Ford Motor Company (NYSE:F) ended the holiday-shortened week at $13.36, a decline of 5.5% from June 26, while the S&P 500 gained 1.8% over the same period. The automaker's stock slid each trading day as investors weighed a second-quarter sales report that showed a 10.3% drop in U.S. deliveries to 549,200 vehicles.
U.S. markets were closed on July 3 for Independence Day and will reopen on Monday. Ford is scheduled to report its second-quarter financial results on July 28 after the market close.
F-Series Inventory Raises Concerns
A key metric drawing investor attention is Ford's gross stock of F-Series trucks, which stood at 190,400 units at the end of June. That figure is nearly equal to the 197,900 F-Series trucks sold during the entire second quarter, representing a 96% stock-to-sales ratio. Overall, Ford's total vehicle gross stock of 471,000 units was about 86% of quarterly sales.
The elevated inventory levels raise questions about whether Ford can move its trucks and SUVs without resorting to heavy discounts in the second half of the year. Pricing strategy has become a central topic for analysts and investors.
Sales Breakdown and Market Context
Ford attributed the 10% sales decline to model phase-outs and a sharp 69% reduction in daily rental sales. Excluding discontinued models and lower rental sales, the company said sales would have been up about 0.5%. Andrew Frick, who leads Ford Blue and Model e, stated that Ford was "gaining retail market share last month" and noted the F-Series extended its lead over competitors.
The broader U.S. auto market was relatively stable, with listed automakers' light-vehicle sales growing 0.8% in the second quarter, according to Reuters data. General Motors (NYSE:GM) posted a 4.2% decline, while Toyota Motor Corp (NYSE:TM) saw a 1.1% increase.
Propulsion Mix and Profitability
Ford's sales decline was broad-based across propulsion types. Electric vehicle sales plunged 40.7% to 9,746 units, hybrid sales fell 20.0% to 53,163, and internal combustion engine vehicles dropped 8.1% to 486,291. The sharp drop in EV sales indicates that challenges in the electric segment are not the only headwind.
Investors are closely watching whether Ford's strategy of reducing low-margin rental deals and phasing out older models will improve profitability. A thinner unit base could be positive if it means higher-margin sales, but heavy discounting to clear inventory before earnings would be a negative signal.
Competitive Landscape
General Motors reported a similar tone on trucks and SUVs. Duncan Aldred, GM's North America president, said demand was "resilient, especially for our trucks and SUVs" after GM posted its own Q2 sales drop. This keeps pressure on Ford's F-Series, as GM's pickup and SUV results are the main benchmark.
Tesla (NASDAQ:TSLA) delivered 480,126 vehicles in Q2 and reduced inventory by producing fewer cars than it delivered. However, Tesla shares fell about 7% on July 2 after a pre-earnings rally. Seth Goldstein, senior equity analyst at Morningstar, noted that Europe was "the key driver for Tesla right now" and that U.S. sales appeared softer.
Outlook
Ford reported F-Series sales of 357,801 in the first half, over 80,000 units ahead of the Chevrolet Silverado, but down 13.3% from the same period last year. With no new monthly sales data expected this week, the focus will be on whether last week's stock decline was profit-taking or a signal that investors need proof of margin improvement before betting on a rebound.
Ford and Ford Motor Credit will release Q2 results at 4:05 p.m. ET on July 28, followed by a conference call at 5 p.m. with CEO Jim Farley, CFO Sherry House, and other executives.
