Key Highlights

  • LAD shares rose 5.66% pre-market to $316.86, up $16.97 from the prior close of $299.89.
  • Third-quarter revenue hit a record $9.9 billion, up 2.8%, against an estimate near $9.7 billion.
  • Adjusted diluted EPS rose 9% to $10.34, above the $9.70 estimate, while diluted EPS climbed 54% to $13.22.
  • Financing Operations income rose 69% to $32.3 million on record originations of $937 million.
  • The quarterly dividend was raised 7% to $0.75 per share, payable November 20.

Q3 Beat Sparks a Pre-Market Rally

Lithia & Driveway (NYSE:LAD) shares rose 5.66% pre-market today to $316.86, up $16.97 from the prior close of $299.89. The auto retailer reported third-quarter 2026 results before the open, with record revenue of $9.9 billion, up 2.8% from a year earlier, and adjusted diluted EPS of $10.34, up 9% from $9.50.

Both figures topped estimates. Revenue beat the roughly $9.7 billion estimate by 2.06%, and adjusted EPS beat the $9.70 estimate by 6.60%. Diluted EPS of $13.22 rose 54%, helped by an unrealized gain on its investment in Pinewood Technologies Group PLC and other non-core items that the adjusted figure excludes.

The stock had slid about 7% over the past month, with Morgan Stanley and Barclays lowering price targets to $310 and $375 ahead of the report. A weak outlook from General Motors (NYSE:GM) on Tuesday had also pressured sentiment across autos. Lithia & Driveway operates dealerships across the U.S., U.K. and Canada, alongside Driveway.com, GreenCars.com and a captive finance arm.

Used Vehicles, Aftersales and Financing Lead the Quarter

Used retail gross profit per unit rose $197, or 11%, to $1,970 from $1,773, and used vehicle revenue grew 4.8% to $3.6 billion. Same-store aftersales gross profit rose 2.4%, with gross margin up 100 basis points to 59.5%. Financing Operations income rose 69% to $32.3 million, supported by record originations of $937 million and an 18.3% penetration rate.

Not every line improved. New vehicle gross profit per unit fell 5.7% to $2,635, and finance and insurance gross profit per unit fell 4.7% to $1,733. Same-store revenue slipped 1.4%, and adjusted net income declined 5% to $229.3 million, while a diluted share count down 12.7% to 22.0 million lifted per-share results.

Capital Returns, Expansion and Balance Sheet

The company repurchased about 246,000 shares in the quarter at an average price of $345, or $85 million, representing 1.1% of shares outstanding and 8.7% of shares in 2026. About $535 million remains under the authorization. The board approved a quarterly dividend of $0.75 per share, up 7%, payable November 20 to shareholders of record on November 6.

In October, the company added two Hyundai and two Kia stores in Memphis, expected to bring $250 million in annualized revenue and lifting acquired annualized revenue to $1.17 billion year to date. Its chief executive was also named Chairman of the board, effective October 19.

The shares carry a forward P/E of 7.50 and a trailing P/E of 9.95, with a 0.79% dividend yield, within a 52-week range of $239.78 to $439.49. Net debt to adjusted EBITDA stood at 3.07 times, versus 2.63 times a year earlier.

Next Up: 10 AM ET Call

Management hosts the earnings call at 10:00 a.m. ET today. Investors will look for commentary on used-vehicle profitability, aftersales, the Pinewood rollout and the growing financing arm. Options pricing implies a 9.13% one-day move, against an average post-earnings move of 6.82%.