Profit falls as Lithia & Driveway (NYSE: LAD) posts Q1 2026 results
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Lithia & Driveway reported mixed first quarter 2026 results. Revenue edged up 1% to $9.27 billion, driven by a 7.3% increase in used vehicle revenue and 6.1% growth in aftersales. Same-store used revenue rose 4.6%, and aftersales gross margin improved to 58.7%.
Profitability declined sharply. Net income fell to $102.0 million, down 51.7% from $211.2 million, with diluted EPS dropping to $4.28 from $7.94. Adjusted diluted EPS was $7.34, a 7% decrease from $7.93, reflecting lower new-vehicle margins, higher SG&A, and investment losses.
The company highlighted record $840 million originations at Driveway Finance Corporation and finance operations income of $21.3 million versus $12.5 million. Lithia repurchased about $259 million of stock (roughly 942,000 shares, 4.0% of shares) and declared a $0.57 per-share cash dividend payable May 22, 2026 to shareholders of record on May 8, 2026.
Positive
- None.
Negative
- Earnings and margins deteriorated materially, with Q1 2026 net income down 51.7% to $102.0 million, GAAP diluted EPS down 46% to $4.28, adjusted EPS down 7% to $7.34, and pretax and net profit margins both compressing versus the prior year.
Insights
Revenue was stable, but earnings and margins weakened despite ongoing buybacks.
Lithia & Driveway grew first quarter 2026 revenue 1% to $9.27 billion, but net income dropped 51.7% to $102.0 million. New-vehicle revenue declined while used vehicles and aftersales expanded, shifting the mix toward higher-margin service and parts.
GAAP diluted EPS fell to $4.28 and adjusted diluted EPS to $7.34, both below the prior year. SG&A rose faster than gross profit, and an investment loss plus higher interest costs pressured pretax margin, which slipped to 2.5% from 3.1%.
The company still emphasized capital deployment: it repurchased $259 million of stock, about 4.0% of shares, and approved a $0.57 dividend for Q1 2026. Net debt to adjusted EBITDA increased to 3.07x as total debt and inventory-related borrowings grew, so future filings will clarify how earnings trends and leverage evolve.
8-K Event Classification
3 items: 2.02, 8.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 revenue: $9.27 billion
Q1 2026 net income: $102.0 million
Diluted EPS: $4.28 per share
+5 more
8 metrics
Q1 2026 revenue
$9.27 billion
Total revenues, up 1.0% year over year
Q1 2026 net income
$102.0 million
Down 51.7% versus $211.2 million in Q1 2025
Diluted EPS
$4.28 per share
Q1 2026 GAAP EPS vs $7.94 in Q1 2025
Adjusted diluted EPS
$7.34 per share
Q1 2026 adjusted EPS vs $7.93 in prior year
Dividend per share
$0.57
Cash dividend related to Q1 2026, payable May 22, 2026
Share repurchases
$259 million / 942,000 shares
Q1 2026 buybacks, about 4.0% of outstanding shares
Driveway Finance originations
$840 million
Record Q1 2026 originations with 18.0% penetration rate
Net debt to adjusted EBITDA
3.07x
As of March 31, 2026, vs 2.50x a year earlier
Key Terms
non-GAAP financial measures, adjusted EBITDA, floor plan notes payable, gross profit margin, +1 more
5 terms
non-GAAP financial measures financial
"The financial measures discussed in this release include both GAAP and non-GAAP measures."
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
adjusted EBITDA financial
"LAD Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
floor plan notes payable financial
"Floor plan notes payable | 6,284.5 | | | 5,008.9"
gross profit margin financial
"Gross profit margin | 15.3 | | | 15.4"
Gross profit margin shows how much money a company keeps from sales after paying for the goods or services it sold. It’s like checking how much profit is left over from each dollar earned before covering other costs. A higher margin indicates the company makes more money from its sales, which helps assess its profitability and efficiency.
net debt financial
"Net Debt | $ | 5,001.8 | | | $ | 3,986.4"
Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.
Earnings Snapshot
Revenue: $9.27 billion
Q1 2026
Revenue
$9.27 billion
+1.0% YoY
Net income
$102.0 million
-51.7% YoY
Diluted EPS
$4.28
-46.1% YoY
Adjusted diluted EPS
$7.34
-7.4% YoY
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported)
Lithia Motors, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||
(541 ) 776-6401
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On April 29, 2026 Lithia Motors, Inc. issued a press release announcing financial results for the first quarter of 2026. A copy of the press release is attached as Exhibit 99.1
Item 8.01. Other Events
On April 29, 2026, Lithia Motors, Inc. announced a $0.57 per share cash dividend, to be paid on May 22, 2026 to shareholders of record as of May 8, 2026.
