Lithia Motors(US:LAD) ZACKS·2026-02-12 15:31Core Insights - Lithia Motors (LAD) reported fourth-quarter 2025 adjusted earnings per share of $6.74, a decrease from $7.79 in the prior-year quarter, missing the Zacks Consensus Estimate of $8.09. Revenues were flat year over year at $9.2 billion, also missing the estimate of $9.53 billion [1][10]. Segmental Performance - New vehicle revenues declined by 5.7% year over year to $4.63 billion, missing the estimate of $4.71 billion, with new vehicle units sold down 8.1% to 97,424 units, although this was above the estimate of 95,435 units [2]. - The average selling price (ASP) of new vehicles increased to $48,239 from $47,478 in the prior-year quarter but fell short of the estimate of $49,401. The gross margin in this segment contracted by 70 basis points to 5.9%, while the cost of sales decreased by 5% year over year to $4.36 billion [3]. - Used vehicle revenues rose by 6.7% year over year to $3.2 billion, surpassing the estimate of $2.68 billion, driven by higher unit sales and ASP. Used vehicle retail units sold increased by 4.8% to 99,905 units, exceeding the expectation of 94,261 units. The ASP for used vehicles was $28,533, up 3.1% year over year, also beating the estimate of $28,413. The gross margin in this segment decreased by 60 basis points to 4.7% [4]. - Finance and insurance revenues increased by 0.3% to $356.9 million, beating the estimate of $347 million. Aftersales revenues totaled $1.04 billion, up 11.4% year over year, surpassing the estimate of $972.1 million. Same-store new vehicle revenues fell by 6.6%, while same-store used vehicle sales rose by 6.1% [5]. Financial Overview - Cost of sales increased by 0.3% year over year. SG&A expenses amounted to $979.3 million, up 8.6% year over year. Adjusted SG&A as a percentage of gross profit rose to 71.4% from 66.3% in the prior-year quarter. Both pretax and net profit margins declined from the previous year [6]. - The company announced a dividend of 55 cents to be paid on March 20, 2026, to shareholders of record as of March 6, 2026. In the fourth quarter of 2025, Lithia repurchased nearly 917,427 shares at an average price of $314, with approximately $621.6 million remaining under its buyback authorization [7]. - As of December 31, 2025, Lithia had cash and cash equivalents of $341.8 million, down from $402.2 million a year earlier. Long-term debt increased to $7.27 billion from $6.12 billion [8]. Market Position - Lithia currently holds a Zacks Rank 3 (Hold). Other better-ranked stocks in the auto sector include Ford Motor (F), Modine Manufacturing (MOD), and PHINIA Inc. (PHIN), each with a Zacks Rank 1 (Strong Buy) [9].