Lithia Motors: 2Q26 a Strong Beat Driven by New Units, Used GPUs and Related SG&A Leverage; Expect Outperformance Today; Above Seasonal Used GPU Strength Emerging as Common Sector Theme

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Lithia Motors: 2Q26 a Strong Beat Driven by New Units, Used GPUs and Related SG&A Leverage; Expect Outperformance Today; Above Seasonal Used GPU Strength Emerging as Common Sector Theme

J P M O R G A N North America Equity Research

29 July 2026

Lithia Motors

2Q26 a Strong Beat Driven by New Units, Used GPUs Neutral

and Related SG&A Leverage; Expect Outperformance LAD, LAD US

Today; Above Seasonal Used GPU Strength Emerging Price (28 Jul 26):$358.31

as Common Sector Theme

Autos & Auto Parts

Quick Take: LAD delivered a solid beat (EPS $10.03 vs. JPMe $8.55 and cons $8.70) Rajat Gupta AC

with EBITDA 11% ahead of JPMe, driven by strong execution on key controllable, (1-212) 622-6382

SG&A leverage, with SG&A/GP tracking at 68.6% vs. JPMe 70.3%, besides which, rajat.gupta@jpmorgan.com

better new and used GPUs combined with better new units and stronger DFC income Jash Patwa

(aided by reserve release) contributed to the beat, partly offset by higher floorplan (1-212) 622-5472

interest and slightly softer P&S SS GP. SG&A/GP improved ~295bps q/q, featuring jash.patwa@jpmchase.com

strong incrementals (GP +5% q/q, SG&A +1% q/q) and is likely to aid forward Yash Beswala

revisions, while the beat on new GPU stands in contrast to peer ABG’s miss yesterday (1-212) 622-0028

yash.beswala@jpmchase.com

and should likely support revisions further, pending commentary on go-forward J.P. Morgan Securities LLC

outlook. Buybacks were stronger ($242 mn vs. JPMe $200 mn). All-in, we view this

as a solid beat that is likely to drive outperformance in LAD shares and potentially

support sector multiples (with potential for mean reversion to continue), with focus

on the call likely to be on sustainability of new/used GPUs, SG&A/GP cadence, P&S

growth outlook, and DFC income trajectory.