The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | ||||
99.1 | Press Release of Lithia Motors, Inc. dated April 29, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 29, 2026 | LITHIA MOTORS, INC. | |||||||
| Registrant | ||||||||
| By: | /s/ Tina Miller | |||||||
| Tina Miller | ||||||||
| Chief Financial Officer, Senior Vice President, and Principal Accounting Officer | ||||||||
Lithia & Driveway (LAD) Reports First Quarter Results
________________________________________________
Key Highlights
•Record first quarter revenues of $9.3 billion
•Used vehicle revenue increased 4.6% on a same store basis in the quarter
•Used retail GPUs increased 9%, or $133, sequentially
•Aftersales revenue increased 3.8%, gross profit increased by 5.7% and gross margin was 58.7%, a 100-basis point increase, on a same-store basis
•Driveway Finance Corporation achieved record originations of $840 million, with an 18.0% penetration rate and an average FICO score of 750 in the quarter
•First quarter diluted earnings per share of $4.28 and adjusted diluted earnings per share of $7.34
•Repurchased $259 million of shares, representing 4.0% of outstanding shares in the quarter
Medford, Oregon, April 29, 2026 - Lithia & Driveway (NYSE: LAD), the largest global automotive retailer, today reported financial results for the first quarter of 2026.
"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 Bryan DeBoer, President and CEO. “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."
First Quarter 2026 Operational Summary
First quarter 2026 revenue increased 1% to $9.3 billion from $9.2 billion in the first quarter of 2025.
First quarter 2026 diluted earnings per share attributable to LAD was $4.28, a 46% decrease from $7.94 per share reported in the first quarter of 2025. After adjusting for the unrealized loss on our investment in Pinewood Technologies Group PLC and other non-core items, adjusted diluted earnings per share attributable to LAD for the first quarter of 2026 was $7.34, a 7% decrease compared to $7.93 per share in the same period of 2025.
First quarter 2026 net income was $102.0 million, a 51.7% decrease compared to net income of $211.2 million in the first quarter of 2025. After adjusting for the unrealized loss on our investment in Pinewood Technologies Group PLC and other non-core items, adjusted net income for the first quarter 2026 was $173.3 million, an 18% decrease compared to adjusted net income of $210.9 million for the same period of 2025.
The financial measures discussed in this release include both GAAP and non-GAAP measures. See “Reconciliation of Certain Non-GAAP Measures”.
Corporate Development
Stores acquired during the first quarter are expected to generate $425 million in annualized revenues.
Balance Sheet Update
LAD ended the first quarter with approximately $1.4 billion in cash and cash equivalents, marketable securities, and availability on our revolving lines of credit.
Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of $0.57 per share related to first quarter 2026 financial results. The dividend is expected to be paid on May 22, 2026 to shareholders of record on May 8, 2026.
During the first quarter of 2026, we repurchased approximately 942,000 shares at a weighted average price of $274.62. Under the current share repurchase authorization approximately $362.9 million remains available.
First Quarter Earnings Conference Call and Updated Presentation
The first quarter 2026 conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting first quarter 2026 results has been added to our investor relations website. To listen live on our website or for replay, visit investors.lithiadriveway.com and click on Quarterly Earnings.
About Lithia & Driveway (LAD)
Lithia & Driveway (NYSE: LAD) is the largest global automotive retailer providing a wide array of products and services throughout the vehicle ownership lifecycle. Simple, convenient, and transparent experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies. We deliver consistent, profitable growth in a massive and unconsolidated industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever and however consumers desire.
