Lithia Motors Inc. reported first‑quarter 2026 results that included $9.27 billion in revenue, a 1% year‑over‑year increase, and diluted earnings per share of $4.28, down 46% from $7.94 in Q1 2025. Adjusted diluted EPS rose to $7.34, a 7% decline from $7.93 a year earlier, but still exceeded consensus estimates of $6.83–$7.07. The company also declared a quarterly dividend of $0.57 per share, payable on May 22 to shareholders of record on May 8, and repurchased approximately 942,000 shares during the quarter at a weighted‑average price of $274.62, leaving $362.9 million of share‑repurchase authorization available.
Revenue growth was modest, driven primarily by a 4.6% same‑store increase in used‑vehicle sales and a 3.8% rise in aftersales revenue. New‑vehicle revenue represented 49% of total sales but only 31% of gross profit, underscoring the lower margin profile of that segment. Aftersales, while accounting for just 11% of revenue, contributed 43% of gross profit, reflecting the company’s focus on high‑margin service and parts. These mix dynamics helped offset the impact of higher operating costs.
GAAP diluted EPS fell sharply because of unrealized losses on Lithia’s Pinewood Technologies investment and other non‑core investment losses, combined with a 7.8% increase in SG&A expenses that pushed the SG&A ratio to 11.2% of revenue from 10.4% a year earlier. The resulting margin compression weighed on operating income, which declined 17.4% year‑over‑year. The company’s gross‑profit margin improved slightly by 0.8% to 31.5%, but the higher cost base eroded earnings.
Adjusted diluted EPS beat expectations largely due to disciplined cost management and a favorable product mix. The stronger contribution from aftersales and used‑vehicle segments, both of which enjoy higher margins than new‑vehicle sales, helped lift adjusted earnings. Management’s focus on capital discipline and operational efficiency also contributed to the adjusted EPS performance.
"Our team drove strong results across our platform and sequential growth in earnings, delivering higher revenues and improved GPU in used vehicles, meaningful growth in aftersales, and growing penetration in Driveway Finance," said President and CEO Bryan DeBoer. "Capital discipline remains a key focus, and we repurchased nearly 4% of our shares at prices well below intrinsic value. Our balance sheet and diversified platform give us a durable foundation to successfully navigate any market cycle," DeBoer added.
The dividend and share‑repurchase program underscore Lithia’s commitment to returning value to shareholders while maintaining a robust balance sheet. The $0.57 dividend represents a 5.3% yield on the current share price, and the repurchase activity, which accounted for roughly 4% of the company’s outstanding shares, reflects confidence in the intrinsic value of Lithia’s equity.
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