The company said after the bell Thursday that net income will be between 34 and 35 cents a share, down from its original estimate of 38 to 40 cents a share.
The consensus analyst estimate had expected the company to earn 40 cents a share in the quarter.
In light of the second-quarter shortfall, the auto retailer said it now expects full-year earnings of $1.35 to $1.40 a share. Analysts had expected $1.44 a share.
AutoNation said it saw significant declines in sales of
vehicles. The low volume combined with high inventories also caused a gross margin decline in AutoNation's new vehicle business.
GM and Ford both saw U.S. sales fall in June from a month ago. While the decline was due in part to an unusually strong May, investors have begun to question whether overall consumer demand is beginning to slacken.
Shares of AutoNation closed at $16.26, down 32 cents, or 1.93%.
AutoNation will release second-quarter results on July 20.