Sites
www.lithia.com
investors.lithiadriveway.com
www.lithiacareers.com
www.driveway.com
www.greencars.com
www.drivewayfinancecorp.com
Lithia & Driveway on Facebook
https://www.facebook.com/LithiaMotors
https://www.facebook.com/DrivewayHQ
Lithia & Driveway on X
https://x.com/lithiamotors
https://x.com/DrivewayHQ
https://x.com/GreenCarsHQ
Lithia & Driveway on LinkedIn
https://www.linkedin.com/company/lithia-motors/
Lithia & Driveway on YouTube
https://www.youtube.com/@Lithia_Motors/featured
Contact:
Jardon Jaramillo
Senior Director - Finance and Investor Relations
IR@lithia.com
(503) 799-5254
Forward-Looking Statements
Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as “project,” “outlook,” “target,” “may,” “will,” “would,” “should,” “seek,” “expect,” “plan,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “likely,” “ensure,” “goal,” “strategy,” “future,” “maintain,” and “continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:
•The profitability of our strategy and growth
•Future market conditions, including anticipated vehicle and other sales, gross profit and inventory supply
•Our business strategy and plans, including our achieving our long-term financial targets
•The growth, expansion, make-up and success of our network, including our finding accretive acquisitions that meet our target valuations and acquiring additional stores
•Annualized revenues from acquired stores or achieving target returns
•The growth and performance of our Driveway e-commerce home solution and Driveway Finance Corporation (DFC), their synergies and other impacts on our business and our ability to meet Driveway and DFC-related targets
•The impact of sustainable vehicles and other market and regulatory changes on our business, including evolving vehicle distribution models
•Our capital allocations and uses and levels of capital expenditures in the future
•Expected operating results, such as improved store performance, continued improvement of selling, general and administrative expenses as a percentage of gross profit and any projections
•Our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facilities, unfinanced real estate and other financing sources
•Our continuing to purchase shares under our share repurchase program
•Our compliance with financial and restrictive covenants in our credit facilities and other debt agreements
•Our programs and initiatives for team member recruitment, training, and retention
•Our strategies and targets for customer retention, growth, market position, operations, financial results and risk management
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this presentation. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:
•Future national and local economic and financial conditions, including as a result of inflation, interest rates, tariffs, governmental actions, programs and spending, and public health issues
•The market for dealerships, including the availability of stores to us for an acceptable price
•Changes in customer demand, levels of consumer debt, consumer confidence and manufacturer sales incentives, and the electric vehicle landscape and the impact of evolving digital technologies
•Changes in our relationship with, and the financial and operational stability of, OEMs and other suppliers, and vehicle delivery models
•Changes in the competitive landscape, including through technology and our ability to deliver new products, services and customer experiences and a portfolio of in-demand and available vehicles
•Risks associated with our indebtedness, including available borrowing capacity, interest rates, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms
•The adequacy of our cash flows and other conditions which may affect our ability to fund capital expenditures, obtain favorable financing and pay our quarterly dividend at planned levels
•Disruptions to our technology network including computer systems, as well as natural events such as severe weather or man-made or other disruptions of our operating systems, facilities or equipment
•Government regulations and legislation
