute on its growth plans for EchoPark and can periodically monitor market circumstances and think about potential alternatives to maximise long-term shareholder worth as they come up.”

Sonic additionally mentioned it is backing off 2025 income and different targets for EchoPark 2025 amid present circumstances. The retailer had beforehand projected that the EchoPark areas would account for the sale of 575,000 used autos and $14 billion in annual income by the top of 2025.

“Whereas the corporate stays assured in EchoPark’s long-term prospects, the present market setting has brought about the corporate to regulate EchoPark’s projected income progress and delay attaining its beforehand said monetary targets past 2025,” the corporate mentioned within the assertion.

Sonic president Jeff Dyke mentioned within the assertion that EchoPark, which launched in 2014, stays on observe to achieve protection of 90 p.c of the US inhabitants by 2025.

The retailer first revealed the EchoPark strategic overview in July 2021. No updates on the strategic overview have been supplied since that announcement. Sonic had retained funding financial institution Lazard and legislation agency Kirkland & Ellis LLP as monetary and authorized advisers.

In Might, Sonic opened an EchoPark retail heart in St. Louis. Sonic operates 50 EchoPark areas throughout the nation. That features 11 exclusive-use Northwest Motorsports shops in Washington, Idaho and Montana that had been acquired as a part of Sonic’s December 2021 buy of RFJ Auto Companions Holdings.

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