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AutoNation (AN) Declares Cost-Saving & Restructuring Plan

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AutoNation, Inc. (AN - Free Report) has announced its cost-saving and restructuring plan to enhance profitability, and efficiency. The largest automotive retailer of the United States is consolidating its regional structure from three regions to two and the company expects this restructuring to result in annual savings of $50 million. The company anticipates that through this move it is likely to be better placed to attain long-term success.

The company believes automotive retail to remain challenging in 2019. Corporate and regional restructuring, as well as the cost-saving plan, will aid it in tackling challenging market conditions efficiently.

Per Reuters, analysts believe that an anticipated slowdown in vehicle sales in 2019 might have prompted the company to opt for such restructuring moves. Per National Automobile Dealers Association, rising vehicles prices and higher interest rates may restrict vehicle purchase plans of customers, and new vehicle sales are likely to decline in the United States.

Due to this restructuring plan, the chief operating officer Lance Iserman and the chief technology officer Tom Conophy will leave the company, effective immediately. Dennis Berger, the chief human resource officer, will leave the company later this month. A veteran of the company, James Bender has been appointed as the executive vice president of sales.

AutoNation has underperformed the industry it belongs to in the past six months. The company’s shares have lost 25.4 % compared with 19.4% decrease recorded by the industry.

AutoNation currently has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the auto space are Advance Auto Parts, Inc. (AAP - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and CarGurus, Inc. (CARG - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Advance Auto Parts has an expected long-term growth rate of 12.1%. Over the past year, shares of the company have increased 44.7%.

Fox Factory has an expected long-term growth rate of 17.9%. Over the past year, shares of the company have risen 57.4%.

CarGurus has an expected long-term growth rate of 5%. Over the past year, shares of the company have rallied 12.5%.

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