•The risks set forth throughout “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, and in “Part II, Item 1A. Risk Factors” of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.
Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Non-GAAP Financial Measures
All “adjusted” financial measures in this presentation are non-GAAP financial measures, as are EBITDA and net debt. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. We caution you not to place undue reliance on such non-GAAP measures and to consider them together with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.
LAD
Consolidated Statements of Operations (Unaudited)
(In millions except per share data)
| Three months ended March 31, | % | ||||||||||||||||
| Increase | |||||||||||||||||
| 2026 | 2025 | (Decrease) | |||||||||||||||
| Revenues: | |||||||||||||||||
| New vehicle | $ | 4,379.4 | $ | 4,580.4 | (4.4) | % | |||||||||||
| Used vehicle | 3,489.4 | 3,250.5 | 7.3 | ||||||||||||||
| Finance and insurance | 359.7 | 364.3 | (1.3) | ||||||||||||||
| Aftersales | 1,042.9 | 983.1 | 6.1 | ||||||||||||||
Total revenues | 9,271.4 | 9,178.3 | 1.0 | % | |||||||||||||
| Cost of sales: | |||||||||||||||||
| New vehicle | 4,119.8 | 4,287.0 | (3.9) | ||||||||||||||
| Used vehicle | 3,301.7 | 3,061.8 | 7.8 | ||||||||||||||
| Aftersales | 428.2 | 419.1 | 2.2 | ||||||||||||||
| Total cost of sales | 7,849.7 | 7,767.9 | 1.1 | ||||||||||||||
| Gross profit | 1,421.7 | 1,410.4 | 0.8 | % | |||||||||||||
| Finance operations income | 21.3 | 12.5 | 70.4% | ||||||||||||||
| SG&A expense | 1,037.4 | 952.7 | 8.9 | ||||||||||||||
| Depreciation and amortization | 69.8 | 63.9 | 9.2 | ||||||||||||||
| Income from operations | 335.8 | 406.3 | (17.4) | % | |||||||||||||
| Floor plan interest expense | (55.9) | (57.1) | (2.1) | ||||||||||||||
| Other interest expense | (70.3) | (65.5) | 7.3 | ||||||||||||||
| Other (expense) income | (67.6) | 0.8 | NM | ||||||||||||||
| Income before income taxes | 142.0 | 284.5 | (50.1) | % | |||||||||||||
| Income tax expense | (40.0) | (73.3) | (45.4) | ||||||||||||||
| Income tax rate | 28.2 | % | 25.8 | % | |||||||||||||
| Net income | $ | 102.0 | $ | 211.2 | (51.7) | % | |||||||||||
| Net income attributable to non-controlling interests | (1.6) | (1.7) | (5.9)% | ||||||||||||||
| Net income attributable to LAD | $ | 100.4 | $ | 209.5 | (52.1) | % | |||||||||||
| Diluted earnings per share attributable to LAD: | |||||||||||||||||
| Net income per share | $ | 4.28 | $ | 7.94 | (46.1) | % | |||||||||||
| Diluted shares outstanding | 23.4 | 26.4 | (11.4) | % | |||||||||||||
NM - not meaningful
LAD
Key Performance Metrics (Unaudited)
| Three months ended March 31, | % | ||||||||||||||||
| Increase | |||||||||||||||||
| 2026 | 2025 | (Decrease) | |||||||||||||||
| Gross margin | |||||||||||||||||
| New vehicle | 5.9 | % | 6.4 | % | (50) | bps | |||||||||||
| Used vehicle | 5.4 | 5.8 | (40) | ||||||||||||||
| Finance and insurance | 100.0 | 100.0 | — | ||||||||||||||
| Aftersales | 58.9 | 57.4 | 150 | ||||||||||||||
| Gross profit margin | 15.3 | 15.4 | (10) | ||||||||||||||
| Unit sales | |||||||||||||||||
| New vehicle | 94,787 | 99,503 | (4.7) | % | |||||||||||||
| Used vehicle retail | 110,151 | 107,326 | 2.6 | ||||||||||||||
| Average selling price (excluding agency) | |||||||||||||||||
| New vehicle | $ | 46,878 | $ | 47,209 | (0.7) | % | |||||||||||
| Used vehicle retail | 28,464 | 27,198 | 4.7 | ||||||||||||||
| Average gross profit per unit | |||||||||||||||||
| New vehicle | $ | 2,739 | $ | 2,950 | (7.2) | % | |||||||||||
| Used vehicle retail | 1,688 | 1,769 | (4.6) | ||||||||||||||
| Finance and insurance | 1,807 | 1,804 | 0.2 | ||||||||||||||
Total vehicle(1) | 3,938 | 4,093 | (3.8) | ||||||||||||||
| Revenue mix | |||||||||||||||||
| New vehicle | 47.2 | % | 49.9 | % | |||||||||||||
| Used vehicle | 37.6 | 35.4 | |||||||||||||||
| Finance and insurance, net | 3.9 | 4.0 | |||||||||||||||
| Aftersales | 11.3 | 10.7 | |||||||||||||||
| Gross Profit Mix | |||||||||||||||||
| New vehicle | 18.3 | % | 20.8 | % | |||||||||||||
| Used vehicle | 13.2 | 13.4 | |||||||||||||||
| Finance and insurance, net | 25.3 | 25.8 | |||||||||||||||
| Aftersales | 43.2 | 40.0 | |||||||||||||||
