MEDFORD, Ore. -

With used-vehicle sales up by double digits, Lithia Motors stressed the importance of trade-ins to dealers as the company highlighted its second-quarter results.

Used-vehicle retail same-store sales increased 20 percent, and Bryan DeBoer, president and chief executive officer, highlighted that the company is focused on acquiring more trade-ins for its stores in an effort to continue this growth. 

“We are concentrating on capturing as many trade-ins as possible. The new-vehicle dealers remains on top of the food chain when it comes to procuring used-vehicle inventory. This is a key competitive advantage as we maximize our used-vehicle retail opportunities,” said DeBoer in a conference call Wednesday highlighting the company’s second-quarter financial results.

The company also touched on sales rates per store for used retail sales, as well as its efforts to meet its current monthly goal.

For the second quarter — a periond in which  the company sold approximately 11,500 retail used vehicles, resulting in a used/new ratio of 0.8-to-1 — an average of 47 used vehicles per store made it of the lots each month.

This number was up from 39 vehicles per store for the same period of 2011. And though this quarter marked significant growth year-over-year, DeBoer noted the company is striving towards an even higher number.

“Our current goal is to sell an average of 60 used vehicles per store,” he explained in the conference call.

“We focus our store leaders on a significant opportunity to retail more core products or used vehicles from three to seven years old. Our performance in this segment has been improving, but it still remains the best avenue to increase our used vehicles per store to 60 units per month,” DeBoer continued.

The executive also mentioned that the company’s “value autos” — or vehicles with over 80,000 miles — performed well, too.

This segment grew 30 percent year-over-year with a gross margin of 21 percent.

“Although these vehicles have lower selling prices, overall, the average selling price on our used vehicles increased by 2 percent due to underlying market strength,” DeBoer further explained.

And as the company looks forward to the rest of 2012, it predicts used sales will continue to see double-digit growth.

In fact, it expected used same-store sales to increase by 16 percent for the full year, with used-vehicle gross margin ranging from 14.7 percent to 14.9 percent.

Other Contributors to Q2 Growth

The company reported 2012 second-quarter adjusted income from continuing operations of $19.9 million, or $0.76 per diluted share, compared to a 2011 second-quarter adjusted income from continuing operations of $14.4 million, or $0.54 per diluted share. So, what contributed to the jump?

Besides a double-digit spike in used sales, the company reported new-vehicle same-store sales increased 34 percent year-over-year.

Moreover, the service, body and parts same store sales increased 7 percent, the company reported.

Commenting on the company growth, DeBoer noted, "We remain focused on improving our operations and increasing our market share.

"I’m proud of the results our team delivered in the second quarter. With that said, we still have opportunities in all facets of our business and our leaders continue to identify areas where performance can improve. Additionally, in many of our Western markets, the new-vehicle sales recovery has lagged national levels. This factor will serve as a future catalyst for growth,” he continued. 

Looking forward, the company expects to see growth in the aforementioned areas of the business, as well.

For the full year, it predicts new-vehicle same-store sales to increase by 22 percent, with new-vehicle gross margin ranging from 7.3 percent to 7.6 percent. 

Wrapping up its commentary, the company noted it predicts total revenues for 2012 in the range of $3.2 to $3.3 billion.