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Consumers' preference for personal vehicles and low interest
rates have lifted demand for auto retailers at a time when
supplies have been hit by an unrelenting semiconductor crunch.
This has pushed customers to pay higher prices and boosted
profits for manufacturers and retailers.
The company's sales and average gross profit for new vehicles
surged 130% and 58%, respectively. Sales from used vehicles
nearly doubled, with average gross profit jumping 47%.
Earlier this week, its rival and top U.S. auto retailer
AutoNation Inc forecast strong demand for new vehicles to
continue into 2022 and said consumers were buying vehicles
before they even arrived at stores.
Lithia reported that average selling price for used cars in the
quarter rose 21% to $25,691.
Demand for used cars and trucks have also risen in recent
months, with production at auto plants declining 6.6% in June
due to supply constraints.
Industry consultant J.D. Power had said average price of a new
vehicle set a first-half record of $38,041, an increase of 10%
from 2020.
"With 40% of our targeted $20 billion revenue acquired in the
first year of our 5-year plan, we are well ahead of schedule and
are only getting started," CEO Bryan DeBoer said.
The company also said there were 23 days of supply for new
vehicles during the quarter, compared with 61 days last year.
For the quarter, its net income rose nearly four-fold to $304.9
million. On an adjusted basis, it earned $11.12 per share,
beating analysts' estimate of $6.17, according to Refinitiv
data, while its record revenue of $6.01 billion also surpassed
estimates.
Lithia's shares were up 4% in premarket trade.
(Reporting by Shreyasee Raj in Bengaluru; editing by Uttaresh.V)
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