Lithia Motors (NYSE:LAD) Posts Earnings Results, Beats Estimates By $0.28 EPS

Key Points

• EPS beat but revenue and margin pressures: Lithia reported adjusted EPS of $7.34 (beat by $0.28) on revenue of $9.27B which missed expectations, while new‑vehicle revenue fell 7.1% and adjusted SG&A-to-gross rose, signaling near‑term profitability headwinds.
• Finance and after‑sales strength: Driveway Finance posted $21M in financing income (up 71% YoY) with record originations (~$840M) and a $5B portfolio, while after‑sales and same‑store used revenue grew, helping cushion weaker new‑vehicle trends.
• Shareholder returns prioritized: Management repurchased roughly 4% of shares (~$259–$300M this quarter) and raised the quarterly dividend to $0.57, underscoring a bias toward buybacks and dividends.

Lithia Motors (NYSE:LAD - Get Free Report) issued its quarterly earnings results on Wednesday. The company reported $7.34 EPS for the quarter, beating analysts' consensus estimates of $7.06 by $0.28, Zacks reports. The firm had revenue of $9.27 billion for the quarter, compared to analysts' expectations of $9.81 billion. Lithia Motors had a return on equity of 12.76% and a net margin of 2.18%.The business's revenue for the quarter was up 1.0% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $7.66 EPS.

Here are the key takeaways from Lithia Motors' conference call:

• Record quarter: Company reported record revenues of $9.3 billion and adjusted diluted EPS of $7.34, citing diversified operations and resilient execution despite weather and macro headwinds.
• Driveway Finance Corp. strength: DFC posted financing operations income of $21 million (up 71% YoY), record originations ($840M), a $5 billion portfolio and 18% penetration, positioning it toward the long‑term 20%+ target.
• After‑sales and used performance: After‑sales revenue and gross profit grew (revenues +3.8%, gross profit +5.7%, margins 58.7%), and same‑store used revenue rose 4.6% with sequential improvement in used GPU.
• Capital allocation: Management repurchased about 4% of outstanding shares (~$259–$300M this quarter) and remains biased toward buybacks while also pursuing disciplined acquisitions at attractive prices.
• Margin and new‑vehicle pressures: New vehicle revenue fell 7.1% (unit declines and GPU compression), and adjusted SG&A to gross rose to 71.5% YoY (though flat sequentially), highlighting near‑term profitability headwinds to address.

Lithia Motors Trading Up 4.9%

Shares of LAD opened at $290.94 on Thursday. The business's 50-day moving average price is $267.30 and its 200-day moving average price is $302.76. Lithia Motors has a twelve month low of $239.78 and a twelve month high of $360.55. The stock has a market cap of $6.80 billion, a PE ratio of 9.05, a P/E/G ratio of 0.66 and a beta of 1.22. The company has a quick ratio of 0.26, a current ratio of 1.17 and a debt-to-equity ratio of 1.46.

Lithia Motors Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, May 22nd. Shareholders of record on Friday, May 8th will be issued a dividend of $0.57 per share. This represents a $2.28 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend is Friday, May 8th. This is a boost from Lithia Motors's previous quarterly dividend of $0.55. Lithia Motors's payout ratio is presently 6.85%.

Hedge Funds Weigh In On Lithia Motors

Large investors have recently modified their holdings of the company. Dimensional Fund Advisors LP increased its holdings in Lithia Motors by 0.5% during the 4th quarter. Dimensional Fund Advisors LP now owns 1,346,783 shares of the company's stock worth $447,583,000 after acquiring an additional 6,113 shares during the period. Canada Pension Plan Investment Board boosted its holdings in Lithia Motors by 5.9% in the 2nd quarter. Canada Pension Plan Investment Board now owns 612,377 shares of the company's stock valued at $206,873,000 after purchasing an additional 33,966 shares during the period. Hotchkis & Wiley Capital Management LLC grew its position in shares of Lithia Motors by 3.6% during the 3rd quarter. Hotchkis & Wiley Capital Management LLC now owns 426,120 shares of the company's stock valued at $134,654,000 after purchasing an additional 14,781 shares in the last quarter. Ameriprise Financial Inc. grew its position in shares of Lithia Motors by 18.0% during the 3rd quarter. Ameriprise Financial Inc. now owns 221,928 shares of the company's stock valued at $70,131,000 after purchasing an additional 33,931 shares in the last quarter. Finally, Bank of America Corp DE grew its position in shares of Lithia Motors by 57.5% during the 2nd quarter. Bank of America Corp DE now owns 197,417 shares of the company's stock valued at $66,691,000 after purchasing an additional 72,061 shares in the last quarter.

