Lithia Motors Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 29 July 2026: press release. Guidance figures: 2 raised. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose 2% to $9.8 billion: Second quarter revenue was $9.8 billion, up 2% from $9.6 billion a year earlier. Six-month revenue rose 2% to $19.1 billion from $18.8 billion. Source
• Diluted EPS rose 17%: Diluted EPS attributable to LAD was $11.54, up 17% from $9.87. Adjusted diluted EPS was $10.03, up 9%, after excluding an unrealized gain on the Pinewood Technologies investment and other non-core items. Source
• Used retail GPU rose sequentially: Used retail gross profit per unit increased $339, or 20%, from the first quarter, according to the release. Used retail GPU was $2,014, up 5.4% from a year earlier. Source
• Aftersales gross profit up 3.1%: On a same-store basis, aftersales gross profit rose 3.1% and gross margin was 59.2%, up 120 basis points. Total aftersales revenue rose 3.9% to $1,067.4 million. Source
• Financing Operations income up 81.6%: Financing Operations income was $36.5 million, up from $20.1 million. Originations were $884 million, with a 17.5% penetration rate. Source
• Adjusted SG&A improved to 68.6%: Adjusted SG&A was 68.6% of gross profit, a 290-basis point improvement from 71.5% in the first quarter. A year earlier the figure was 67.7%. Source
• New vehicle days' supply rose: New vehicle days' supply was 59 at June 30, 2026, against 54 at December 31, 2025 and 63 a year earlier. Used vehicle days' supply was 60, against 48 at both comparison dates. Source
• Repurchases of $242 million: The company repurchased about 854,000 shares in the second quarter at a weighted average price of $284, totaling $242 million. That equals 3.7% of shares outstanding; first-half repurchases equaled 7.6%. Source

“Our team delivered differentiated growth across the platform, with record quarterly revenues, stable new vehicle margins, improved used vehicle profitability, and meaningful sequential SG&A improvement.”

Bryan DeBoer, President and CEO

Guidance

What changed from last quarter

• Guidance raised: The quarterly dividend rose from $0.57 per share to $0.70 per share, a 23% increase per the release. Source
• Guidance raised: The share repurchase authorization was expanded by $500 million, according to the CEO. Source
• New: The company acquired 5 stores and divested 3 stores in the second quarter, with annualized revenues of $340 million and $120 million respectively. Source

Revenue and earnings results

• Revenue rose 2% to $9.8 billion: Second quarter revenue was $9.8 billion, up 2% from $9.6 billion a year earlier. Six-month revenue rose 2% to $19.1 billion from $18.8 billion. Source
• Diluted EPS rose 17%: Diluted EPS attributable to LAD was $11.54, up 17% from $9.87. Adjusted diluted EPS was $10.03, up 9%, after excluding an unrealized gain on the Pinewood Technologies investment and other non-core items. Source
• Adjusted net income fell 6%: Net income was $261.6 million, up 1.3%. Adjusted net income was $227.6 million, down from $240.9 million a year earlier, after the same adjustments. Source
• Six-month diluted EPS fell 12%: Six-month diluted EPS attributable to LAD was $15.68, down 12% from $17.80. Six-month adjusted diluted EPS rose 1% to $17.32 from $17.12. Source
• Operating income rose 5.4%: Income from operations was $448.3 million in the quarter, up 5.4%. For six months, income from operations fell 5.7% to $784.1 million. Source

Segments and regions

• US, UK and Canada revenue mix: The United States was 77.4% of quarterly revenue and 82.2% of gross profit. The United Kingdom was 18.7% of revenue and 14.8% of gross profit; Canada was 3.9% and 3.0%. Source
• Same-store revenue fell 1.6%: Same-store total revenues were $9,228.3 million in the quarter, down 1.6% from $9,382.9 million. Same-store gross profit fell 2.7% to $1,422.4 million. Source

“Financing Operations delivered 80% income growth, with expanding margins and increasing penetration”

