Exhibit 99.1

Sonic Automotive, Inc. Continues Strong Operating Trend in Second Quarter and Raises

Full Year Earnings Guidance

CHARLOTTE, N.C. – July 31, 2007 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that second quarter 2007 earnings from continuing operations were $30.0 million, or $0.65 per diluted share, compared to $17.8 million, or $0.41 per diluted share*, in the prior year period.

“Our performance continues to validate the effectiveness of our key operating initiatives,” said President and Chief Strategic Officer B. Scott Smith. “Our gross margin rate increased to 15.6% as a result of continuing growth in our higher-margin used vehicle, fixed operations and F&I departments. In addition to these revenue-oriented initiatives, we continue to see consistent reductions in our SG&A expenses as a percentage of gross profit. As a result of our strong performance over the first half of the year and our outlook for a stable operating environment over the second half, we are increasing our target for 2007 earnings per share from continuing operations to a range of $2.50 to $2.60. This does not include the impact of any unannounced acquisitions.”

Sonic’s Board of Directors has authorized an additional $30 million to be used in the Company’s ongoing share repurchase program. Scott Smith said, “Sonic Automotive has maintained an active share repurchase program for a number of years as a means of offsetting dilution in the Company’s stock, returning capital to shareholders and taking advantage of short-term volatility in the Company’s share price. We will continue to execute this program in conjunction with our stated objectives for managing the Company’s capital structure.”

Presentation materials for the Company’s earnings conference call at 11:00 A.M. (Eastern) on July 31, 2007 can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “For Investors” tab and choosing “Webcasts & Presentations” on the left side of the screen.

To access the live broadcast of the conference call over the Internet go to: www.sonicautomotive.com.

A live audio of the conference call will be accessible to the public by calling (877) 791-3416. International callers dial (706) 643-0958. Callers should dial in approximately 10 minutes before the call begins.

A conference call replay will be available one hour following the call for seven days and can be accessed by calling: (800) 642-1687 (domestic) or (706) 645-9291 (international), conference call ID #6967100.

 

 

* During the second quarter of 2006, the Company recorded pretax charges of $27.6 million between continuing and discontinued operations related primarily to certain decisions made to improve the strategic focus of the Company.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 173 franchises and 37 collision repair centers. Sonic can be reached on the Web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated SG&A expense reductions, anticipated earnings per share from continuing operations, anticipated future operating environment for the remainder of 2007 and potential future share repurchases. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management’s view, including without limitation, economic conditions, risks associated with acquisitions and the risk factors described in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2007. The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

(in thousands, except per share, unit data and percentage amounts)

 

     Second Quarter Ended     Six Months Ended  
     6/30/2007     6/30/2006     6/30/2007     6/30/2006  

Revenues

         

New retail vehicles

    $ 1,172,400     $ 1,173,471     $ 2,244,611     $ 2,210,772  

Fleet vehicles

      100,784       97,146       189,755       183,631  

Used vehicles

      364,062       346,424       694,297       656,632  

Wholesale vehicles

      107,828       131,250       222,619       263,725  
                                

Total vehicles

      1,745,074       1,748,291       3,351,282       3,314,760  

Parts, service and collision repair

      290,916       280,100       584,819       553,828  

Finance, insurance and other

      54,360       45,502       103,118       91,381  
                                

Total revenues

      2,090,350       2,073,893       4,039,219       3,959,969  

Total gross profit

      325,233       311,755       633,026       607,120  

SG&A expenses

      241,244       248,771       479,236       481,366  

Depreciation

      8,626       6,806       14,389       11,604  
                                

Operating income

      75,363       56,178       139,401       114,150  

Interest expense, floor plan

      17,348       15,832       33,586       28,130  

Interest expense, other

      8,912       9,909       17,606       20,706  

Other (expense) / income

      86       (3 )     96       (665 )
                                

Income from continuing operations before taxes

      49,189       30,434       88,305       64,649  

Income taxes

      19,210       12,586       34,439       25,666  
                                

Income from continuing operations

      29,979       17,848       53,866       38,983  

Discontinued operations:

         

Loss from operations and the sale of discontinued franchises

      (5,159 )     (8,780 )     (10,725 )     (15,277 )

Income tax benefit

      1,548       3,120       3,218       5,564  
                                

Loss from discontinued operations

      (3,611 )     (5,660 )     (7,507 )     (9,713 )
                                

Net income

    $ 26,368     $ 12,188     $ 46,359     $ 29,270  
                                

Diluted:

