Lithia Motors LAD posted first-quarter 2026 adjusted earnings of $7.34 per share, down 4% from $7.66 a year ago. However, the bottom line beat the Zacks Consensus Estimate of $7.06 by 4%.
Quarterly revenues rose 1% year over year to $9.27 billion but came in below the Zacks Consensus Estimate of $9.36 billion by 0.9%. Operationally, Driveway Finance Corporation generated record originations of $840 million with an 18% penetration rate and an average FICO score of 750.
Lithia Motors, Inc. Price, Consensus and EPS Surprise
Lithia Motors, Inc. price-consensus-eps-surprise-chart | Lithia Motors, Inc. Quote
LAD’s Revenue Mix Tilts Toward Used and Service
The quarter’s top-line mix showed clear relative strength in used vehicles and aftersales. Used vehicle revenues increased 7.3% year over year to $3,489.4 million, while aftersales revenues rose 6.1% to $1,042.9 million.
Same-store trends were consistent with that mix shift. Same-store used vehicle revenues increased 4.6% to $3,302.0 million, and same-store aftersales revenues advanced 3.8% to $992.1 million, reflecting steady service demand from Lithia’s growing installed base.
Those gains helped offset softer new-vehicle demand. New vehicle revenues declined 4.4% to $4,379.4 million, and finance and insurance revenues slipped 1.3% to $359.7 million, leaving total revenues modestly higher. Same-store new vehicle revenues fell 7.1% year over year, while same-store revenues from finance and insurance fell 3.8%.
Lithia’s Unit Trends Highlight Used Outperformance
Volume data reinforced the quarter’s revenue pattern. New vehicle unit sales decreased 4.7% year over year to 94,787 units, while used retail unit sales increased 2.6% to 110,151 units.
Pricing moved in opposite directions. Average selling price for new vehicles (excluding agency) edged down 0.7% to $46,878, whereas the used retail average selling price climbed 4.7% to $28,464. That combination of higher used pricing and used volumes supported the period’s used revenue growth.
LAD’s Expense Growth Pressures Operating Leverage
Profitability across major lines was mixed, with aftersales continuing to stand out. Aftersales gross margin improved 150 basis points year over year to 58.9%, while total gross profit increased 0.8% to $1,421.7 million.
By contrast, vehicle margins narrowed. New-vehicle gross margin fell 50 basis points to 5.9%, and used-vehicle gross margin decreased 40 basis points to 5.4%. Average gross profit per new vehicle declined 7.2% to $2,739, and used retail gross profit per unit slipped 4.6% to $1,688, signaling a tougher margin backdrop despite improved used pricing.
On the cost side, selling, general and administrative expenses increased 8.9% year over year to $1,037.4 million, outpacing gross profit growth and limiting operating leverage. Depreciation and amortization rose 9.2% to $69.8 million.
As a result, income from operations fell 17.4% to $335.8 million. Floor plan interest expense was $55.9 million, and other interest expense totaled $70.3 million, underscoring the sensitivity of dealership models to interest rates and inventory financing costs.
Lithia’s Noncore Items Drive GAAP-Adjusted Gap
Below operating income, other expense swung to $67.6 million in the quarter. The company’s reconciliation highlighted an investment loss of $73.3 million and contract buyouts of $20.3 million among items excluded from adjusted results.
GAAP diluted earnings per share were $4.28, and net income declined 51.7% to $102.0 million. The stores acquired during the quarter are expected to contribute $425 million in annualized revenues, keeping growth initiatives active even as reported profitability resets lower year over year.
LAD’s Balance Sheet Expands With Inventory Financing
As of March 31, 2026, Lithia’s cash, restricted cash and cash equivalents totaled $421.3 million, up from $341.8 million at year-end 2025. Inventories were $6,193.2 million, and floor plan notes payable climbed to $6,284.5 million, highlighting the financing intensity that comes with managing vehicle stock.
Within longer-dated obligations, long-term debt (net of current maturities) was $6,448.8 million, while total assets stood at $25,749.7 million. On cash flow, net cash used in operating activities was $108.4 million, and cash paid for acquisitions (net of cash acquired) was $145.3 million, alongside $97.1 million of capital expenditures.
Lithia’s Capital Returns Stay Active Amid Platform Build
The board approved a quarterly dividend of 57 cents per share, expected to be paid on May 22, 2026, to shareholders of record on May 8, 2026.
During the first quarter, the company repurchased approximately 942,000 shares at a weighted average price of $274.62, with $362.9 million remaining under the current authorization. The investor presentation also pointed to managed finance receivables of $5 billion in the quarter and net debt to adjusted EBITDA of 3.07x, metrics that help frame how the company is balancing growth, financing and shareholder returns.
LAD currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
Autoliv, Inc. ALV reported first-quarter 2026 results on April 17. It posted adjusted earnings of $2.05 per share, which declined 4.7% year over year but came ahead of the Zacks Consensus Estimate of $1.77 by 15.8%. Net sales were $2.75 billion, up 6.8% from the year-ago quarter and above the Zacks Consensus Estimate of $2.63 billion by 4.52%.
Autoliv ended the quarter with cash and cash equivalents of $342 million, compared with $322 million a year earlier. Long-term debt was $1.7 billion, compared with $1.56 billion a year ago. Shareholder returns continued through dividends. Autoliv paid a cash dividend of 87 cents per share in the quarter, with dividends paid totaling $65 million.
Genuine Parts Company GPC reported its first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share. The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC’s total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions, while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
Tesla, Inc. TSLA reported first-quarter 2026 results on April 22. It posted adjusted earnings of 41 cents per share, which increased 52% year over year and came ahead of the Zacks Consensus Estimate of 36 cents by 13.04%. Quarterly revenues rose 15.8% from the year-ago quarter to $22.39 billion and topped the Zacks Consensus Estimate of $21.92 billion by 2.12%, supported by higher vehicle deliveries and stronger Services and Other activity.
Tesla generated $3.94 billion of net cash from operating activities in the quarter. Capital expenditures were $2.49 billion, up from $1.49 billion in the same period last year, resulting in free cash flow of $1.44 billion. Liquidity remained a key support for the company’s expanded investment agenda. Cash, cash equivalents and short-term investments ended the quarter at $44.74 billion, while debt and finance leases net of the current portion were $7.78 billion.
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