Lithia Motors Reports 16.6% Revenue Growth to $36.2 Billion, Net Income Declines

Lithia Motors, Inc. reported a significant increase in financial performance for the fiscal year ending December 31, 2024, with total revenues reaching $36.2 billion, a 16.6% increase from $31.0 billion in 2023. The company's net income, however, saw a decline to $802 million, down from $1.0 billion in the previous year, primarily due to margin normalization and increased interest expenses. The gross profit for the year was $5.6 billion, reflecting a 6.4% increase compared to $5.2 billion in 2023, driven by growth in vehicle operations and aftersales services.

The company experienced notable changes in its operational metrics, with new vehicle retail sales increasing by 15.8% to $17.6 billion, while used vehicle retail sales rose by 17.7% to $11.3 billion. However, gross profit margins for new vehicles decreased to 7.0% from 9.2% in 2023, indicating a normalization of margins after the pandemic. Lithia's acquisition strategy was a key driver of growth, with the company acquiring 146 stores during the year, contributing an estimated $5.9 billion in annualized revenues.

Lithia's strategic developments included the expansion of its e-commerce platforms, Driveway and GreenCars, which saw increased engagement, with GreenCars attracting approximately 11.2 million unique visitors in 2024, a 48% increase from the previous year. The company also focused on enhancing its customer experience through its omnichannel retail strategy, which integrates online and physical retail operations. As of December 31, 2024, Lithia operated 460 locations across the U.S., U.K., and Canada, representing 52 brands.

Operationally, Lithia's workforce grew to approximately 30,000 employees, with a focus on diversity and inclusion, as 22% of team members identified as female and 41% as minorities. The company reported a 32.5% reduction in cost per order and a 96.3% decrease in cost per acquisition through improved media efficiency and operational gains. Despite these advancements, the company faced challenges with increased selling, general, and administrative (SG&A) expenses, which rose by 14% to $3.8 billion, primarily due to personnel costs associated with its acquisition strategy.

Looking ahead, Lithia Motors anticipates continued growth through strategic acquisitions and investments in technology and digital solutions. The company aims to maintain its focus on operational excellence and customer satisfaction while navigating the evolving automotive landscape, including the transition to electric vehicles and changing consumer preferences. Lithia's management remains optimistic about achieving long-term financial targets despite the challenges posed by market conditions and interest rate fluctuations.