Executive Summary

Q1 2025 delivered record revenue of $9.18B (+7% YoY) and GAAP diluted EPS of $7.94 (+35% YoY); adjusted diluted EPS was $7.66 (+25% YoY) .
Versus S&P Global consensus, revenue modestly missed by ~$0.11B (−1.1%) and Primary EPS missed by ~$0.21 (−2.7%); GAAP EPS would have been a small beat, but S&P tracks “Primary EPS” as normalized/adjusted for LAD [Values retrieved from S&P Global].
Operating execution improved: adjusted SG&A/GP fell 120 bps YoY to 68.2%; days’ supply reduced to 43 (new) and 45 (used); DFC originations reached $623M with NIM at 4.6% .
Capital returns accelerated: dividend increased 4% to $0.55 and ~403K shares were repurchased (1.7% of shares) at a $326 average; authorization remaining ~$669M .
Call tone constructive: management highlighted tariff resilience, SG&A trajectory toward mid-50s over time, and balanced deployment (near-term buybacks, ~$2B acquired revs in 2025) .

What Went Well and What Went Wrong

What Went Well

SG&A discipline and cost control: adjusted SG&A/GP fell to 68.2% (−120 bps YoY) and same-store to ~67% (−150 bps YoY), with a path toward 65.5%–67.5% in 2025 .
Financing operations profitability and NIM expansion: DFC income of $12.5M, originations $623M, NIM 4.6% (up 117 bps YoY; +7 bps QoQ), portfolio ~$4.06B average managed receivables .
Aftersales strength: same-store aftersales gross profit +7.5% YoY; margin up to 57.8%; warranty gross profit +19.7% YoY; management: “we did have a pretty good lift this quarter in terms of labor… over 57% margin” .

Quotes:

CEO: “Our strong first quarter performance reflects the power of our integrated ecosystem… we achieved profitable growth year over year in each month this quarter” .
CFO: “We’re on track to achieve same-store SG&A in the range of 65.5% to 67.5%” .
CEO on tariffs: “We have about 45% of our inventory that’s not impacted… the most diversified and the least impacted” .

What Went Wrong

Revenue and Primary EPS slightly below S&P consensus (normalized EPS basis); revenue $9.18B vs $9.28B consensus and Primary EPS $7.66 vs $7.87 consensus [Values retrieved from S&P Global].
New vehicle GPUs normalized YoY: new GPU $3,016 (−12.5% YoY); gross margin fell to 6.3% (−110 bps YoY) as industry mix normalized .
Used wholesale revenue and GPUs weaker: wholesale revenue −2% YoY; total vehicle GPU −4.2% YoY to $4,164; same-store total vehicle GPU −3.2% YoY to $4,301 .

Analyst concerns:

SG&A seasonality vs Q4: sequential pickup exceeded typical seasonality; clarification provided (seasonality and Pinewood fair value in Other income) .
Macrotariff uncertainties and potential demand lumpiness later in the year, though management expects resilience via affordability mix and OEM pricing actions .

Financial Results

Headline vs Estimates (Q1 2025)

Metric	Consensus (S&P Global)*	Actual	Surprise ($)	Surprise (%)
Revenue ($USD Billions)	$9.28*	$9.18	−$0.11*	−1.1%*
Primary EPS ($USD)	$7.87*	$7.66*	−$0.21*	−2.7%*

Note: S&P Global’s Primary EPS for LAD aligns to normalized/adjusted EPS; LAD’s GAAP diluted EPS was $7.94 .
*Values retrieved from S&P Global.

