Lithia Motors(US:LAD) ZACKSยท2025-10-23 15:46Core Insights - Lithia Motors (LAD) reported third-quarter 2025 adjusted earnings per share of $9.50, an increase from $8.21 in the prior-year quarter, exceeding the Zacks Consensus Estimate of $8.53. Revenues reached $9.67 billion, a 5% year-over-year increase, also surpassing the Zacks Consensus Estimate of $9.61 billion [1][10]. Segmental Performance - New vehicle retail revenues rose 4.5% year over year to $4.63 billion, exceeding the estimate of $4.5 billion, driven by higher unit sales and average selling price (ASP). New vehicle units sold increased by 1.8% to 96,639 units, surpassing the estimate of 95,276 units. The ASP for new vehicles increased to $47,913 from $46,649 in the prior-year quarter, above the estimate of $47,213. However, the gross margin in this segment contracted by 90 basis points to 6% due to a 5.6% rise in cost of sales to $4.35 billion [2]. - Used vehicle retail revenues increased by 8.9% year over year to $3.1 billion, surpassing the estimate of $3.08 billion, attributed to higher-than-expected ASP. Used vehicle retail units sold rose by 4% to 109,097 units, though below the expectation of 114,047 units. The ASP for used vehicles was $28,381, up 4.7% year over year, exceeding the estimate of $27,016. The gross margin in this segment decreased by 40 basis points to 6.2% [3]. - Revenues from used vehicle wholesale fell by 6.1% to $367 million, missing the estimate of $455.9 million. Finance and insurance revenues rose by 5% to $378.6 million but fell short of the estimate of $384.7 million. Aftersales revenues were $1.04 billion, a 2.4% year-over-year increase, but missed the estimate of $1.07 billion. Revenues from fleet and others contracted by 9.3% year over year to $166.5 million, although it exceeded the expectation of $163.5 million [4]. - Same-store new vehicle revenues increased by 5.5% year over year, while same-store used vehicle retail sales rose by 11.8%. Same-store revenues from finance and insurance rose by 5.7%, and aftersales unit revenues increased by 3.9% [5]. Financial Overview - Cost of sales increased by 5.4% year over year in the third quarter of 2025. SG&A expenses were $998 million, up 5.8% year over year. Adjusted SG&A as a percentage of gross profit was 67.9%, up from 66% in the prior-year quarter. Both pretax and net profit margins improved compared to the previous year [6]. - The company announced a dividend of 55 cents to be paid on November 21, 2025, to shareholders of record as of November 7, 2025. In the third quarter of 2025, Lithia repurchased nearly 1,312,000 shares at an average price of $312, with approximately $889.3 million remaining under its buyback authorization [7]. - As of September 30, 2025, Lithia had cash and cash equivalents of $417.1 million, up from $402.2 million as of December 31, 2024. Long-term debt increased to $6.97 billion from $6.12 billion as of December 31, 2024 [8].