| Adjusted | As reported | ||||||||||||||||||||||
| Three months ended March 31, | Three months ended March 31, | ||||||||||||||||||||||
| Other metrics | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SG&A as a % of revenue | 11.0 | % | 10.5 | % | 11.2 | % | 10.4 | % | |||||||||||||||
| SG&A as a % of gross profit | 71.5 | 68.2 | 73.0 | 67.5 | |||||||||||||||||||
| Operating profit as a % of revenue | 3.8 | 4.3 | 3.6 | 4.4 | |||||||||||||||||||
| Operating profit as a % of gross profit | 25.1 | 28.2 | 23.6 | 28.8 | |||||||||||||||||||
| Pretax margin | 2.5 | 3.1 | 1.5 | 3.1 | |||||||||||||||||||
| Net profit margin | 1.9 | 2.3 | 1.1 | 2.3 | |||||||||||||||||||
(1)Includes the sales and gross profit related to new, used, and finance and insurance and unit sales for new and used retail
LAD
Same Store Operating Highlights (Unaudited)
| Three months ended March 31, | % | ||||||||||||||||
| Increase | |||||||||||||||||
| 2026 | 2025 | (Decrease) | |||||||||||||||
| Revenues | |||||||||||||||||
| New vehicle | $ | 4,156.8 | $ | 4,474.3 | (7.1) | % | |||||||||||
| Used vehicle | 3,302.0 | 3,157.4 | 4.6 | ||||||||||||||
| Finance and insurance | 345.2 | 358.7 | (3.8) | ||||||||||||||
| Aftersales | 992.1 | 955.8 | 3.8 | ||||||||||||||
| Total revenues | 8,796.1 | 8,946.2 | (1.7) | ||||||||||||||
| Gross profit | |||||||||||||||||
| New vehicle | $ | 246.8 | $ | 287.8 | (14.2) | % | |||||||||||
| Used vehicle | 178.8 | 187.3 | (4.5) | ||||||||||||||
| Finance and insurance | 345.2 | 358.7 | (3.8) | ||||||||||||||
| Aftersales | 582.6 | 551.1 | 5.7 | ||||||||||||||
| Total gross profit | 1,353.4 | 1,384.9 | (2.3) | ||||||||||||||
| Gross margin | |||||||||||||||||
| New vehicle | 5.9 | % | 6.4 | % | (50) | bps | |||||||||||
| Used vehicle | 5.4 | 5.9 | (50) | ||||||||||||||
| Finance and insurance | 100.0 | 100.0 | — | ||||||||||||||
| Aftersales | 58.7 | 57.7 | 100 | ||||||||||||||
| Gross profit margin | 15.4 | 15.5 | (10) | ||||||||||||||
| Unit sales | |||||||||||||||||
| New vehicle | 90,671 | 97,617 | (7.1) | % | |||||||||||||
| Used vehicle retail | 105,541 | 104,961 | 0.6 | ||||||||||||||
| Average selling price (excluding agency) | |||||||||||||||||
| New vehicle | $ | 46,545 | $ | 47,018 | (1.0) | % | |||||||||||
| Used vehicle retail | 28,142 | 27,019 | 4.2 | ||||||||||||||
| Average gross profit per unit | |||||||||||||||||
| New vehicle | $ | 2,722 | $ | 2,949 | (7.7) | % | |||||||||||
| Used vehicle retail | 1,680 | 1,795 | (6.4) | ||||||||||||||
| Finance and insurance | 1,813 | 1,812 | 0.1 | ||||||||||||||
Total vehicle(1) | 3,928 | 4,116 | (4.6) | ||||||||||||||
(1)Includes the sales and gross profit related to new, used, and finance and insurance and unit sales for new and used retail
LAD
Other Highlights (Unaudited)
| Three months ended March 31, | |||||||||||
| 2026 | |||||||||||
| Key Performance by Country | Total Revenue | Total Gross Profit | |||||||||
United States | 75.6% | 80.9% | |||||||||
United Kingdom | 21.4% | 16.7% | |||||||||
Canada | 3.0% | 2.4% | |||||||||
| As of | |||||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||||
Days’ Supply(1) | 2026 | 2025 | 2025 | ||||||||||||||
| New vehicle inventory | 49 | 54 | 43 | ||||||||||||||
| Used vehicle inventory | 47 | 48 | 44 | ||||||||||||||
(1) Days’ supply in inventory is calculated using on-ground inventory unit levels and a 30-day total unit sales volumes, both at the end of each reporting period.
Selected Financing Operations Financial Information
| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | % (1) | 2025 | % (1) | |||||||||||||||||||
| Interest and fee income | $ | 110.5 | 9.0 | $ | 94.4 | 9.4 | |||||||||||||||||
| Interest expense | (51.6) | (4.2) | (48.1) | (4.8) | |||||||||||||||||||
| Total interest margin | $ | 58.9 | 4.8 | $ | 46.3 | 4.6 | |||||||||||||||||
| Lease income | 23.9 | 20.5 | |||||||||||||||||||||
| Lease costs | (20.2) | (16.8) | |||||||||||||||||||||
| Lease income, net | 3.7 | 3.7 | |||||||||||||||||||||
| Provision expense | (26.4) | (2.1) | (25.5) | (2.5) | |||||||||||||||||||
| Other financing operations expenses | (14.9) | (1.2) | (12.0) | (1.2) | |||||||||||||||||||
