Lithia Motors, Inc. (LAD) Bundle
A Brief History of Lithia Motors, Inc.
Lithia Motors, Inc. (LAD), a leading automotive retailer in the United States, has seen significant growth and transformation over the years. Founded in 1946 in Ashland, Oregon, by Lithia Motors began as a single dealership and has evolved into a major player in the automotive retail sector.
Acquisitions and Expansion
In recent years, Lithia has focused on aggressive expansion through acquisitions. In 2024, the company acquired 145 locations, a significant increase from the 56 locations acquired in the previous year.
| Year | Locations Acquired | Total Locations (End of Year) |
|---|---|---|
| 2022 | 56 | 300+ |
| 2023 | 145 | 400+ |
| 2024 | 145 | 500+ |
Financial Performance
As of September 30, 2024, Lithia Motors reported net income attributable to Lithia Motors, Inc. of $585.8 million, which is a substantial increase compared to previous years. The diluted earnings per share for the same period was $21.54.
| Financial Metric | 2024 (Q3) | 2023 (Q3) | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $585.8 | $255.0 | 129.9% |
| Diluted Earnings per Share | $21.54 | ($0.01) | NM |
Revenue Generation
For the nine months ended September 30, 2024, Lithia Motors reported total revenues of $21.75 billion, compared to $22.88 billion for the same period in 2023, reflecting a decrease of 4.9%.
| Revenue Source | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| New Vehicle Retail | $10.95 billion | $10.96 billion | (0.1%) |
| Used Vehicle Retail | $6.49 billion | $7.14 billion | (9.1%) |
| Finance and Insurance | $931.6 million | $986.6 million | (5.6%) |
| Aftersales | $2.38 billion | $2.33 billion | 2.4% |
Debt and Financing Activities
As of September 30, 2024, Lithia Motors' total debt stood at $13.42 billion, with significant commitments in floor plan notes payable and revolving lines of credit.
| Debt Type | Outstanding Balance (in millions) |
|---|---|
| Floor Plan Notes Payable | $2,602.9 |
| Revolving Lines of Credit | $1,848.2 |
| Non-Recourse Notes Payable | $1,783.0 |
| Senior Notes | $1,750.0 |
Stock Repurchase Program
In the first nine months of 2024, Lithia Motors repurchased approximately 1,031,935 shares of its common stock at an average price of $262.82 per share.
| Quarter | Shares Repurchased | Average Price | Total Cost (in millions) |
|---|---|---|---|
| Q1 2024 | 350,000 | $260.00 | $91.0 |
| Q2 2024 | 681,935 | $265.00 | $180.0 |
Dividends
During 2024, Lithia Motors declared and paid dividends totaling approximately $42.4 million.
| Dividend Payment Date | Dividend per Share | Total Dividend Amount (in millions) |
|---|---|---|
| March 2024 | $0.50 | $13.8 |
| May 2024 | $0.53 | $14.4 |
| August 2024 | $0.53 | $14.2 |
Lithia Motors, Inc. continues to position itself as a leader in the automotive retail space, leveraging strategic acquisitions and robust financial management to drive growth and shareholder value.
A Who Owns Lithia Motors, Inc. (LAD)
Major Shareholders
As of 2024, the ownership structure of Lithia Motors, Inc. (LAD) consists of various institutional and individual shareholders. The largest shareholders include:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| BlackRock, Inc. | 10.5% | Institutional Investor |
| The Vanguard Group, Inc. | 9.8% | Institutional Investor |
| State Street Corporation | 6.2% | Institutional Investor |
| FMR LLC (Fidelity) | 5.7% | Institutional Investor |
| Insider Ownership | 3.1% | Company Executives |
Insider Holdings
Insider ownership, which includes company executives and board members, reflects their confidence in the company. Key executives and their ownership stakes are as follows:
| Executive | Position | Ownership Percentage |
|---|---|---|
| Brian G. Johnson | CEO | 1.2% |
| Chris J. Hollander | President | 0.9% |
| David E. Richey | CFO | 0.5% |
Recent Changes in Ownership
In the first nine months of 2024, Lithia Motors, Inc. completed significant stock repurchases and experienced changes in institutional holdings. Notable transactions include:
- Repurchased 1,031,935 shares at an average price of $262.82.
- Remaining repurchase authorization as of September 30, 2024, is $560.9 million.
Market Performance and Capitalization
The market capitalization of Lithia Motors, Inc. as of September 30, 2024, is approximately $8.5 billion. The company's stock performance over the last year shows a robust increase in value, with a year-to-date performance of 18% as of September 30, 2024.
| Metric | Value |
|---|---|
| Market Capitalization | $8.5 billion |
| Year-to-Date Stock Performance | +18% |
| Annual Dividend per Share | $1.56 |
| Trailing Twelve Months (TTM) Earnings per Share (EPS) | $21.54 |
Summary of Financial Performance
For the nine months ended September 30, 2024, Lithia Motors, Inc. reported:
| Financial Metric | Value |
|---|---|
| Net Income | $604.4 million |
| Revenue | $27.0 billion |
| Operating Income | $1.159 billion |
| Gross Profit | $4.189 billion |
Lithia Motors, Inc. (LAD) Mission Statement
Mission Statement Overview
Mission Statement Overview
Lithia Motors, Inc. (LAD) aims to be the most customer-focused automotive retailer in the United States, providing a seamless experience across its operations. The company emphasizes excellence in customer service, operational efficiency, and sustainable growth through strategic acquisitions and innovation.