         

Weighted average common shares outstanding

      47,987       46,270       47,963       46,238  

Earnings per share from continuing operations

    $ 0.65     $ 0.41     $ 1.17     $ 0.89  

Loss per share from discontinued operations

    $ (0.08 )   $ (0.12 )   $ (0.16 )   $ (0.21 )
                                

Earnings per share

    $ 0.57     $ 0.29     $ 1.01     $ 0.68  
                                

Gross Margin Data (Continuing Operations):

         

Retail new vehicles

      7.3 %     7.8 %     7.3 %     7.7 %

Fleet vehicles

      2.6 %     2.5 %     2.4 %     2.8 %

Total new vehicles

      6.9 %     7.4 %     6.9 %     7.3 %

Used vehicles

      9.3 %     9.8 %     9.5 %     9.9 %

Parts, service and collision repair

      51.4 %     50.1 %     50.5 %     49.9 %

Finance, insurance and other

      100.0 %     100.0 %     100.0 %     100.0 %

Overall gross margin

      15.6 %     15.0 %     15.7 %     15.3 %

SG&A Expenses (Continuing Operations):

         

Personnel

    $ 139,910     $ 140,299     $ 274,668     $ 276,055  

Advertising

      16,706       16,599       32,204       31,090  

Facility rent

      25,694       25,487       51,421       49,157  

Other

      58,934       66,386       120,943       125,064  
                                

Total

    $ 241,244     $ 248,771     $ 479,236     $ 481,366  
                                

Unit Data (Continuing Operations):

         

New retail units

      35,454       37,223       67,465       68,923  

Fleet units

      4,667       4,470       8,412       8,414  

Used units

      18,186       17,866       35,147       34,010  

Wholesale units

      11,807       13,932       24,626       27,309  

Average price per unit:

         

New retail vehicles

      33,068       31,525       33,271       32,076  

Fleet vehicles

      21,595       21,733       22,558       21,824  

Used vehicles

      20,019       19,390       19,754       19,307  

Wholesale vehicles

      9,133       9,421       9,040       9,657  

Other Data:

         

Floorplan assistance (continuing operations)

    $ 9,178     $ 9,803     $ 17,901     $ 18,118  

Same store revenue percentage changes:

         

New retail

      (1.6 %)       0.2 %  

Fleet

      3.2 %       1.9 %  

Used

      3.4 %       4.2 %  

Parts, service and collision repair

      1.8 %       3.5 %  

Finance, insurance and other

      17.4 %       11.9 %  

Total

      (0.6 %)       0.7 %  

Balance Sheet Data:

         
     6/30/2007     12/31/2006              

ASSETS

         

Current Assets:

         

Cash and cash equivalents

    $ 12,157     $ 12,696      

Receivables, net

      318,827       385,849      

Inventories

      1,109,214       991,984      

Assets held for sale

      176,536       160,571      

Construction in progress expected to be sold in sale-leaseback transactions

      4,516       26,198      

Other current assets

      31,474       35,834      
                    

Total current assets

      1,652,724       1,613,132      

Property and Equipment, Net

      270,036       220,551      

Goodwill, Net

      1,247,721       1,155,428      

Other Intangibles, Net

      102,299       94,136      

Other Assets

      36,312       41,517      
                    

TOTAL ASSETS

    $ 3,309,092     $ 3,124,764      
                    

LIABILITIES AND STOCKHOLDERS' EQUITY

         

Current Liabilities:

         

Floor plan notes payable - trade

    $ 257,765     $ 377,943      

Floor plan notes payable - non-trade

      875,832       686,515      

Trade accounts payable

      68,048       68,016      

Accrued interest

      18,281       19,336      

Other accrued liabilities

      181,098       180,884      

Liabilities associated with assets held for sale - trade

      48,338       54,229      

Liabilities associated with assets held for sale - non-trade

      36,325       42,063      

Current maturities of long-term debt

      3,224       2,707      
                    

Total current liabilities

      1,488,911       1,431,693      

LONG-TERM DEBT

      672,196       598,627      

OTHER LONG-TERM LIABILITIES

      200,562       190,604      

STOCKHOLDERS' EQUITY

      947,423       903,840      
                    

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

    $ 3,309,092     $ 3,124,764      
                    

Balance Sheet Ratios:

         

Current Ratio

      1.11       1.13      

Debt to Total Capital, Net of Cash

      41.2 %     39.4 %