Lithia Motors Inc (LAD, Financial) released its 8-K filing on April 23, 2025, reporting a record first-quarter revenue of $9.2 billion, marking a 7% increase from the previous year. The company's diluted earnings per share (EPS) rose by 35% to $7.94, surpassing the analyst estimate of $7.66. Adjusted diluted EPS also met the analyst estimate at $7.66, reflecting a 25% increase from the prior year.
Company Overview
Lithia Motors Inc (LAD, Financial) is a leading retailer of new and used vehicles and related services, offering over 50 brands across nearly 500 stores globally, including the US, Canada, and the UK. The company has grown significantly through acquisitions, with annual revenue reaching $36.2 billion in 2024. Lithia Motors aims to expand further, targeting over $50 billion in revenue in the coming years. Founded in 1946 and based in Medford, Oregon, it is the largest auto dealer in the US.
Performance and Challenges
The first quarter of 2025 saw Lithia Motors Inc (LAD, Financial) achieving a net income of $211 million, a 28% increase from the same period in 2024. The company also reported a 7% increase in total revenues, driven by a 3.6% rise in new retail units on a same-store basis and a significant improvement in used retail unit growth. However, the company faced challenges with unrealized losses on its investment in Pinewood Technologies Group PLC, which decreased diluted EPS by $0.27.
Financial Achievements
Lithia Motors Inc (LAD, Financial) demonstrated robust financial achievements, including a 7.5% increase in aftersales gross profit on a same-store basis and a 4.6% net interest margin from its Driveway Finance Corporation (DFC). The company's ability to repurchase 1.7% of outstanding shares and increase its dividend by 4% to $0.55 per share underscores its strong financial position and commitment to returning value to shareholders.
Key Financial Metrics
Key metrics from the income statement reveal a gross profit of $1.41 billion, a 5.6% increase from the previous year. The operating profit margin improved to 4.3% of revenue, while the net profit margin rose to 2.2%. The balance sheet shows approximately $1.4 billion in cash and cash equivalents, providing a solid liquidity position.
Our strong first quarter performance reflects the power of our integrated ecosystem and the disciplined execution of the Lithia & Driveway strategy by our teams," said Bryan DeBoer, President and CEO. "We achieved profitable growth year over year in each month this quarter as we grew market share and drove operating efficiencies across our network and adjacencies."
Analysis and Outlook
Lithia Motors Inc (LAD, Financial) continues to demonstrate resilience and adaptability in a dynamic market. The company's strategic acquisitions, such as the Stohlman Subaru store in Virginia and the Elk Grove Subaru store in California, are expected to add $180 million in annualized revenue. With a focus on expanding its network and enhancing operational efficiencies, Lithia Motors is well-positioned to capitalize on growth opportunities in the automotive retail industry.
| Metric | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Total Revenue | $9.2 billion | $8.6 billion | +7% |
| Diluted EPS | $7.94 | $5.89 | +35% |
| Net Income | $211 million | $165 million | +28% |
Overall, Lithia Motors Inc (LAD, Financial) has delivered a strong performance in the first quarter of 2025, exceeding analyst expectations and setting a solid foundation for future growth. The company's strategic initiatives and financial strength position it well to navigate the challenges and opportunities in the automotive retail sector.
Explore the complete 8-K earnings release (here) from Lithia Motors Inc for further details.
