Toronto, Ontario — In this weekly Tuesday Ticker, AutoCanada announces its Q2 2024 results and says it’s performing a “strategic review” of its non-profitable and non-core operations, while Rivian stocks dip due to a production pause.
About AutoCanada
AutoCanada’s Q2 2024 total sales decreased 8.8 percent year-over-year, and the company is performing a “strategic review” of its non-profitable and non-core operations.
Total sales dropped to $1.6 billion; diluted loss per share was $1.47. Canadian operations experienced declined revenues, gross profits and adjusted EBITDA. Contributing factors were the CDK outage as well as OEM inventory, specifically Stellantis and economic uncertainty.
“As these factors evolved, we were unable to implement our strategic initiatives swiftly enough to adequately counter increasingly challenging market dynamics,” said Paul Antony, CEO of AutoCanada. “Our recent performance has not met our own expectations and it has become clear to me that we need to further deepen our focus on both deleveraging and the profitability of our core dealership operations.”
Antony said AutoCanada engaged Bain and Company to accelerate key initiatives in the company’s Project Elevate. He also said M&A and return of capital initiatives have been halted; a freeze has been implemented on discretionary spending and the company is actively reviewing strategic alternatives for all non-core and underperforming assets.
“We’ve kind of drawn a line in the sand as an organization that, if a store is not meeting our expectation, we need to find a more permanent solution.”
The company simultaneously announced the appointment of Sam Cochrane as chief financial officer.
“Our Canadian Operations were negatively impacted by the CDK outage, an erosion in consumer purchasing power, lack of demand for certain brands, reduced service repair orders, and a softening used vehicle market,” clarified Cochrane.
Production pause
Rivian has paused production on its commercial delivery vans for Amazon due to a parts shortage, according to reports from Reuters.
The companies did not specify the specific part or what supplier is involved with the halt, though a Rivian spokesperson said the company expects to recover all missed production.
The EV maker’s stock dropped more than four percent following the announcement. As of Monday at 11 a.m. ET, shares of Rivian traded at US$13.30 per share, down 36.92 percent year-to-date. Shares of Rivian have dropped more than 20 percent in the past month alone.
Amazon has a standing order with Rivian for 100,000 electric delivery brands. As of late 2023, Amazon has received 10,000 of those vans. In 2023, sales to Amazon accounted for nearly 20 percent of Rivian’s annual revenue.
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