Fueled in part by its used-vehicle department performance, Lithia Motors reported the highest first quarter revenue and earnings per share in company history.
To get to those achievements, Lithia said on Wednesday that its used-vehicle retail same store sales increased 6 percent as the dealer group turned a total of 30,783 units during Q1, representing a year-over-year lift of 3,352 units.
That used volume gain helped to overcome deterioration in gross profit per unit. Lithia reported that its gross on used retail sales dipped by $109 year-over-year to $2,234.
Also helping the company cause was Q1 F&I gross profit ticking up $17 compared to the same time period a year ago to land at $1,307.
However, it’s the top-line metrics that prompted Lithia leadership to cheer.
The company said its Q1 unadjusted net income per diluted share increased 30 percent year-over-year to $2.01 from $1.55. Adjusted net income per diluted share increased 15 percent to $1.78 from $1.55.
Lithia’s Q1 unadjusted net income increased 26 percent to $50.7 million from $40.3 million. Adjusted net income increased 12 percent to $45.0 million, up from $40.4 million.
The company went on to highlight its Q1 revenue jumped 13 percent to $2.2 billion from $2.0 billion.
A few other year-over-year highlights included:
—Total same store sales increased 3 percent
—Service, body and parts same store sales increased 8 percent
—SG&A expense as a percentage of gross profit was 71.1 percent
“Through a disciplined acquisition strategy and strong operational execution, we’re pleased to report our 26th consecutive quarter of record earnings per share,” Lithia president and chief executive officer Bryan DeBoer said. “We grew revenue 13 percent and adjusted earnings 12 percent over last year and a significant number of stores still have ample opportunity to improve.
“Since 2010, we have grown our revenue four-fold and our EPS seven-fold, all while currently maintaining a leverage ratio of less than two,” DeBoer continued. “The ability to flex our balance sheet coupled with our free cash flow provides capacity to continue acquisitions at a similar or accelerated cadence in 2017 and beyond.”
Lithia’s expectations are for its used department to maintain the pace it set during the first quarter.
The company’s guidance projects used-vehicle same-store sales increasing 5.5 percent and used-vehicle gross margin to come in at 11.5 percent to 11.7 percent.
Also of note on the used side, Lithia wholesaled 10,840 units during the first quarter, up by 1,327 units or 13.9 percent year-over-year. The average selling price for those wholesaled units softened by $252 to settle at $6,596.