Lithia posts record revenue, earnings per share in Q1

Net income surged at Lithia Motors Inc. in the first quarter as the dealership group reported record first-quarter revenue and earnings per share.

Lithia said Wednesday that it posted net income of $156 million, compared with $46 million in first-quarter 2020. Revenue for the quarter jumped 54 percent to $4.3 billion, a first-quarter record high, up from $2.8 billion in the year-earlier period.

Earnings per share nearly tripled to $5.81 from $1.97 in first-quarter 2020.

The Medford, Ore., retailer improved across all of its business lines, with same-store new, used and finance-and-insurance revenue up nearly 30 percent. Service, body and parts business also rose slightly, Lithia CEO Bryan DeBoer said in a statement.

"The pandemic impacted our first-quarter 2020 results only for the last two weeks in March, and our team's performance this quarter demonstrates our ability to be the leader in consolidating this highly fragmented industry," DeBoer said. "As we build on the broadest nationwide network, we continue to expand the reach of our people, inventory and locations through our national e-commerce home solution Driveway."

Driveway, Lithia's omnichannel vehicle sales, acquisition and service scheduling platform, launched last year. Omnichannel retailing refers to technology and processes aimed at providing a seamless buying experience to consumers whether they shop online, in-store or both.

The platform is a key component of Lithia's five-year plan unveiled last July to grow revenue to $50 billion and earnings per share to $50 by 2025.

Adjusted earnings of $158 million exclude a $0.08 per diluted share net non-core charge related to acquisition expenses, net loss on sale of stores, insurance reserves and a non-cash unrealized investment loss, the statement also said.

Lithia opened an Infiniti dealership in Los Angeles during the first quarter. It also completed three acquisitions — the purchase of Fink Auto Group in Florida, two Florida dealerships from Fields Auto Group and Avondale Nissan in Phoenix.

This month, Lithia purchased the Suburban Collection of southeast Michigan in one of the largest-ever dealership acquisitions.

The acquisitions helped build out Lithia's footprint in previously untapped markets and are expected to generate $3.1 billion in annualized revenue for the public group. The deals also helped Lithia vault over Penske Automotive Group Inc. to become the nation's second-largest dealership group in the country in terms of new-vehicle sales, and the largest group in dealership count.

"With a record $6.5 billion of expected annualized revenue acquired in the first nine months of our five-year plan, we are well ahead of schedule and are only getting started," said DeBoer. "With an acquisition pipeline more active than we have ever seen, we are well positioned to continue to aggressively pursue our goal of achieving $50 billion in revenue and $50 of earnings per share."

Lithia shares rose 2.5 percent to close at $384.15.

Records: All-time earnings per share of $5.81 and first-quarter revenue of $4.3 billion.

Sales: New-vehicle sales surged 50 percent to 53,864. Used-vehicle sales rose 38 percent to 59,027.

Same store sales: Same-store new-vehicle sales surged 22 percent to 42,816, exceeding the 12 percent rise for all U.S. new light-vehicle sales in the first quarter, according to the Automotive News Research & Data Center. Same-store used-vehicle sales rose 19 percent to 49,764.

Lithia ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 171,168 new vehicles in 2020.