Lithia & Driveway Lifts Diluted Earnings 54% on Buybacks

The Tip Desk · October 27, 2026 · 4 min read

Diluted earnings were $13.22 a share as the largest global automotive retailer posted record third-quarter revenue of $9.9 billion.

Lithia & Driveway (LAD), the largest global automotive retailer, reported third-quarter 2026 diluted earnings of $13.22 a share, a 54% increase from $8.61 a year earlier, after a 17% year-over-year rise in the second quarter.

Higher net income attributable to LAD and a lower diluted share count both contributed to the per-share gain. Diluted shares outstanding fell to 22.0 million from 25.2 million, a 12.7% decline. President and CEO Bryan DeBoer said the capital decisions of the past year were reflected in the results, with a meaningfully lower share count magnifying every dollar earned.

Revenue increased 3% to $9.9 billion from $9.7 billion in the third quarter of 2025, a sequential acceleration from the 2% year-over-year increase in the second quarter. Net income was $292.9 million, a 34.0% increase from $218.6 million. Adjusted diluted earnings were $10.34, a 9% increase from $9.50, matching the second-quarter adjusted rate. Adjusted net income was $229.3 million, a 5% decrease from $240.9 million.

Used vehicles carried the mix. Used vehicle revenue was $3,630.1 million, up 4.8% from $3,463.3 million. New vehicle revenue was $4,868.6 million, up 1.6%. Aftersales revenue was $1,086.6 million, up 4.3%. Finance and insurance revenue was $361.4 million, down 4.5%. Average gross profit per unit on used retail rose 11.1% to $1,970 from $1,773. Used retail GPUs increased $197, or 11%, year over year. New vehicle GPU was $2,635, down 5.7% from $2,793.

On a same-store basis, used retail GPU was $1,993, up 13.3% from $1,759. Same-store used vehicle gross profit was $203.1 million, up 9.3% from $185.8 million. Same-store new vehicle gross profit was $263.9 million, down 8.5% from $288.4 million. Same-store total revenues were $9,400.6 million, down 1.4% from $9,536.0 million.

Aftersales gross profit increased 2.4% and gross margin was 59.5%, a 100-basis-point increase, on a same-store basis. Overall gross profit was $1,495.8 million, up 2.0% from $1,466.0 million, with gross margin of 15.0% versus 15.2%. New vehicle gross margin was 5.7%, down 40 bps from 6.1%. Used vehicle gross margin was 5.8%, up 30 bps from 5.5%.

Income from operations was $420.2 million, down 0.3% from $421.6 million. Operating profit as a percent of revenue was 4.2% versus 4.4%. Other income swung to $104.2 million from an expense of $13.3 million, including an $88.8 million investment gain that was excluded from adjusted results.

Financing Operations income was $32.3 million, a 69% increase from $19.1 million, with record originations of $937 million and an 18.3% penetration rate. Total average managed finance receivables were $5,558.0 million versus $4,541.8 million. Interest and fee income was $122.1 million, or an annualized 8.7% of total average managed finance receivables. Total interest margin was $65.8 million, or an annualized 4.7% of total average managed finance receivables.

The company repurchased approximately 246,000 shares at a weighted average price of $345, or $85 million, representing 1.1% of outstanding shares in the quarter and 8.7% in 2026. About $535 million remained available under the repurchase authorization as of September 30, 2026. The board approved a dividend of $0.75 a share, a 7% increase, after a 23% increase in the second quarter.

In the third quarter LAD acquired two stores expected to generate $150 million in annualized revenues and divested two stores representing $115 million. In October it acquired two Hyundai and two Kia stores in Memphis, TN, adding $250 million of expected annualized revenue. Year to date, acquired stores are expected to generate $1.17 billion in annualized revenues. The company ended the quarter with approximately $1.4 billion in cash, marketable securities, and revolver availability.

The board appointed DeBoer as Chairman of the Board effective October 19, 2026. Sidney B. DeBoer will become Vice Chairman.