Wall Street Analyst Weigh In

A number of equities research analysts recently issued reports on LAD shares. Weiss Ratings restated a "hold (c+)" rating on shares of Lithia Motors in a research note on Thursday, January 22nd. Wall Street Zen downgraded shares of Lithia Motors from a "hold" rating to a "sell" rating in a research note on Saturday, February 28th. Wells Fargo & Company lowered their price target on shares of Lithia Motors from $355.00 to $293.00 and set an "equal weight" rating on the stock in a research report on Monday, April 13th. JPMorgan Chase & Co. dropped their price target on shares of Lithia Motors from $335.00 to $320.00 and set a "neutral" rating on the stock in a research note on Friday, April 17th. Finally, Barclays cut their price objective on shares of Lithia Motors from $380.00 to $370.00 and set an "overweight" rating for the company in a report on Tuesday, April 7th. Six research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company. According to data from MarketBeat, Lithia Motors has an average rating of "Moderate Buy" and a consensus price target of $361.00.

More Lithia Motors News

Here are the key news stories impacting Lithia Motors this week:

• Positive Sentiment: Record top‑line and operational improvements: company reported record Q1 revenues (~$9.3B), used‑vehicle same‑store growth and rising used retail GPUs, and higher aftersales revenue and gross profit — operational strength supports cash flow and margins. Read More.
• Positive Sentiment: Aftersales margin expansion helped results: aftersales gross margin improved ~100 bps same‑store, cushioning weaker new‑vehicle trends and contributing to beat narratives in some reports. Read More.
• Positive Sentiment: Driveway finance & buybacks: Driveway Finance originations hit a record ~$840M with high average FICO (~750), and the company repurchased $259M (≈4% of shares) in the quarter — both support EPS per share and investor confidence. Read More.
• Positive Sentiment: Dividend increase: board declared a quarterly dividend of $0.57 (3.6% increase from prior $0.55) with a yield ~0.8%, signaling confidence in cash generation. (Ex‑dividend May 8; pay May 22.)
• Neutral Sentiment: Analyst model moves: some shops (Zacks) nudged forward‑looking EPS estimates slightly, but ratings largely remain conservative — analysts are parsing mix shifts and margin outlooks. Read More.
• Neutral Sentiment: Company provided slide deck and earnings presentation — useful for digging into unit metrics, F&I trends and regional performance for modeling. Read More.
• Negative Sentiment: Headline EPS/revenue shortfall versus some Street estimates: reported adjusted EPS ~$7.34 (adjusted) and revenue ~$9.27B — below some analysts' consensus (~$9.14 EPS estimate and ~$9.81B revenue), which raises near‑term growth/margin questions. Read More.
• Negative Sentiment: Analysts flagged margin pressures and trimmed expectations ahead of the print, and some commentary emphasizes that shifting revenue mix and rising costs could keep margins under review. Read More.

About Lithia Motors

Lithia Motors, Inc is an American automotive retailer headquartered in Medford, Oregon. Founded in 1946 as a small auto body and glass shop, the company has grown through organic expansion and strategic acquisitions to become one of the largest automotive retail networks in North America. Lithia operates dealerships across the United States and Canada, offering a broad portfolio of new and pre-owned vehicles from more than 40 different manufacturers.

The company's core business activities include vehicle sales, financing, insurance, parts and service.