Why Is Lithia Motors Stock Sliding Today?

Lithia Motors, Inc. LAD reported first-quarter FY24 sales growth of 23% year-on-year to $8.56 billion, beating the analyst consensus estimate of $8.54 billion.

New vehicle same store units grew by 3.6 %. New vehicle retail revenues increased 22.4% Y/Y, and used vehicle retail revenues jumped 25.7%.

GreenCars monthly unique visitors (MUVs) increased by 71%, and Driveway Finance Corporation (DFC) originated approximately $493 million in loans.

Total vehicle gross profit per unit was $4,346. Gross profit rose 10.2% Y/Y to $1.3 billion, and the gross margin contracted 180 basis points to 15.6%.

Operating margin was 4%, and operating income for the quarter fell 9.9% to $341.4 million.

Adjusted EPS of $6.11 missed the analyst consensus of $7.89.

Lithia held $440.5 million in cash and equivalents as of March-end. Operating cash flow for the quarter totaled $292.4 million.

Adjusted EBITDA decreased 11% to $361.5 million. Net debt grew 21.1% Y/Y to $3.86 billion as of March-end.

The Board of Directors approved a dividend of $0.53 per share, to be paid on May 24, to shareholders of record on May 10. Under the current share repurchase authorization, approximately $451.7 million remains available.

“Responding to market conditions, we are rebalancing our capital allocation from acquisitions toward returns to our shareholders, with the long-term target of delivering $2 in EPS per billion in revenues,” said President and CEO Bryan DeBoer.

Price Action: LAD shares traded lower by 3.55% at $255.10 premarket Wednesday.