Lithia Motors Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 29 April 2026: press release. Guidance figures: 1 raised, 1 new. The quarter’s numbers.

Read the filing

Key takeaways

• GAAP earnings per share fell 46%: Diluted EPS attributable to LAD was $4.28, down 46% from $7.94. Net income fell 51.7% to $102.0 million from $211.2 million. Source
• Adjusted EPS fell 7% to $7.34: Adjusted diluted EPS was $7.34 against $7.93, after adjusting for an unrealized investment loss and other non-core items. Source
• Used gross profit per unit rose sequentially: Used retail gross profit per unit rose $133, or 9%, from the prior quarter. The figure was $1,688, compared with $1,769 a year earlier. Source
• Driveway Finance originations hit a record: Driveway Finance Corporation originated a record $840 million, with an 18.0% penetration rate and average FICO of 750. Penetration was 15.0% in the prior quarter. Source
• New vehicle gross profit per unit fell: New vehicle gross profit per unit fell 7.2% to $2,739 from $2,950. New vehicle gross margin was 5.9%, down 50 basis points. Source
• SG&A grew faster than gross profit: SG&A expense rose 8.9% to $1,037.4 million. SG&A as a percentage of gross profit was 73.0% as reported and 71.5% adjusted, against 67.5% and 68.2% a year earlier. Source
• New vehicle units fell 4.7%: New vehicle unit sales fell 4.7% to 94,787 units. Used vehicle retail units rose 2.6% to 110,151. Source
• Operating cash flow was negative: Net cash used in operating activities was $108.4 million, compared with $322.1 million provided a year earlier. Adjusted operating cash flow, which adds back non-trade floor plan borrowings, was $1,519.8 million. Source
• Net debt and leverage increased: Net debt rose 25.5% to $5,001.8 million. Net debt to TTM adjusted EBITDA was 3.07x, up from 2.50x a year earlier. Source

“Our team drove strong results across our platform and sequential growth in earnings, delivering higher revenues and improved GPU in used vehicles, meaningful growth in aftersales, and growing penetration in Driveway Finance,”

Bryan DeBoer, President and CEO

Guidance

What changed from last quarter

• New: In the first quarter, inventory-secured revolvers were converted to floorplan facilities, which raised net floorplan borrowings and adjusted operating cash flow by $1,138.3 million. Source

Results and earnings

• Revenue rose 1% to a first quarter record: Total revenues reached $9.3 billion, up 1% from $9.2 billion a year earlier. Gross profit rose 0.8% to $1,421.7 million, with finance operations income up 70.4%. Source
• GAAP earnings per share fell 46%: Diluted EPS attributable to LAD was $4.28, down 46% from $7.94. Net income fell 51.7% to $102.0 million from $211.2 million. Source
• Adjusted EPS fell 7% to $7.34: Adjusted diluted EPS was $7.34 against $7.93, after adjusting for an unrealized investment loss and other non-core items. Source
• Adjusted net income fell 18%: Adjusted net income was $173.3 million, compared with $210.9 million a year earlier. Income from operations fell 17.4% to $335.8 million. Source
• Pretax income fell by half: Income before income taxes fell 50.1% to $142.0 million. The income tax rate rose to 28.2% from 25.8%. Source

Segments and regions

• United States carried most of the business: The United States was 75.6% of total revenue and 80.9% of gross profit. The United Kingdom was 21.4% of revenue and 16.7% of gross profit; Canada was 3.0% and 2.4%. Source
• Same-store revenue fell 1.7%: Same-store total revenues were $8,796.1 million, down 1.7% from $8,946.2 million. Same-store gross profit fell 2.3% to $1,353.4 million. Source
• Same-store new vehicle revenue fell 7.1%: Same-store new vehicle revenue fell 7.1% to $4,156.8 million, while same-store used vehicle revenue rose to $3,302.0 million. Source

“Capital discipline remains a key focus, and we repurchased nearly 4% of our shares at prices well below intrinsic value.”

Bryan DeBoer, President and CEO

Products and customers

• Used vehicle revenue grew: Used vehicle revenue rose 7.3% to $3,489.4 million, and used retail units rose 2.6% to 110,151. Same-store used vehicle revenue rose 4.6%. Source
• Used gross profit per unit rose sequentially: Used retail gross profit per unit rose $133, or 9%, from the prior quarter. The figure was $1,688, compared with $1,769 a year earlier. Source
• Aftersales revenue and margin improved: Same-store aftersales revenue rose 3.8% to $992.1 million, and same-store aftersales gross profit rose 5.7%. Aftersales margin reached 58.7%, up 100 basis points. Source
• Driveway Finance originations hit a record: Driveway Finance Corporation originated a record $840 million, with an 18.0% penetration rate and average FICO of 750. Penetration was 15.0% in the prior quarter. Source
• Finance operations income grew on larger receivables: Finance operations income rose 70.4% to $21.3 million. Total average managed finance receivables were $5,004.0 million, up from $4,062.1 million. Source

