LAD · Lithia Motors, Inc.

Lithia & Driveway reported record first quarter revenues of $9.3 billion, a 1% increase year-over-year, driven by strength in used vehicle and aftersales segments. Used vehicle revenue rose 7.3% to $3.49 billion, while aftersales revenue increased 6.1% to $1.04 billion. Same-store analysis reveals mixed performance: used vehicle same-store revenue grew 4.6% and aftersales increased 3.8%, offsetting a 7.1% decline in same-store new vehicle revenue. Gross margin for aftersales improved 100 basis points to 58.7% on a same-store basis. Despite top-line growth, profitability faced pressure. GAAP net income declined 51.7% to $102.0 million, or $4.28 per diluted share, compared to $211.2 million, or $7.94 per share, in the prior year period. The significant variance between GAAP and adjusted results stems primarily from an unrealized loss on the company's investment in Pinewood Technologies Group PLC. Adjusted net income was $173.3 million, or $7.34 per diluted share, reflecting an 18% and 7% decrease respectively from the prior year. SG&A expense increased 8.9% to $1.04 billion, pressuring operating margins which contracted to 3.6% of revenue from 4.4%. Management highlighted capital discipline, repurchasing approximately 942,000 shares (4% of outstanding) at a weighted average price of $274.62 during the quarter. The company ended the period with approximately $1.4 billion in liquidity. The Board declared a dividend of $0.57 per share, payable May 22, 2026. Stores acquired during the quarter are expected to generate $425 million in annualized revenues.