October 21, 2026
| Q3, three months to Sept 30 | 2026 | 2025 |
|---|---|---|
| Adjusted net income | $229.3 million | $240.9 million |
| Diluted shares | 22.0 million | 25.2 million |
| Adjusted diluted EPS | $10.34 | $9.50 |
| F&I gross profit per car | $1,733 | $1,818 |
| Used retail gross profit per car | $1,970 | $1,773 |
| Financing Operations income | $32.3 million | $19.1 million |
Source: Lithia & Driveway third-quarter 2026 release, October 21, 2026.
Fewer shares did the growing
Lithia & Driveway’s adjusted net income fell 5% in the third quarter, according to its third-quarter release, and its adjusted earnings per share rose 9% anyway. The difference is the divisor: Lithia had 3.2 million fewer diluted shares after a year of buybacks. Bryan DeBoer, its chairman and chief executive, credited “a meaningfully lower share count magnifying every dollar we earn.”
As reported, diluted EPS rose 54%, to $13.22. That figure carries an $88.8 million paper gain on Lithia’s stake in Pinewood Technologies, the UK dealer-software company, worth $2.95 a share, which Lithia strips out of its adjusted results.
On the lots, the quarter went the other way. Same-store new-vehicle unit sales fell 2.7% and used retail units 3.2%, and same-store gross profit slipped 1.6%.
F&I per car fell $85
Finance and insurance, the products sold in the business office after the price is agreed, earned Lithia $1,733 per vehicle, down from $1,818. A quarter earlier the same figure was $1,808, almost level with a year before, so the drop arrived between July and September. Neither the release nor Lithia’s results presentation gives a reason for it.
Same-store F&I gross profit fell 8.1%, nearly as fast as new-vehicle gross profit, which fell 8.5% as new-car margins kept narrowing. F&I now supplies 24.2% of Lithia’s gross profit, against 25.8% a year earlier.
Used cars, service and the lender held up
Lithia’s used retail gross profit per car rose $197, or 11%, even as same-store used volume shrank. CarMax took the opposite route in its quarter to August, cutting its profit per car to sell more cars, so the two retailers are testing opposite answers to the same pricing question.
Same-store aftersales gross profit rose 2.4% at a 59.5% margin, a point higher than a year earlier. Service and parts now supply 43.1% of Lithia’s gross profit, more than any other line.
Driveway Finance, Lithia’s in-house lender, earned $32.3 million, up 69%, on record originations of $937 million. It set aside less for loan losses than a year earlier on a loan book more than a fifth larger.
Leverage is still above Lithia’s own target
Share repurchases cost Lithia $85 million in the quarter, down from $242 million in the second, and it has retired 8.7% of its shares this year. Penske Automotive’s controlling owners made a larger version of the bet this month, offering to buy out the public holders of a dealer group whose earnings are falling.
Net debt reached about $5.0 billion at the end of September, and trailing adjusted EBITDA fell 4.4% from a year earlier. On Lithia’s own measure, net debt is now 3.07 times adjusted EBITDA, up from 2.63 times a year earlier. The same presentation says Lithia aims to keep leverage below 3 times, and the ratio was above that at the end of June too. The quarter’s smaller buyback came with leverage still over the line.
In October Lithia added two Hyundai and two Kia stores in Memphis, taking the annual revenue it has acquired this year to $1.17 billion, in a market that recorded a record 462 dealership buy/sells in the twelve months to June. Store purchases, net of sales, explain why consolidated revenue rose 2.8% while same-store revenue fell 1.4%.
What to watch
Group 1 Automotive reports on October 28, according to its scheduling notice. AutoNation’s call announcement sets its results for October 30. F&I profit per car is the line to compare at both: if they show a fall like Lithia’s, dealers are earning less in the business office across the market; if neither does, the problem sits at Lithia. For Lithia itself, watch whether buybacks stay this small until leverage is back under 3 times.
