Lithia & Driveway (LAD), parent company of Airstream Adventures, reported the highest second quarter revenue in company history and the first profitable quarter for Financing Operations, which includes Driveway Finance Corporation.
Second quarter 2024 revenue increased 14% to $9.2 billion from $8.1 billion in the second quarter of 2023.
Second quarter 2024 net income attributable to LAD per diluted share was $7.87, a 27% decrease from $10.78 per diluted share reported in the second quarter of 2023. Adjusted second quarter 2024 net income attributable to LAD per diluted share was $7.87, a 28% decrease compared to $10.96 per diluted share in the same period of 2023. Unrealized investment gains partially offset by foreign currency exchange losses positively impacted earnings per share by $0.75.
Second quarter 2024 net income was $217 million, a 28% decrease compared to net income of $301 million in the same period of 2023. Adjusted second quarter 2024 net income was $217 million, a 29% decrease compared to adjusted net income of $306 million for the same period of 2023.
Second Quarter 2024 Highlights:
- Total revenues increased 14% compared to second quarter 2023
- Diluted net income per share improved from $6.11 to $7.87, a 29% increase, from first quarter 2024
- Financing operations first profitable quarter with income of $7 million
- Driveway Finance Corporation (DFC) originated $562 million in loans, total portfolio of $3.6 billion
- Repurchased 2.9% of outstanding shares
“In the second quarter, our teams focused on operating efficiency and continuity as we responded to the continued normalization of margins and the disruption created by the CDK cyberattack. Our teams demonstrated an impressive effort to quickly pivot and provide solutions to maintain our ability to stay operational across our network and support the restoration of our environment,” said Bryan DeBoer, president and CEO. “Our diversified model demonstrated its strength, delivering the first quarter of profitability in Driveway Finance and continuing maturity of our adjacencies as we expand our omnichannel ecosystem to deliver the best experience for our customers. We have opportunistically rebalanced our capital allocation from acquisitions toward returns to our shareholders, with the long-term target of delivering $2 in EPS per billion in revenues.”
For the first six months of 2024 revenues increased 18% to $17.8 billion, compared to $15.1 billion in 2023.
Net income attributable to LAD for the first six months of 2024 was $13.75 per diluted share, compared to $19.08 per diluted share in 2023, a decrease of 28%. Adjusted net income attributable to LAD per diluted share for the first six months of 2024 decreased 28% to $13.97 from $19.38 in the same period of 2023. Unrealized gain on investments partially offset by foreign currency exchange losses positively impacted earnings per share by $0.60.
Corporate Development
During the second quarter, LAD expanded its network in the Southeast region with the acquisition of two stores in Tennessee and added Woodbridge Hyundai in the greater Toronto area. Year-to-date, it has acquired over $5.6 billion in annualized revenues.
LAD expanded its omnichannel strategy with the purchase of a minority stake in Wheels, Inc. in partnership with Marubeni Corporation. Wheels, Inc. is one of the largest fleet management companies in North America with a best-in-class management team and a robust competitive moat, the company said. This investment in a fleet management operator is expected to create transformative synergies between LAD’s retail platform and fleet operations. This transaction was completed in the third quarter.
Balance Sheet Update
LAD ended the second quarter with approximately $1.3 billion in cash and cash equivalents, marketable securities, and availability on revolving lines of credit. In addition, unfinanced real estate could provide additional liquidity of approximately $0.3 billion.
Dividend Payment and Share Repurchases
The board of directors approved a dividend of $0.53 per share related to second quarter 2024 financial results. The dividend is expected to be paid on Aug. 23 to shareholders of record on Aug. 9.
During 2024, LAD repurchased approximately 793,000 shares at a weighted average price of $256. Under the current share repurchase authorization approximately $613.8 million remains available.
Click here to read the full release and view LAD’s non-GAAP reconciliation tables.