Bryan DeBoer, President and CEO

Vehicle sales and unit economics

• New vehicle units up 2.7%: New vehicle unit sales were 104,089, up 2.7%. On a same-store basis, new units were 98,286, down 2.2%, with same-store new average selling price up 0.1%. Source
• New vehicle gross profit per unit fell: Average gross profit per new vehicle unit was $2,728, down 11.8% from $3,093 a year earlier. New vehicle average selling price was $47,156, down 0.7%. Source
• Used retail GPU rose sequentially: Used retail gross profit per unit increased $339, or 20%, from the first quarter, according to the release. Used retail GPU was $2,014, up 5.4% from a year earlier. Source
• Used retail units and prices: Used retail units were 106,114, down 2.7%. Used retail average selling price rose 4.3% to $29,593, and six-month used retail average selling price rose 4.4%. Source

Aftersales and financing operations

• Aftersales gross profit up 3.1%: On a same-store basis, aftersales gross profit rose 3.1% and gross margin was 59.2%, up 120 basis points. Total aftersales revenue rose 3.9% to $1,067.4 million. Source
• Financing Operations income up 81.6%: Financing Operations income was $36.5 million, up from $20.1 million. Originations were $884 million, with a 17.5% penetration rate. Source
• Managed finance receivables grew: Total average managed finance receivables were $5,271.4 million in the quarter, up from $4,287.6 million a year earlier. Source

“We continued to return value to shareholders this quarter, expanding our repurchase authorization by $500 million and purchasing nearly 4% of shares.”

Bryan DeBoer, President and CEO

Costs, margins and pricing

• Adjusted SG&A improved to 68.6%: Adjusted SG&A was 68.6% of gross profit, a 290-basis point improvement from 71.5% in the first quarter. A year earlier the figure was 67.7%. Source
• New vehicle gross margin down 80bps: New vehicle gross margin was 5.9%, down from 6.7% a year earlier and unchanged from the first quarter. Used vehicle gross margin was 6.1%, up 20 basis points. Source
• Floor plan interest up 26.7%: Floor plan interest expense was $69.7 million, up 26.7% from $55.0 million. Six-month floor plan interest expense rose 12.1% to $125.6 million. Source

Inventory and sales demand

• Same-store used units fell 6.1%: Same-store used retail units were 101,462, down 6.1% from 108,040. Six-month same-store used retail units were down 2.5%. Source
• New vehicle days' supply rose: New vehicle days' supply was 59 at June 30, 2026, against 54 at December 31, 2025 and 63 a year earlier. Used vehicle days' supply was 60, against 48 at both comparison dates. Source
• Inventories up on balance sheet: Net inventories were $6,516.8 million at June 30, 2026, up from $6,119.6 million at December 31, 2025. Floor plan notes payable rose to $6,387.4 million. Source

Capital, cash and shareholder returns

• Repurchases of $242 million: The company repurchased about 854,000 shares in the second quarter at a weighted average price of $284, totaling $242 million. That equals 3.7% of shares outstanding; first-half repurchases equaled 7.6%. Source
• Authorization remaining about $620 million: About $620 million remained under the current repurchase authorization at June 30, 2026, following the $500 million expansion the CEO described. Source
• Dividend raised 23% to $0.70: The Board approved a $0.70 per share dividend for second quarter 2026, up from $0.57 in the first quarter release. Six-month dividends paid were $25.7 million. Source
• Liquidity about $1.3 billion: The company ended the quarter with about $1.3 billion in cash, marketable securities, and revolving line availability, against about $1.4 billion at the end of the first quarter. Source
• Net debt rose to $5.1 billion: Net debt was $5,143.6 million, up from $5,001.8 million at March 31, 2026. Net debt to adjusted EBITDA was 3.17x, against 3.07x at March 31, 2026. Source
• Operating cash flow negative in six months: Six-month net cash used in operating activities was $174.1 million, against $331.4 million provided a year earlier. Six-month capital expenditures were $153.4 million. Source

Store network and Driveway ecosystem

• Store acquisitions and divestitures: The company acquired 5 stores with expected annualized revenues of $340 million and divested 3 stores with $120 million of annualized revenues in the second quarter. Source
• Ecosystem delivering on design: The CEO said the ecosystem is delivering on its design and that the company carries momentum into the second half of the year. Source

Coming up, as management said on 29 July 2026

• Dividend payment dates: The $0.70 per share dividend is expected to be paid on August 21, 2026, to shareholders of record on August 7, 2026. Source

Figures management reported

Earlier plans management reported on

• Not stated: The CEO said the ecosystem is delivering on its design. The release does not use a status word for this. Source

Other quarters

• Q1 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.