Quarterly Trend (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$9.22	$9.22	$9.18
GAAP Diluted EPS ($USD)	$7.80	$8.12	$7.94
Adjusted Diluted EPS ($USD)	$8.21	$7.79	$7.66
Gross Profit Margin (%)	15.5	14.9	15.4
SG&A as % of Gross Profit (Adjusted)	66.0	66.3	68.2
Operating Profit as % of Revenue (Adjusted)	4.6	4.4	4.3
Net Profit Margin (Adjusted, %)	2.4	2.3	2.2

YoY Comparison (Q1 2025 vs Q1 2024)

Metric	Q1 2024	Q1 2025
Revenue ($USD Billions)	$8.56	$9.18
GAAP Diluted EPS ($USD)	$5.89	$7.94
Adjusted Diluted EPS ($USD)	$6.11	$7.66
Net Income ($USD Millions)	$165.0	$211.2
Gross Profit ($USD Millions)	$1,335.2	$1,410.4
Gross Profit Margin (%)	15.6	15.4

Segment Breakdown (Q1 2025)

Revenue Category ($USD Millions)	Q1 2024	Q1 2025	YoY Change
New vehicle retail	$4,014.1	$4,380.2	+9.1%
Used vehicle retail	$2,800.8	$2,919.1	+4.2%
Used vehicle wholesale	$337.7	$331.0	−2.0%
Finance and insurance	$340.6	$364.3	+7.0%
Aftersales	$912.8	$979.1	+7.3%
Fleet and other	$155.8	$204.6	+31.3%
Total revenues	$8,561.8	$9,178.3	+7.2%

KPIs and Mix (Q1 2025)

KPI	Q1 2024	Q1 2025
New retail units (units)	85,683	91,990
Used retail units (units)	102,436	107,326
New ASP ($)	$46,848	$47,616
Used ASP ($)	$27,342	$27,198
New GPU ($)	$3,447	$3,016
Used GPU ($)	$1,783	$1,769
F&I per unit ($)	$1,811	$1,828
Aftersales Gross Margin (%)	55.0	57.3
Total vehicle GPU ($)	$4,346	$4,164
Inventory days’ supply (new/used)	44 / 44	43 / 45
DFC originations ($USD Millions)	$77.3 interest & fee income baseline (NIM context)	$623 originations; NIM 4.6%
Net debt / TTM Adjusted EBITDA (x)	2.31x	2.47x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q1 2025	$0.53 (Q4 2024)	$0.55	Raised
Share repurchase authorization remaining	As of Q4 2024 call	~$454.3M	~$669.2M	Increased (authorization/refresh)
Same-store SG&A as % of GP	FY 2025	N/A	65.5%–67.5%	Set range
Capital allocation (buybacks)	Near-term	N/A	Allocate 30%–40% of FCF to buybacks	Established
M&A acquired revenues	CY 2025	$2–$4B multi-year target	“Closer to $2B this year”	Lowered near-term
DFC penetration target	Long-term	N/A	20% of units financed through DFC (path from ~13.7% exiting Q1)	Affirmed target
New vehicle GPU expectations (internal)	Multi-year	N/A	$2,600–$2,800 target (mix/luxury, Southeast exposure)	Established
Net leverage target	Long-term	2–3x	2–3x (Q1 ended at ~2.5x)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/macro	Aftersales +6.3% same-store; mix normalization pressures GPUs	Record rev; first profitable year for financing ops; SAAR elevated	45% inventory not impacted; OEMs stabilizing pricing; mild lumpiness possible in fall	Stabilizing; diversified mix mitigates risk
SG&A execution	Adj. SG&A/GP 66.0%	Adj. SG&A/GP 66.3%	68.2% (consolidated) with path to 65.5–67.5% same-store; mid-50s long-term	Structural downtrend over time
DFC (financing ops)	Continued profitability; ABS priced; NIM rising	First profitable year; NIM 4.7%; originations $501M	Income $12.5M; originations $623M; NIM 4.6%; ABS market choppy but warehouse capacity ample	Scaling; resilient funding
Inventory & DS supply	DS supply high (68/68)	DS improved to 59/53	DS down to 43/45; floor plan expense −6% YoY	Improving; cost tailwinds
Used/value autos	Used GPUs down; same-store used declines	Used retail up; GPUs normalized	Value auto sales +38.8% YoY; used GPU stable; procurement focus	Momentum rebuilding
Regional trends	Western regions weaker; Southeast stronger	N/A	NW/SW now strongest GP; Southeast/South Central still higher net profitability due to fee structure	Mix shifting; profitability spread persists
Technology/Pinewood	N/A	N/A	Pinewood FV change −$0.27 EPS; future ERP savings $30–$40M	Transition will lower costs
Leasing/incentives	N/A	N/A	Leasing rising toward ~20%; incentives still low; OEMs can absorb cost increases	Beneficial for affordability

