Aston Martin Lagonda Global LON: AML reported first-quarter 2026 results in line with its guidance and maintained its full-year outlook, as the luxury automaker continued efforts to realign dealer inventories and benefit from early deliveries of its Valhalla supercar.
Quarterly performance aligned with guidance
In prepared remarks, Doug Lafferty said the company had expected Q1 to be “the smallest quarter of the year” as it focused on “realigning stock levels through a disciplined approach to managing production and deliveries.” Wholesale volumes were similar to the prior-year period, while “core retail volumes were significantly ahead of wholesales by over 50%,” he said.
Lafferty attributed a higher average selling price (ASP) and stronger margins to Valhalla deliveries and ongoing operational efforts. Total ASP rose 17% to £252,000, supported by “102 Valhalla deliveries,” which helped drive total revenue growth of 16%.
Gross margin improved to 35% from 28% in the prior-year quarter. Lafferty said this represented progress toward the company’s full-year guidance for gross margin “improving into the high 30%.” Adjusted EBITDA increased by £28 million year-over-year to £23 million, while adjusted EBIT improved 12% to negative £57 million. Depreciation and amortization rose 33% to £80 million, which Lafferty said reflected Valhalla deliveries.
Inventory realignment expected to largely complete in Q2
During the Q&A, Lafferty told Barclays analyst Henning Cosman the company expects wholesales and retails to converge through the second quarter, with the “stock realignment” largely completed by the end of Q2. “There’ll be a little bit of continuing retails running ahead of wholesales in Q2, but then after that it should become much smoother,” he said, adding that the company expects to enter the second half of the year in a “much more aligned position.”
On model mix, Lafferty said he expects “the SUV mix to get a little bit better as we move through the second half of the year,” likely beginning to show in Q2 and stabilizing in the back half. He reiterated guidance to deliver 500 Valhallas for the full year, noting that with just over 100 delivered in Q1, the Valhalla contribution to volume “will continue to improve as we go through the quarters.”
ASP outlook tied to reduced dealer support and options mix
Cosman also asked about ASP dynamics and dealer support payments. Lafferty reiterated the company still expects “around 5% core ASP growth for the full year,” and said incremental dealer support seen in Q4 and again in Q1 was “largely focused on the aged stock and the outgoing or the older models.”
He added that recently launched and upcoming derivatives “don’t attract any incremental support,” and that the expected pricing improvement through the year would be “largely supported by coming out of that period of dealer support.” Lafferty also pointed to a continued focus on improving options uptake across the core portfolio as another contributor to higher ASP.
Goldman Sachs analyst George Galliers asked whether the second half would likely feature higher ASPs, higher margins and improved free cash flow versus the first half. Lafferty confirmed the company expects ASPs to be stronger in H2 for the reasons discussed and said this should support gross margin progression toward the high-30% target, consistent with the company’s profitability and cash flow guidance for 2026.
Cash flow, liquidity, and new committed facility
Lafferty said free cash outflow in Q1 “marginally improved” compared to the prior year, with EBITDA improvements and lower capital expenditure “largely being offset by the working capital outflow,” which he said is expected to “ebb and flow through the year.” He reiterated prior guidance that free cash outflow in 2026 should “materially improve” versus the prior year, supported by an enhanced product mix and a more balanced production cadence from Q2 onward, as well as a reduction in aged stock “predominantly executed in the first quarter.”
In Q&A, Lafferty said he still expects Q1 to represent “the vast majority” of the year’s free cash outflow by year-end, with “material improvement between Q2 and Q4.” On working capital, he told Galliers that if there is an outflow for the full year, “the majority of it’s done in Q1,” and he anticipated “not [too] material movements” through the rest of the year, while emphasizing efforts to keep working capital tight.
The company ended Q1 with total cash and available facilities of £178 million, which Lafferty said benefited from £50 million in gross proceeds tied to the completed sale of Aston Martin Formula One naming rights. The company also announced a new £50 million committed facility with Lawrence and other members of the Yew Tree Consortium, taking pro forma Q1 liquidity to “around £230 million,” according to Lafferty.
Asked by Goldman Sachs about the facility, Lafferty said it is interest-bearing “only if drawn” and includes a small commitment fee, describing it as a “fairly simple structure” intended to provide headroom against unexpected events. Bank of America analyst Horst Schneider pressed for additional detail, and Lafferty said the facility is “secured against specific assets in the company,” but did not provide further terms. On additional debt capacity, he said the company continues to review its options but declined to discuss specifics, noting there is “a little bit of remaining debt capacity.”
Valhalla demand signals, U.S. tariff quotas, and portfolio strategy
Lafferty highlighted strong media coverage of Valhalla, saying “overwhelmingly positive” driving reviews were published earlier in the month, with many giving the car five stars and some calling it “the best Aston Martin ever.” He said the company is running global customer driving events through the end of July and expects the activity to boost the order book in coming months.
Bernstein analyst Harry Martin asked about order book extension and deposit dynamics. Lafferty said customer activation events had recently begun, with Valhallas now in every region, allowing customers to see and in many cases drive the car—tools the company “built the initial order bank” without. He said the company expects these activities to act as a catalyst for the order book. On deposits, he noted that while there may have been a net outflow from a deposit flow perspective, on the balance sheet the company has taken “net new deposits by a fairly material number,” particularly during March and into April.
On the U.S. tariff quota mechanism, Lafferty said Q1 was the first period in which the quarterly quota system was in operation. Despite limited data due to federal shutdowns beginning mid-February, he said all Q1 shipments to the U.S. were secured at the 10% tariff rate. He told Goldman Sachs that the key risk in Q2 is the quota filling before the company’s final shipments, in which case Aston Martin would hold shipments rather than accept a higher tariff and “swallow the margin impact.”
Martin also asked about the U.K. market after a decline in wholesales. Lafferty said he would not “read too much into” the U.K. performance given the small quarter, adding there was “nothing material happening” and “no particular market weakness.” He said the U.K. stock position is “very healthy” and remains supportive of full-year volumes.
Finally, Schneider asked whether higher oil prices and competitors’ electrification efforts could disadvantage Aston Martin due to a lack of PHEVs in the core portfolio. Lafferty said he did not believe the company has “a gap” that would suffer due to not having a PHEV in the core lineup, adding the company is “very comfortable with the cars that we’ve got in the market” and the derivatives it is bringing forward. He also said there is “no intention to electrify the DBX” in the near term and that there were “no changes” to the company’s cycle plan.
About Aston Martin Lagonda Global LON: AML
Aston Martin's vision is to be the world's most desirable, ultra-luxury British brand, creating the most exquisitely addictive performance cars.
Founded in 1913 by Lionel Martin and Robert Bamford, Aston Martin is acknowledged as an iconic global brand synonymous with style, luxury, performance, and exclusivity. Aston Martin fuses the latest technology, time honoured craftsmanship and beautiful styling to produce a range of critically acclaimed luxury models including the Vantage, DB12, Vanquish, DBX and its first mid-engined plug-in hybrid, Valhalla.
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