Lithia Motors(US:LAD)2025-10-24 20:10Financial Performance - Total revenues for Q3 2025 reached $9,675.8 million, a 4.9% increase compared to $9,221.0 million in Q3 2024[118] - Gross profit for Q3 2025 was $1,466.0 million, up 2.5% from $1,430.4 million in Q3 2024[118] - Total revenues for Q3 2025 increased by 7.7% to $9,453.4 million compared to Q3 2024, driven by growth in new and used vehicle retail sales[121] - Total gross profit for Q3 2025 was $1,433.5 million, a 3.2% increase compared to Q3 2024[121] - The company achieved a net income growth in 2025, primarily driven by increased total gross profit and financing operations, while managing SG&A costs effectively[116] - For the nine months ended September 30, 2025, net income attributable to Lithia Motors, Inc. was $239.4 million, with diluted earnings per share of $9.50[194] - For the nine months ended September 30, 2025, net income attributable to Lithia Motors, Inc. was $682.7 million, a decrease of $6.1 million compared to the same period in 2024[196] - Diluted earnings per share for Lithia Motors, Inc. for the nine months ended September 30, 2025, was $26.42, down from $26.66 in 2024, reflecting a decrease of 0.24[196] Vehicle Sales and Profitability - New vehicle retail gross profit decreased by 9.7% to $276.7 million in Q3 2025, while used vehicle retail gross profit increased by 2.4% to $193.4 million[118] - The average selling price for new vehicles rose by 2.7% to $47,913 in Q3 2025, compared to $46,649 in Q3 2024[118] - Same store new vehicle retail revenue increased by 5.5% in Q3 2025, supported by a 3.0% increase in average selling prices and a 2.5% increase in unit volume[123] - Used vehicle revenue for Q3 2025 increased by 8.9%, with same store performance showing an 11.8% increase due to a 6.3% rise in unit volume and a 5.1% increase in average selling prices[128] - New vehicle retail gross profit per unit decreased by 10.8% in Q3 2025, resulting in a total same store gross profit per unit of $4,916[124] - Used vehicle retail gross profit per unit decreased by $22 to $3,435 in Q3 2025, reflecting the impact of market conditions[129] Financing Operations - Financing Operations income for Q3 2025 included interest and fee income of $104.9 million, up from $88.8 million in Q3 2024[143] - Net loans originated in Q3 2025 reached $731.6 million, up from $518.1 million in Q3 2024, representing a 41.1% increase[146] - The total penetration rate for vehicle units financed increased to 14.5% in Q3 2025 from 11.6% in Q3 2024[146] - Financing operations recorded an interest margin expansion to 4.6% in Q3 2025, driven by increased interest income and decreased cost of funds[149] - Annualized net credit losses as a percentage of total average managed receivables decreased to 1.9% in Q3 2025 from 3.0% in Q3 2024, indicating improved credit quality[146] Expenses and Margins - Total SG&A expenses for Q3 2025 were $998.0 million, a 5.8% increase from $943.6 million in Q3 2024[158] - SG&A as a percentage of gross profit increased to 68.1% in Q3 2025 from 66.0% in Q3 2024, reflecting growth in SG&A outpacing gross profit growth[158] - Operating margin decreased by 20 basis points to 4.4% in Q3 2025 compared to Q3 2024, primarily due to a 5.8% increase in SG&A expenses[178] Capital Expenditures and Investments - During the first nine months of 2025, the company utilized $257.7 million for capital expenditures and $662.3 million for share repurchases[114] - The company invested $257.7 million in capital expenditures for the nine months ended September 30, 2025, contributing to increased depreciation expense[176] - Capital expenditures for the nine months ended September 30, 2025, were $257.7 million, a decrease of $14.2 million compared to $271.9 million in 2024[205] Liquidity and Cash Flow - As of September 30, 2025, available liquidity was approximately $1.9 billion, including $206.5 million in unrestricted cash and $1.6 billion in credit facilities[114] - Total current available funds as of September 30, 2025, amounted to $1,901.2 million, an increase of 40.4% from $1,353.8 million at December 31, 2024[199] - Cash provided by operating activities for the nine months ended September 30, 2025, decreased by $130.3 million to $233.0 million compared to $363.3 million in 2024[201] - Net cash used in investing activities was $479.4 million for the nine months ended September 30, 2025, a significant decrease from $1.8 billion in 2024[204] - The company reported a net cash provided by financing activities of $264.5 million for the nine months ended September 30, 2025, down from $880.2 million in 2024, a decrease of $615.7 million[201] Shareholder Returns - The company repurchased a total of 2,139,114 shares at an average price of $314.16, with $910.1 million remaining available for repurchases as of September 30, 2025[213] - Dividends paid in 2025 included $0.53 per share in March, $0.55 in May, and $0.55 in August, totaling approximately $42.1 million[214] Strategic Initiatives - The company targets an annual after-tax return of over 15% for acquisitions, averaging over 25% return by the third year of ownership[110] - The company expects to utilize future capital expenditures for facility upgrades associated with recent acquisitions, indicating a focus on enhancing operational efficiency[209] - The company anticipates that certain facility upgrades will generate additional manufacturer incentive payments, which may positively impact future cash flows[209] - The number of locations acquired decreased from 145 in 2024 to 6 in 2025, indicating a strategic shift in acquisition strategy[209]