Automotive retailer Lithia Motors (NYSE: LAD) announced better-than-expected revenue in Q1 CY2026, with sales up 1% year on year to $9.27 billion. Its non-GAAP profit of $7.34 per share was 7% above analysts’ consensus estimates.

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"Our team drove strong results across our platform and sequential growth in earnings, delivering higher revenues and improved GPU in used vehicles, meaningful growth in aftersales, and growing penetration in Driveway Finance," said Bryan DeBoer, President and CEO.

Company Overview

With a strong presence in the Western US, Lithia Motors (NYSE: LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $37.73 billion in revenue over the past 12 months, Lithia is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To accelerate sales, Lithia likely needs to optimize its pricing or lean into international expansion.

As you can see below, Lithia’s 9.9% annualized revenue growth over the last three years was mediocre.

This quarter, Lithia reported modest year-on-year revenue growth of 1% but beat Wall Street’s estimates by 1%.

Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months, a deceleration versus the last three years. We still think its growth trajectory is satisfactory given its scale and indicates the market is forecasting success for its products.

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Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Over the last two years, Lithia opened new stores at a rapid clip by averaging 10.2% annual growth, among the fastest in the consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Note that Lithia reports its store count intermittently, so some data points are missing in the chart below.

Same-Store Sales

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.

Lithia’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. Lithia should consider improving its foot traffic and efficiency before expanding its store base.

In the latest quarter, Lithia’s same-store sales fell by 1.7% year on year. This decline was a reversal from its historical levels.

Key Takeaways from Lithia’s Q1 Results

It was encouraging to see Lithia beat analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $275.45 immediately following the results.

Is Lithia an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).