Lithia Motors Stock Earnings Reports

Lithia reported a strong Q3 driven by execution and increased recurring earnings. Revenue was $9.7B (up 4.9% YoY) and adjusted diluted EPS was $9.50 (up 17%). Same-store revenue rose 7.7% across business lines, with notable strength in used vehicles (used retail revenue +11.8% YoY; value segment units +22.3%) and aftersales (gross profit +9.1%, margin expanded ~280 bps to 58.4%). Total vehicle GPU continues to normalize (vehicle GPU $4,109, down $216 YoY), with new GPU declines concentrated in certain brand segments and BEV margins lighter. Inventory days improved (new day supply 52 days, down 11 days sequentially; used DSO 46 days). Floorplan interest expense declined ~$19M YoY. Driveway Finance (DFC) is scaling: financing ops income $19M in the quarter, net interest margin 4.6% (+70 bps YoY), and DFC penetration reached ~14.5% (15% milestone reached ahead of plan). SG&A discipline drove leverage (North America adjusted SG&A flat sequentially at 64.8% of gross profit), though the UK faced headwinds from higher regulatory labor costs and will take company-specific productivity actions. Capital allocation: management prioritized opportunistic buybacks (repurchased 5.1% of shares this quarter; ~8% YTD) while continuing to pursue disciplined, U.S.-focused M&A with a $2B acquisition revenue target for 2025 and stated hurdle rates (15–30% of revenue or 3–6x normalized EBITDA, 15% minimum after-tax return). Management reiterated long-term levers (increase store productivity, DFC penetration, SG&A efficiencies, omnichannel adjacencies) to drive durable EPS and cash flow growth.