#United States #Medford #Lithia Driveway #Driveway Finance #automotive retailer

Lithia & Driveway Hits Record Highs in Q4 of 2024

Lithia & Driveway (NYSE: LAD) has reported remarkable financial outcomes for the fourth quarter of 2024, achieving a record revenue of $9.2 billion. This impressive figure demonstrates a robust 20% increase compared to the $7.7 billion from the same quarter in 2023. The company also marked its first year of profitability for its finance operations, specifically within Driveway Finance Corporation, signaling a pivotal development in its business strategy.

Financial Highlights

The fourth quarter results revealed a diluted earnings per share (EPS) attributable to Lithia of $8.12, which is a 5% increase from $7.74 in Q4 2023. Furthermore, while the adjusted diluted EPS was $7.79—indicating a 6% decrease compared to $8.32 from the previous year—this decrease was partially offset by insurance proceeds related to a business interruption claim. It assisted in boosting the diluted EPS by $0.17.

Net income for the fourth quarter stood at $217 million, just slightly up from $216 million in the same quarter of 2023. Adjusted net income was reported at $209 million, down 10% from $232 million recorded last year. Notably, the adjusted results also exclude certain non-core items impacting earnings across both years.

Retail and Aftersales Growth

Key to this performance was a 7.4% increase in new retail units sold on a same-store basis. Aftersales gross profit also saw a 4.5% bump, further elevating overall income levels. In terms of financing, Driveway Finance Corporation (DFC) originated $501 million in loans, upping its portfolio to $3.9 billion in average managed receivables while increasing the net interest margin to 4.7%.

Lithia's strategy continues to include share repurchases, with 0.9% of outstanding shares being repurchased during the quarter. Bryan DeBoer, President and CEO, noted, “2024 marks another milestone year for Lithia & Driveway with record-breaking fourth-quarter revenues and the first profitable year for Driveway Finance.”

Full Year Performance and Future Outlook

Looking at the full year, Lithia achieved a total revenue of $36.2 billion for 2024, a 17% increase from $31.0 billion in 2023. The full year diluted EPS differentiated at $29.65, demonstrating an 18% drop from the $36.29 reported in 2023. Adjusted diluted EPS for the year also reflected a decline of 19%. Likewise, the net income attributable to Lithia decreased by 20%, settling at $0.8 billion.

In another significant development, Lithia acquired Stohlman Subaru in Sterling, Virginia, expanding its footprint into the Mid-Atlantic region—a move expected to contribute approximately $80 million in annual revenue. This acquisition further solidifies Lithia’s brand offerings and expands its market presence in a lucrative area.

Financial Stability and Strategic Initiatives

As of the end of the fourth quarter, Lithia maintained a strong balance sheet with roughly $1.4 billion in cash, marketable securities, and available credit. This healthy financial standing enables ongoing investment in growth opportunities and future acquisitions.

The Board of Directors has also declared a dividend of $0.53 per share, scheduled for disbursement on March 21, 2025, to shareholders of record by March 7, 2025. In 2024, Lithia repurchased approximately 1.2 million shares at an average price of $283, showcasing its commitment to returning value to shareholders.

Looking Forward

As Lithia & Driveway prepares for 2025, their focus is on enhancing customer experiences, expanding its unique automotive ecosystem, and driving sustainable growth. The company's omnichannel approach is expected to propel performance in the upcoming year and beyond, even amidst evolving marketplace dynamics.

In summary, Lithia's record financial results showcase its adaptability, robust growth strategies, and the success of its innovative finance operations, setting the stage for continued development in the automotive retail space.