Margins, costs and pricing

• New vehicle gross profit per unit fell: New vehicle gross profit per unit fell 7.2% to $2,739 from $2,950. New vehicle gross margin was 5.9%, down 50 basis points. Source
• SG&A grew faster than gross profit: SG&A expense rose 8.9% to $1,037.4 million. SG&A as a percentage of gross profit was 73.0% as reported and 71.5% adjusted, against 67.5% and 68.2% a year earlier. Source
• Investment loss excluded from adjusted results: The company excluded an unrealized loss on its Pinewood Technologies investment, which was $73.3 million, from adjusted net income and adjusted EPS. Source
• Contract buyouts added back to EBITDA: Contract buyouts of $20.3 million were added back to reach adjusted EBITDA. Adjusted EBITDA was $374.6 million, down 9.0% from $411.8 million. Source
• Overall gross margin nearly flat: Gross profit margin was 15.3%, down 10 basis points. Same-store gross profit margin was 15.4%, also down 10 basis points. Source
• Adjusted SG&A ratio to revenue rose: Adjusted SG&A was 11.0% of revenue, up from 10.5% a year earlier. Adjusted operating profit was 25.1% of gross profit, against 28.2%. Source

“Our balance sheet and diversified platform give us a durable foundation to successfully navigate any market cycle.”

Bryan DeBoer, President and CEO

Demand and inventory

• New vehicle units fell 4.7%: New vehicle unit sales fell 4.7% to 94,787 units. Used vehicle retail units rose 2.6% to 110,151. Source
• Used prices rose, new prices slipped: Used vehicle retail average selling price rose 4.7% to $28,464. New vehicle average selling price, excluding agency, fell 0.7% to $46,878. Source
• New vehicle days' supply came down: New vehicle days' supply was 49, down from 54 at December 31, 2025 but up from 43 a year earlier. Used vehicle days' supply was 47, against 48 and 44. Source
• Net inventories edged up: Inventories, net were $6,193.2 million at March 31, 2026, up from $6,119.6 million at December 31, 2025. Source

Cash and balance sheet

• Operating cash flow was negative: Net cash used in operating activities was $108.4 million, compared with $322.1 million provided a year earlier. Adjusted operating cash flow, which adds back non-trade floor plan borrowings, was $1,519.8 million. Source
• Adjusted cash flow reconciliation: Non-trade floor plan borrowings of $1,378.3 million were added to reported cash flow, reaching adjusted operating cash flow of $1,519.8 million against $447.3 million. Source
• Capital spending and acquisition cash rose: Capital expenditures were $97.1 million, against $68.7 million. Cash paid for acquisitions, net of cash acquired, was $145.3 million, against $84.5 million. Source
• Net debt and leverage increased: Net debt rose 25.5% to $5,001.8 million. Net debt to TTM adjusted EBITDA was 3.07x, up from 2.50x a year earlier. Source
• Liquidity about $1.4 billion: The company ended the quarter with about $1.4 billion in cash, marketable securities and revolver availability, compared with about $1.5 billion at year-end. Source

Capital returns to shareholders

• Buybacks equal 4% of shares: The company repurchased $259 million of shares, or 4.0% of shares outstanding, in the quarter. The cash flow statement shows $297.0 million of common stock repurchases. Source
• Shares bought at $274.62 average: About 942,000 shares were repurchased at a weighted average price of $274.62 during the first quarter. Source
• Dividend approved at $0.57 per share: The Board approved a $0.57 per share dividend tied to first quarter results, up from $0.55 for the fourth quarter of 2025. Source
• Diluted share count down 11.4%: Diluted shares outstanding were 23.4 million, down 11.4% from 26.4 million a year earlier. Source

Corporate development and strategy

• Prior quarter acquisitions were larger: In the fourth quarter of 2025 the company acquired eleven stores in North America and the UK, expected to generate $1.6 billion in annualized revenues.
• Full-year 2025 deals netted acquisitions: For full year 2025 the company acquired $2.4 billion of expected annualized revenues and divested $1.3 billion.
• No store sale proceeds this quarter: Proceeds from sales of stores were nil in the first quarter of 2026, compared with $43.2 million in the first quarter of 2025. Source

Coming up, as management said on 29 April 2026

• Dividend payment date set: The $0.57 dividend is expected to be paid on May 22, 2026, to shareholders of record on May 8, 2026. Source

Figures management reported

Risks management discussed

• Financial: Leverage measured as net debt to TTM adjusted EBITDA rose, while floor plan and financing-related debt grew over the year. Source
• Demand: New vehicle unit volume and new vehicle gross profit per unit both declined from the prior year in the quarter. Source
• Operational: SG&A grew faster than gross profit, which raised SG&A as a share of gross profit. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.