Lithia Motors(LAD - Free Report) reported second-quarter 2024 adjusted earnings per share of $7.87, which declined from the prior-year quarter’s $10.91 but surpassed the Zacks Consensus Estimate of $7.09. Higher-than-expected revenues from used vehicle retail, service, body and parts, and fleet and others segments led to the beat. The auto retailer clocked revenues of $9.23 billion, up 14% year over year, and surpassed the Zacks Consensus Estimate by 0.31%.
Lithia Motors, Inc. Price, Consensus and EPS Surprise
Lithia Motors, Inc. price-consensus-eps-surprise-chart | Lithia Motors, Inc. Quote
Segmental Performance
New vehicle retail revenues increased 9.7% year over year to $4.4 billion but missed our estimate of $4.5 billion due to a lower-than-expected number of units sold and average selling price (ASP). New vehicle units sold rose 10.7% from the prior-year quarter’s levels to 92,508 units, missing our estimate of 94,333 units. The ASP of new-vehicle retail decreased to $47,603 from $48,058 reported in the prior-year quarter. Our estimate was for $47,893. The gross margin in this segment contracted 230 basis points (bps) to 7.3% amid high cost of sales, which flared up 12.6% year over year to $4.1 billion.
Used-vehicle retail revenues rose 21.6% year over year to $3 billion and beat our estimate of $2.7 billion. Higher-than-anticipated number of units sold resulted in the outperformance. The used-vehicle retail units sold rose 35.6% from the year-ago quarter to 109,249 units, outpacing our expectation of 92,306 units. The ASP of used-vehicle retail was $27,332, dropping 10.3% year over year. Our estimate was of $29,623. The gross margin in the segment declined 220 bps to 6.5% amid high cost of sales, which rose 24.4% year over year.
Revenues from used-vehicle wholesale fell 28.3% to $289.5 million and were significantly below our estimate of $458.8 million. Revenues from service, body and parts were up 18.2% from the prior-year period’s levels to $950.7 million, outpacing our estimate of $933 million. The company’s finance and insurance revenues rose 6.8% to $360.9 million and fell shy of our estimate of $361.2 million. Revenues from fleet and others were $241 million, which jumped 152.4% year over year and handily exceeded our expectation of $104.7 million.
Same-store new-vehicle revenues decreased 3.7% year over year and same-store used-vehicle retail sales declined 6.8%. Same-store revenues from finance and insurance fell 5.7%, while that of the service, body and parts unit contracted 1.4%.
Financial Tidbits
Cost of sales jumped 16.1% year over year in second-quarter 2024. SG&A expenses were $975.2 million, up 15.8% from $842.2 million reported in the year-ago quarter. Adjusted SG&A, as a percentage of gross profit, was 67.9%. Pretax and net profit margins declined from the year-ago levels.
The company declared a quarterly dividend of 53 cents, to be paid on Aug 23, 2024, to shareholders of record as of Aug 9, 2024. So far, in 2024, LAD has repurchased nearly 793,000 shares at an average price of $256. Currently, Lithia has approximately $613.8 million shares remaining under its buyback authorization.
Lithia had cash/cash equivalents/restricted cash of $674.7 million as of Jun 30, 2024, down from $941.4 million as of Dec 31, 2023. Long-term debt was $6 billion as of Jun 30, 2024, up from $5.5 billion as of Dec 31, 2023.
LAD currently carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Group 1 Automotive(GPI - Free Report) reported second-quarter 2024 earnings of $9.80 per share, beating the Zacks Consensus Estimate of $9.43 per share. This compares to earnings of $11.73 per share a year ago. GPI posted revenues of $4.7 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 1.50%. This compares to the year-ago revenues of $4.56 billion.
AutoNation(AN - Free Report) reported second-quarter 2024 earnings of $3.99 per share, missing the Zacks Consensus Estimate of $4.31 per share. This compares to earnings of $6.29 per share a year ago. AN posted revenues of $6.48 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 4.09%. This compares to year-ago revenues of $6.89 billion.
O'Reilly Automotive(ORLY - Free Report) came out with quarterly earnings of $10.55 per share, missing the Zacks Consensus Estimate of $10.95 per share. This compares to earnings of $10.22 per share a year ago. ORLY posted revenues of $4.27 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 1.19%. This compares to year-ago revenues of $4.07 billion.
