Lithia earnings for the third quarter of 2026 showed higher profit per share but lower adjusted net income, as share repurchases reduced the number of shares outstanding. The automotive retailer reported adjusted diluted earnings of $10.34 per share on October 21, up 9% from a year earlier, while revenue increased 2.8% to $9.95 billion. Shares declined that day despite the EPS growth.
Key Takeaways
- Adjusted EPS rose 9% even as adjusted net income fell 5%, reflecting a lower share count.
- Used-vehicle retail profit per unit improved, but new-vehicle and finance-and-insurance results weakened.
- Lithia raised its quarterly dividend 7% and repurchased $85 million of shares during the quarter.
Table of Contents
- Lithia earnings separate EPS growth from total profit
- Used-vehicle gains meet pressure elsewhere
- Buybacks and a higher dividend accompany expansion
- Conclusion
Lithia earnings separate EPS growth from total profit
Lithia’s third-quarter 2026 results announcement showed adjusted net income of $229.3 million, down from $240.9 million a year earlier. Adjusted diluted EPS nevertheless increased from $9.50 to $10.34 as diluted shares outstanding fell 12.7% to 22.0 million.
That distinction matters: the increase in adjusted earnings per share did not represent growth in total adjusted profit. Chief Executive Bryan DeBoer said the company’s lower share count was magnifying its earnings.
Reported results were stronger than the adjusted figures. GAAP diluted EPS reached $13.22, compared with $8.61 a year earlier, while net income rose 34% to $292.9 million. Adjustments excluded an unrealized gain on Lithia’s investment in Pinewood Technologies Group and other non-core items.
| Item | Details |
|---|---|
| Q3 new-vehicle unit sales | 105,471, up 1.1% year over year. |
| Q3 used-vehicle retail unit sales | 109,791, up 0.6% year over year. |
| Q3 floor plan interest expense | $70.3 million, up 21.6% year over year. |
| Quarter-end liquidity | Approximately $1.4 billion in cash, marketable securities and revolving credit availability. |
Used-vehicle gains meet pressure elsewhere
Used-vehicle retail gross profit per unit increased 11.1% to $1,970, but new-vehicle gross profit per unit fell 5.7% to $2,635. Total vehicle gross profit per unit, which includes finance and insurance, declined 1.9% to $3,949. These are per-unit measures, not changes in total vehicle gross profit.
Consolidated finance-and-insurance revenue fell 4.5% to $361.4 million. Separately, Financing Operations income increased 69% to $32.3 million, supported by record originations of $937 million. The two measures describe different parts of Lithia’s business and should not be treated as interchangeable.
Aftersales provided support, with same-store gross profit rising 2.4% and gross margin reaching 59.5%. Across the group, however, operating income slipped 0.3% to $420.2 million despite higher revenue.
Buybacks and a higher dividend accompany expansion
Lithia repurchased approximately 246,000 shares during the quarter at a weighted average price of $345. About $535 million remained available under its repurchase authorization as of September 30, 2026.
The board approved a quarterly dividend of $0.75 per share, a 7% increase. Payment is expected on November 20, 2026, to shareholders of record on November 6.
Network expansion also continued. Lithia acquired two stores during the quarter with expected annualized revenue of $150 million and divested two stores representing $115 million. In October, it acquired four Hyundai and Kia stores in Memphis, Tennessee, expected to add $250 million in annualized revenue. Those figures are expected annual revenue contributions, not revenue already recognized in the quarter.
Conclusion
Lithia’s quarter combined stronger reported earnings and used-vehicle profitability with lower adjusted net income and weaker profit per vehicle overall. The next confirmed shareholder dates are the November 6 dividend record date and the expected November 20 payment.
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