| Finance operations income | $ | 21.3 | $ | 12.5 | |||||||||||||||||||
| Total average managed finance receivables | $ | 5,004.0 | $ | 4,062.1 | |||||||||||||||||||
(1)Annualized percentage of total average managed finance receivables
LAD
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
| March 31, 2026 | December 31, 2025 | ||||||||||
| Cash, restricted cash, and cash equivalents | $ | 421.3 | $ | 341.8 | |||||||
| Trade receivables, net | 1,261.4 | 1,134.1 | |||||||||
| Inventories, net | 6,193.2 | 6,119.6 | |||||||||
| Other current assets | 275.9 | 262.5 | |||||||||
| Total current assets | $ | 8,151.8 | $ | 7,858.0 | |||||||
| Property and equipment, net | 4,994.5 | 4,936.0 | |||||||||
| Finance receivables, net | 5,012.9 | 4,755.1 | |||||||||
| Intangibles | 5,242.0 | 5,254.1 | |||||||||
| Other non-current assets | 2,348.5 | 2,304.0 | |||||||||
| Total assets | $ | 25,749.7 | $ | 25,107.2 | |||||||
| Floor plan notes payable | 6,284.5 | 5,008.9 | |||||||||
| Other current liabilities | 1,915.2 | 1,687.8 | |||||||||
| Total current liabilities | $ | 8,199.7 | $ | 6,696.7 | |||||||
| Long-term debt, less current maturities | 6,448.8 | 7,274.9 | |||||||||
| Non-recourse notes payable, less current maturities | 2,565.8 | 2,404.2 | |||||||||
| Other long-term liabilities and deferred revenue | 2,125.9 | 2,103.0 | |||||||||
| Total liabilities | $ | 19,340.2 | $ | 18,478.8 | |||||||
| Equity | 6,409.5 | 6,628.4 | |||||||||
| Total liabilities and equity | $ | 25,749.7 | $ | 25,107.2 | |||||||
LAD
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
| Three months ended March 31, | |||||||||||
| Cash flows from operating activities: | 2026 | 2025 | |||||||||
| Net income | $ | 102.0 | $ | 211.2 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities | 212.2 | 146.9 | |||||||||
| Changes in: | |||||||||||
| Inventories | (97.2) | 186.4 | |||||||||
| Finance receivables | (261.2) | (179.1) | |||||||||
| Floor plan notes payable | (65.5) | 23.3 | |||||||||
| Other operating activities | 1.3 | (66.6) | |||||||||
Net cash (used in) provided by operating activities | (108.4) | 322.1 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (97.1) | (68.7) | |||||||||
| Cash paid for acquisitions, net of cash acquired | (145.3) | (84.5) | |||||||||
| Proceeds from sales of stores | — | 43.2 | |||||||||
| Other investing activities | 1.9 | (7.1) | |||||||||
| Net cash used in investing activities | (240.5) | (117.1) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Net borrowings on floor plan notes payable, non-trade | 1,378.3 | (44.0) | |||||||||
| Net borrowings on non-recourse notes payable | 160.0 | 254.4 | |||||||||
Net borrowings on other debt and finance lease liabilities | (798.8) | (159.7) | |||||||||
| Proceeds from issuance of common stock | 5.8 | 5.6 | |||||||||
| Repurchase of common stock | (297.0) | (143.4) | |||||||||
| Dividends paid | (12.8) | (13.9) | |||||||||
| Other financing activity | (3.5) | (72.0) | |||||||||
Net cash provided by (used in) financing activities | 432.0 | (173.0) | |||||||||
| Effect of exchange rate changes on cash and restricted cash | (1.7) | 0.3 | |||||||||
| Change in cash, restricted cash, and cash equivalents | 81.4 | 32.3 | |||||||||
| Cash, restricted cash, and cash equivalents at beginning of period | 391.3 | 445.8 | |||||||||
| Cash, restricted cash, and cash equivalents at end of period | 472.7 | 478.1 | |||||||||
LAD
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In millions)
| Three months ended March 31, | |||||||||||
| Net cash provided by operating activities | 2026 | 2025 | |||||||||
| As reported | $ | (108.4) | $ | 322.1 | |||||||
Floor plan notes payable, non-trade, net(1) | 1,378.3 | (44.0) | |||||||||
| Adjust: finance receivables activity | 261.2 | 179.1 | |||||||||
| Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory | (11.3) | (9.9) | |||||||||
| Adjusted | $ | 1,519.8 | $ | 447.3 | |||||||
(1) Includes the impact of converting inventory‑secured revolvers to floorplan facilities during the quarter, increasing net floorplan borrowings and adjusted operating cash flows $1,138.3 million.