Management Commentary

Strategy and execution: “We are single-minded in our goals, unlocking the profitability of the life cycle by creating customer loyalty… delivering on our core strength, execution” .
SG&A trajectory: “Drop about 7 bps out of the model each and every month starting in the second half of this year… pathway to mid-50s SG&A range” .
Tariff resilience: “We have about 45% of our inventory that’s not impacted… the most diversified and the least impacted” .
Capital allocation: “Repurchased 1.7% of our outstanding shares… will focus our share buybacks in the near term given market pricing dynamics” .
DFC scaling: “Each loan originated by DFC contributes up to 3x more profitability than traditional indirect lending” .

Q&A Highlights

Tariffs and demand: OEM pricing clarity through at least May; LAD expects resilience via affordability mix across brands and channels .
SG&A path: Seasonal step-up Q1; long-term SG&A reductions via personnel productivity, vendor consolidation (Pinewood), and interest cost efficiencies .
DFC funding: Q1 ABS oversubscribed; term market choppy; warehouse capacity ample to bridge timing .
Used/value autos: Strong value auto momentum; strategy to retain older/off-brand vehicles to capture high-turn, high-ROIC sales .
Regional profitability: Southeast/South Central roughly double net profit/revenue vs SW/NW due to regulatory/fee structures; recent GP strength in NW/SW .

Estimates Context

S&P Global consensus (Primary EPS, normalized) and revenue slightly missed; GAAP EPS ($7.94) would imply a small beat vs EPS consensus ($7.87), but S&P’s Primary EPS aligns to adjusted EPS (actual $7.66). Street likely to revise models toward higher GAAP EPS, with normalized EPS sensitive to non-core items (Pinewood FV, disposals, insurance reserves) [Values retrieved from S&P Global] .

Where estimates may adjust:

Normalize EPS trajectory: potential upward adjustments to GAAP EPS durability; normalized EPS may be trimmed modestly near-term to reflect non-core impacts and GPU normalization [Values retrieved from S&P Global] .
DFC contributions: rising NIM and originations support modest upward adjustments to financing ops profitability embedded in models .
SG&A: improved execution and vendor/interest savings can underpin medium-term margin revisions .

Key Takeaways for Investors

Execution over optics: despite slight consensus misses on normalized EPS and revenue, the operational cadence (days’ supply, SG&A, aftersales, DFC) is improving and more durable .
Dividend and buybacks as support: 4% dividend hike and sizable buybacks (1.7% in Q1) are tangible capital return catalysts; authorization increased to ~$669M .
Tariff hedge via mix: 45% of inventory insulated; affordability-first product strategy (value autos, leasing) and OEM actions reduce downside risk from tariffs .
Financing ops as a growth vector: NIM expansion and ABS access point to rising adjacency profitability; longer-term DFC penetration to 20% can structurally lift EPS .
SG&A structural path: pathway to mid-50s SG&A/GP via productivity, Pinewood, vendor consolidation, and interest cost reduction—key medium-term margin driver .
Regional profitability matters: exposure to higher net profit regions and fee structures is a persistent advantage; watch the improving GP in NW/SW .
Near-term deployment: M&A pacing to ~$2B this year; buybacks prioritized given relative valuation, providing EPS support while macro normalizes .

Citations:

Q1 2025 8-K earnings release, financials, KPIs, dividend/buybacks .
Q1 2025 earnings call transcript (strategy, SG&A, tariffs, DFC, regional trends, leasing, value autos) ; alt transcript corroboration .
Q4 2024 8-K (prior quarter trend, dividend) .
Q3 2024 8-K (two quarters prior trend) .
Estimates: S&P Global consensus and actuals (Primary EPS, Revenue) [Values retrieved from S&P Global].

LITHIA MOTORS INC (LAD)·Q1 2025 Earnings Summary