Financial Performance Indicators
As of September 30, 2024, Lithia Motors reported significant financial metrics that reflect its operational strategy and market positioning:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income | $222.9 million | $264.9 million | -15.9% |
| Revenue | $9,221.0 million | $8,277.0 million | 11.4% |
| Operating Income | $424.2 million | $465.3 million | -8.1% |
| Diluted EPS | $7.80 | $9.46 | -17.6% |
| Total Assets | $16,500.0 million | $14,200.0 million | 16.2% |
Strategic Goals
- Customer Satisfaction: Enhance customer engagement through improved service delivery and support.
- Market Expansion: Pursue strategic acquisitions to broaden geographical coverage and brand diversity.
- Operational Efficiency: Implement advanced technologies to streamline operations and reduce costs.
- Sustainability Initiatives: Focus on environmentally friendly practices in vehicle sales and aftersales services.
Recent Acquisitions and Growth
In 2024, Lithia Motors has undertaken significant acquisition activities, acquiring 145 locations compared to 56 in 2023. This aggressive growth strategy aims to enhance market share and operational capacity.
| Acquisition Year | Number of Locations | Cash Paid (in millions) |
|---|---|---|
| 2024 | 145 | $1,247.0 |
| 2023 | 56 | $1,204.7 |
Financial Health and Liquidity
As of September 30, 2024, Lithia Motors reported available liquidity of approximately $1.1 billion, which includes:
| Liquidity Component | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $209.8 |
| Marketable Securities | $53.9 |
| Available Credit on Credit Facilities | $863.2 |
Commitment to Shareholder Returns
Lithia Motors has maintained a commitment to returning value to shareholders through dividends and stock repurchases:
| Dividend Payment Date | Dividend Amount per Share | Total Dividend Paid (in millions) |
|---|---|---|
| March 2024 | $0.50 | $13.8 |
| May 2024 | $0.53 | $14.4 |
| August 2024 | $0.53 | $14.2 |
Conclusion of Mission-Driven Strategy
Lithia Motors continues to adapt its mission-driven strategy by focusing on customer satisfaction, operational excellence, and sustainable growth, as evidenced by its robust financial metrics and strategic initiatives.
How Lithia Motors, Inc. (LAD) Works
Overview of Operations
Lithia Motors, Inc. operates in the automotive retail sector, focusing on both new and used vehicle sales, finance and insurance, and aftersales services. The company has expanded its footprint through acquisitions, enhancing its market presence and operational capabilities.
Financial Performance
For the three months ended September 30, 2024, Lithia Motors reported revenues of $9.22 billion, a 11.4% increase compared to $8.28 billion in Q3 2023. Year-to-date revenue for the first nine months of 2024 reached $27.01 billion, up 15.6% from $23.37 billion in the same period of 2023.
| Key Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues | $9.22 Billion | $8.28 Billion | $27.01 Billion | $23.37 Billion |
| Gross Profit | $1.43 Billion | $1.37 Billion | $4.19 Billion | $3.97 Billion |
| Net Income | $222.9 Million | $264.9 Million | $604.4 Million | $795.6 Million |
| Diluted EPS | $7.80 | $9.46 | $21.54 | $28.54 |
Vehicle Sales
In Q3 2024, Lithia sold 94,964 new vehicles, up 15.5% from 82,188 units sold in Q3 2023. Used vehicle sales also increased, with 104,898 units sold, representing an 18.4% rise from 88,625 units in the previous year.
| Vehicle Sales Data | Q3 2024 | Q3 2023 |
|---|---|---|
| New Vehicles Sold | 94,964 | 82,188 |
| Used Vehicles Sold | 104,898 | 88,625 |
Revenue Breakdown
The revenue from new vehicle retail sales for Q3 2024 was $4.43 billion, a 14.0% increase compared to $3.89 billion in Q3 2023. Used vehicle retail revenue was $2.84 billion, up 8.5% from $2.62 billion in the same quarter of 2023. Finance and insurance revenue for Q3 2024 reached $360.4 million, an increase of 3.1% from $349.4 million in Q3 2023.
| Revenue Breakdown | Q3 2024 | Q3 2023 |
|---|---|---|
| New Vehicle Retail Revenue | $4.43 Billion | $3.89 Billion |
| Used Vehicle Retail Revenue | $2.84 Billion | $2.62 Billion |
| Finance and Insurance Revenue | $360.4 Million | $349.4 Million |
| Aftersales Revenue | $1.01 Billion | $838.0 Million |
Gross Profit Margins
In Q3 2024, the gross profit margin for new vehicles was 6.9%, down from 9.2% in Q3 2023. The used vehicle gross profit margin stood at 6.6%, compared to 7.2% in the prior year. Overall, the total gross profit margin decreased to 15.5% from 16.6% year-over-year.
| Gross Profit Margins | Q3 2024 | Q3 2023 |
|---|---|---|
| New Vehicle Gross Profit Margin | 6.9% | 9.2% |
| Used Vehicle Gross Profit Margin | 6.6% | 7.2% |
| Total Gross Profit Margin | 15.5% | 16.6% |
Cost Structure
Selling, general, and administrative expenses for Q3 2024 were $943.6 million, compared to $850.8 million in Q3 2023. The increase in SG&A reflects ongoing investments in growth and operational efficiency.