LAD
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except for per share data)
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| As reported | Investment loss | Acquisition expenses | Contract buyouts | Tax attribute | Adjusted | ||||||||||||||||||||||||||||||
| Selling, general and administrative | $ | 1,037.4 | $ | — | $ | (0.3) | $ | (20.3) | $ | — | $ | 1,016.8 | |||||||||||||||||||||||
| Operating income | 335.8 | — | 0.3 | 20.3 | — | 356.4 | |||||||||||||||||||||||||||||
| Other income (expense), net | (67.6) | 73.3 | — | — | — | 5.7 | |||||||||||||||||||||||||||||
| Income before income taxes | 142.0 | 73.3 | 0.3 | 20.3 | — | 235.9 | |||||||||||||||||||||||||||||
| Income tax (provision) benefit | (40.0) | (18.6) | (0.1) | (5.1) | 1.2 | (62.6) | |||||||||||||||||||||||||||||
| Net income | $ | 102.0 | $ | 54.7 | $ | 0.2 | $ | 15.2 | $ | 1.2 | $ | 173.3 | |||||||||||||||||||||||
| Net income attributable to non-controlling interests | (1.6) | — | — | — | — | (1.6) | |||||||||||||||||||||||||||||
| Net income attributable to LAD | $ | 100.4 | $ | 54.7 | $ | 0.2 | $ | 15.2 | $ | 1.2 | $ | 171.7 | |||||||||||||||||||||||
| Diluted earnings per share attributable to LAD | $ | 4.28 | $ | 2.34 | $ | 0.01 | $ | 0.65 | $ | 0.06 | $ | 7.34 | |||||||||||||||||||||||
| Diluted share count | 23.4 | ||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| As reported | Net gain on disposal of stores | Investment loss | Insurance reserves | Acquisition expenses | Tax attribute | Adjusted | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative | $ | 952.7 | $ | 9.4 | $ | — | $ | (0.4) | $ | (0.2) | $ | — | $ | 961.5 | |||||||||||||||||||||||||||
| Operating income | 406.3 | (9.4) | — | 0.4 | 0.2 | — | 397.5 | ||||||||||||||||||||||||||||||||||
| Other income (expense), net | 0.8 | — | 9.7 | — | — | — | 10.5 | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 284.5 | (9.4) | 9.7 | 0.4 | 0.2 | — | 285.4 | ||||||||||||||||||||||||||||||||||
| Income tax (provision) benefit | (73.3) | 2.4 | (2.5) | (0.1) | — | (1.0) | (74.5) | ||||||||||||||||||||||||||||||||||
| Net income | $ | 211.2 | $ | (7.0) | $ | 7.2 | $ | 0.3 | $ | 0.2 | $ | (1.0) | $ | 210.9 | |||||||||||||||||||||||||||
| Net income attributable to non-controlling interests | (1.7) | — | — | — | — | — | (1.7) | ||||||||||||||||||||||||||||||||||
| Net income attributable to LAD | $ | 209.5 | $ | (7.0) | $ | 7.2 | $ | 0.3 | $ | 0.2 | $ | (1.0) | $ | 209.2 | |||||||||||||||||||||||||||
| Diluted earnings per share attributable to LAD | $ | 7.94 | $ | (0.25) | $ | 0.27 | $ | 0.01 | $ | — | $ | (0.04) | $ | 7.93 | |||||||||||||||||||||||||||
| Diluted share count | 26.4 | ||||||||||||||||||||||||||||||||||||||||
LAD
Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)
(In millions)
| Three months ended March 31, | % | ||||||||||||||||
| Increase | |||||||||||||||||
| 2026 | 2025 | (Decrease) | |||||||||||||||
| EBITDA and Adjusted EBITDA | |||||||||||||||||
| Net income | $ | 102.0 | $ | 211.2 | (51.7) | % | |||||||||||
| Flooring interest expense | 55.9 | 57.1 | (2.1) | ||||||||||||||
| Other interest expense | 70.3 | 65.5 | 7.3 | ||||||||||||||
| Financing operations interest expense | 51.6 | 48.1 | 7.3 | ||||||||||||||
| Income tax expense | 40.0 | 73.3 | (45.4) | ||||||||||||||
| Depreciation and amortization | 69.8 | 63.9 | 9.2 | ||||||||||||||
| EBITDA | $ | 389.6 | $ | 519.1 | (24.9) | % | |||||||||||
| Other adjustments: | |||||||||||||||||
| Less: flooring interest expense | $ | (55.9) | $ | (57.1) | (2.1) | ||||||||||||
| Less: financing operations interest expense | (51.6) | (48.1) | 7.3 | ||||||||||||||
| Less: used vehicle line of credit interest | (1.4) | (3.0) | (53.3) | ||||||||||||||
| Add: acquisition expenses | 0.3 | 0.2 | 50.0 | ||||||||||||||
| Add: loss (gain) on disposal of stores | — | (9.4) | NM | ||||||||||||||
Add: investment loss (gain)(1) | 73.3 | 9.7 | NM | ||||||||||||||
| Add: insurance reserves | — | 0.4 | NM | ||||||||||||||
Add: contract buyouts | 20.3 | — | NM | ||||||||||||||
| Adjusted EBITDA | $ | 374.6 | $ | 411.8 | (9.0) | % | |||||||||||
NM - not meaningful
