Lithia Motors Inc. stated Wednesday new-motor vehicle product sales and web income slipped in the initially quarter due to the fact of the coronavirus pandemic and associated stay-at-household orders across the region.
Finance and coverage income, used-motor vehicle product sales and overall body and parts earnings rose in the quarter despite considerable product sales declines in the 2nd fifty percent of March.
The Medford, Ore., retailer stated Wednesday web income dropped eighteen percent to $46.two million in the initially quarter. Initial-quarter earnings fell 1.6 percent to $two.eight billion.
Just before the coronavirus pandemic, which shuttered stores and slowed product sales across the U.S., the nation’s third-greatest retailer skilled progress across its important organization lines, CEO Bryan DeBoer stated in a statement. Lithia is the initially publicly-traded dealership group to report initially-quarter earnings.
“These outcomes continued via early March in advance of being negatively impacted by varying stages of shelter-in-position policies enacted in most states owing to COVID-19,” DeBoer stated.
On a contact with investors, Lithia executives stated when stay-at-household orders have been issued, product sales volumes halved for new and used cars, although actions to gradual the virus different across the retailer’s 188-keep footprint. Some markets, these kinds of as Pennsylvania and Vermont, had just about no product sales, whilst dealerships in Montana and Texas altered hours.
This month, Lithia stated it lower staffing 37 percent, impacting more than five,000 staff members, largely as furloughs. The organization stated throughout the contact with investors that about fifty percent of the layoffs will be long lasting.
Shares of Lithia have been up eight.4 percent to $95.29 in midday buying and selling Wednesday.
Acquisitions, dollars position
Lithia obtained two California Lexus stores throughout the quarter. Lexus of Sacramento and Lexus of Roseville are expected to create $a hundred and sixty million in annual earnings.
“We are working closely with our foreseeable future acquisition partners to restructure transactions in order to protect funds. In addition, we are also deferring closing right until the 2nd fifty percent of this yr to attain increased insights into earnings high quality and market place situations,” DeBoer stated.
DeBoer stated Lithia has the funds to continue on dealership acquisitions and “weather this time period of uncertainty.” The dealership group concluded the quarter with about $550 million in dollars and credit availability and an added $500 million in unfinanced serious estate.
Product sales: New-motor vehicle retail product sales fell nine.five percent to 35,907 in the quarter, whilst used-motor vehicle retail product sales rose 4.eight percent to 42,631. General product sales totaled seventy eight,538 cars, down two.3 percent from a yr earlier.
Exact-keep product sales: On a same-keep basis, new-motor vehicle retail product sales slid fifteen percent to 33,178, even worse than the twelve percent drop in U.S. light-weight-motor vehicle product sales across the business in the initially quarter, in accordance to the Automotive Information Info Center. Utilized-motor vehicle retail product sales rose 1.7 percent to 40,374.
Lithia is No. 3 on Automotive News’ checklist of the best one hundred fifty dealership groups centered in the U.S., with new-motor vehicle retail product sales of a hundred and eighty,532 in 2019.