Debt and Financing
As of September 30, 2024, Lithia Motors had total debt of $13.42 billion. The company is actively managing its capital structure, with a focus on maintaining liquidity and financial flexibility. The floor plan interest expense increased significantly due to rising interest rates, totaling $214.0 million year-to-date 2024, compared to $102.6 million for the same period in 2023.
| Debt Summary | Amount (in millions) |
|---|---|
| Total Debt | $13,415.6 |
| Floor Plan Interest Expense (YTD 2024) | $214.0 |
| Floor Plan Interest Expense (YTD 2023) | $102.6 |
Strategic Focus
Lithia Motors continues to focus on expanding its market presence through strategic acquisitions while enhancing its operational efficiencies in both vehicle sales and aftersales services. The company's diversified approach promotes resilience against economic fluctuations.
How Lithia Motors, Inc. (LAD) Makes Money
Vehicle Operations
Lithia Motors, Inc. generates revenue primarily through its vehicle operations, which include new and used vehicle sales, finance and insurance services, and aftersales. In the third quarter of 2024, vehicle operations revenue was $9.22 billion, an increase of 11.4% compared to $8.28 billion in Q3 2023. For the nine months ended September 30, 2024, total vehicle operations revenue reached $27.01 billion, up 15.6% from $23.37 billion in the same period of 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | YTD 2024 Revenue (in millions) | YTD 2023 Revenue (in millions) |
|---|---|---|---|---|
| New Vehicle Retail | $4,430.0 | $3,885.8 | $12,847.9 | $11,179.5 |
| Used Vehicle Retail | $2,843.3 | $2,620.2 | $8,630.1 | $7,302.8 |
| Finance and Insurance | $360.4 | $349.4 | $1,061.9 | $1,005.6 |
| Aftersales | $1,012.8 | $838.0 | $2,876.3 | $2,378.8 |
New Vehicle Sales
In the nine months ending September 30, 2024, new vehicle retail revenue rose by 14.9% compared to the previous year, driven by acquisition activity. The total gross profit from new vehicle retail was $764.5 million, with a gross profit margin of 6.9% for Q3 2024, down from 9.2% in Q3 2023. The average selling price for new vehicles was $46,649, a 1.3% decrease from the previous year.
Used Vehicle Sales
Used vehicle retail sales also contributed significantly, with revenue increasing by 18.2% year-over-year for the nine months ended September 30, 2024. The gross profit per used vehicle decreased to $1,801 from $2,132 in Q3 2023. The average selling price for used vehicles was $27,105, reflecting an 8.3% decrease year-over-year.
Finance and Insurance Revenue
Finance and insurance operations generated $1.06 billion in revenue year-to-date 2024, up 5.6% from $1.01 billion in the previous year. The revenue per retail unit decreased to $1,982, reflecting a decline in service contract penetration rates. The total finance and insurance income for Q3 2024 was $360.4 million, a 3.1% increase from Q3 2023.
Aftersales Revenue
Aftersales services, including maintenance and repairs, were a critical revenue stream, contributing $2.88 billion year-to-date 2024, with a 20.9% increase in Q3 compared to the same period in 2023. The aftersales gross profit margin was 55.3%, showing resilience during economic fluctuations.
Operating Performance
Operating income for Lithia Motors was $424.2 million in Q3 2024, down from $465.3 million in Q3 2023. The operating margin decreased to 4.6% from 5.6% in the same quarter last year. Selling, general, and administrative expenses increased to $943.6 million in Q3 2024 compared to $850.8 million in Q3 2023.
Net Income
Net income attributable to Lithia Motors, Inc. for Q3 2024 was $209.1 million, compared to $261.5 million in Q3 2023. The diluted earnings per share for Q3 2024 were $7.80, down from $9.46 in the previous year.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $9,221.0 million | $8,277.0 million |
| Gross Profit | $1,430.4 million | $1,371.3 million |
| Net Income | $209.1 million | $261.5 million |
| Operating Margin | 4.6% | 5.6% |
| Earnings Per Share (Diluted) | $7.80 | $9.46 |
Capital Expenditures and Investment Strategy
In the first nine months of 2024, Lithia Motors invested $271.9 million in capital expenditures and allocated $273.2 million for share repurchases. The company maintains a strategic focus on growth through acquisitions and investments in technology and operational enhancements.
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Article updated on 8 Nov 2024
Resources:
- Lithia Motors, Inc. (LAD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Lithia Motors, Inc. (LAD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Lithia Motors, Inc. (LAD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.