(1) Investment losses (gains) retrospectively included in adjusted non-GAAP financial measures presented
| As of | % | |||||||||||||
| March 31, | Increase | |||||||||||||
| Net Debt to Adjusted EBITDA | 2026 | 2025 | (Decrease) | |||||||||||
Floor plan notes payable | $ | 6,284.5 | $ | 4,904.9 | 28.1 | % | ||||||||
| Used and service loaner vehicle inventory financing facility | 3.6 | 968.7 | (99.6) | |||||||||||
| Revolving lines of credit | 1,738.8 | 1,558.3 | 11.6 | |||||||||||
| Warehouse facilities | 1,337.0 | 768.5 | 74.0 | |||||||||||
| Non-recourse notes payable | 2,634.0 | 2,363.7 | 11.4 | |||||||||||
| 4.625% Senior notes due 2027 | 400.0 | 400.0 | — | |||||||||||
| 3.875% Senior notes due 2029 | 800.0 | 800.0 | — | |||||||||||
| 5.500% Senior notes due 2030 | 600.0 | — | — | |||||||||||
| 4.375% Senior notes due 2031 | 550.0 | 550.0 | — | |||||||||||
| Finance leases and other debt | 1,156.2 | 1,014.6 | 14.0 | |||||||||||
| Unamortized debt issuance costs | (26.3) | (24.1) | 9.1 | |||||||||||
| Total debt | $ | 15,477.8 | $ | 13,304.6 | 16.3 | % | ||||||||
| Less: Inventory related debt | $ | (6,288.1) | $ | (5,873.6) | 7.1 | % | ||||||||
| Less: Financing operations related debt | (3,971.0) | (3,132.2) | 26.8 | |||||||||||
Less: Unrestricted cash and cash equivalents | (160.8) | (234.4) | (31.4) | |||||||||||
Less: Marketable securities | (55.9) | (53.7) | 4.1 | |||||||||||
| Less: Availability on used vehicle and service loaner financing facilities | (0.2) | (24.3) | (99.2) | |||||||||||
| Net Debt | $ | 5,001.8 | $ | 3,986.4 | 25.5 | % | ||||||||
| TTM Adjusted EBITDA | $ | 1,629.4 | $ | 1,596.5 | 2.1 | % | ||||||||
| Net debt to Adjusted EBITDA | 3.07 | x | 2.50 | x | ||||||||||
NM - not meaningful
FAQ
How did Lithia & Driveway (LAD) perform financially in Q1 2026?
Lithia & Driveway grew revenue slightly but saw a steep profit decline. Q1 2026 revenue reached $9.27 billion, up 1% year over year. Net income fell to $102.0 million from $211.2 million, and diluted EPS dropped to $4.28 from $7.94 as margins and investment results weakened.
What were Lithia & Driveway (LAD) adjusted earnings in Q1 2026?
Adjusted profitability declined, but less than GAAP results. Adjusted diluted earnings per share were $7.34 in Q1 2026, down from $7.93 a year earlier. Adjusted net income was $173.3 million versus $210.9 million, excluding unrealized investment loss and other non-core items from the reported figures.
How did used vehicles and aftersales drive LAD’s Q1 2026 results?
Used vehicles and aftersales were relative bright spots. Used vehicle revenue rose 7.3% to $3.49 billion, with same-store used revenue up 4.6%. Aftersales revenue increased 6.1% to $1.04 billion, and same-store aftersales gross profit grew 5.7%, with gross margin improving to 58.7% in the quarter.
What dividend did Lithia & Driveway (LAD) declare for Q1 2026?
The board approved a $0.57 per-share cash dividend. The dividend relates to first quarter 2026 results and is expected to be paid on May 22, 2026 to shareholders of record as of May 8, 2026, continuing the company’s practice of returning cash to shareholders.
How much stock did Lithia & Driveway (LAD) repurchase in Q1 2026?
The company executed substantial share repurchases during the quarter. Lithia & Driveway bought back approximately 942,000 shares for $259 million at a weighted average price of $274.62, representing about 4.0% of outstanding shares, with $362.9 million remaining under the current authorization.
What were LAD’s key balance sheet and leverage metrics in Q1 2026?
Assets and debt both increased, raising leverage modestly. Total assets were $25.75 billion, with total debt of $15.48 billion. Net debt was $5.00 billion, and net debt to trailing twelve-month adjusted EBITDA measured 3.07x, up from 2.50x a year earlier.
How did Driveway Finance Corporation perform in Q1 2026 for LAD?
Driveway Finance Corporation delivered record originations and higher income. Originations reached $840 million with an 18.0% penetration rate and average FICO score of 750. Finance operations income rose to $21.3 million from $12.5 million, helped by higher interest margin on $5.00 billion of average managed finance receivables.