The challenging winter weather experienced in much of the dealership footprint held by Lithia Motors left its mark on the first-quarter performance the dealer group reported on Wednesday.
Despite the Northeast getting especially pounded by snow and other elements preventing potential buyers coming to showrooms, Lithia managed a 4.2-percent improvement in used-vehicle retail sales during Q1, turning 31,677 units. That’s up from 30,404 used vehicles retailed in Q1 of 2017.
Lithia’s fortunes moving new metal were not so fruitful, as the dealer group watched new-model sales soften by a similar pace. Lithia retailed 33,886 new vehicles in Q1; a figure 4.3 percent lower than the 35,415 turned in the year-ago quarter.
“Vehicle sales improved sequentially each month of the quarter,” Lithia president and chief executive officer Bryan DeBoer said in a news release. “January and February were softer than expected and we experienced more severe weather than typical in the Northeast throughout the quarter.
“Despite the slower start, we finished strong with a record March, generating over 70 percent of our earnings,” DeBoer continued. “We expect this momentum to continue throughout 2018 and beyond.
“While fixed operations remains strong, sales shortfalls in January and February created an urgent call to action for our leaders to more aggressively pursue the over $200 million in unrealized earnings potential available to us,” he went on to say.
As DeBoer referenced, Lithia reported that its service, body and parts same-store sales increased 3 percent.
And whether group stores retailed a used or new vehicle, Lithia generated an extra 5.4 percent per unit in gross within the F&I department, collecting $1,380 with each vehicle rolling over the curb with financed packages included.
All told, company-wide Q1 revenue increased 19 percent to $2.7 billion. As a result, Lithia tabulated that its Q1 net income per diluted share came in at $2.07, a 3-percent increase over $2.01 per diluted share reported in the first quarter of 2017, and a 16-percent increase compared to adjusted net income of $1.78 per diluted share in the same period of 2017.
The company said its Q1 net income was $52 million, a 3-percent increase over $51 million reported in the first quarter of 2017, and a 16-percent increase compared to adjusted net income of $45 million for the same period of 2017.
Lithia also reaffirmed its outlook of full year revenues of $12.0 to $12.5 billion and earnings per share of $10.60.
The group’s board of directors approved a 7-percent increase in Lithia’s dividend to $0.29 per share related to Q1 financial results. Lithia expects to pay the dividend on May 25 to shareholders of record on May 11.
Year to date, Lithia has repurchased 90,000 shares at a weighted average price of $98.02 per share. Under its existing $250 million share repurchase authorization, approximately $154 million remains available.
Editor’s note: Watch for an upcoming report that will contain more insights from Lithia executives about the company’s Q1 performance and future expectations.