EarningsQ3 2026 Earnings Report
CH:LMO Q3 2026 EPS Results
Actual EPSCHF8.55
Consensus EPSCHF8.03
Beat/MissBeat by +CHF0.53
One Year Ago EPSCHF7.86
CH:LMO Q3 2026 Revenue Results
Actual RevenueCHF8.23B
Expected RevenueCHF8.06B
Beat/MissBeat by +CHF166.13M
YoY Revenue Growth+2.80%
Earnings Announcement Details
QuarterQ3 2026
Date10/21/2026
TimeBefore Open
Conference CallWednesday, October 21, 2026
CH:LMO Upcoming Earnings
Driveway Vehicle Solutions's next earnings date is estimated for February 17, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
CH:LMO Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was predominantly positive. Earnings, used vehicle profitability, DFC income and credit performance, U.K. operations, cash flow, capital allocation, and operating-efficiency initiatives all improved or remained strong. The main challenges were lower new vehicle revenue and units, reduced F&I per unit, soft U.S. after-sales volumes, a remaining used vehicle pricing gap, fourth-quarter seasonality, and unfavorable economics for potential Canadian Chinese-OEM expansion.Company Guidance
Earnings Growth Despite Mixed Retail Environment
Third-quarter revenue was just shy of $10 billion, while adjusted diluted EPS was $10.34, up 9% year over year. Same-store revenue declined 1.4% while lapping nearly 8% revenue growth in the third quarter of 2025, and management said the gross profit comparison was the best of 2026.
Resilient Vehicle Gross Profit and Pricing Discipline
Total vehicle GPU was $3,958, down only $63 year over year, which management attributed to strong pricing discipline. Management said new vehicle GPU was resilient and that results were good across the company.
Used Vehicle Profitability Improvement
Used vehicle profitability remained strong: used vehicle GPU increased 13%, or $234, year over year, to $1,993, while total used vehicle gross profit increased 9.3%. GPUs in the core three- to eight-year-old vehicle category rose 44%, supported by dynamic AI pricing.
After-Sales Gross Profit and Retention Progress
After-sales gross profit increased 2.4% and has grown in each of the last eight quarters. After-sales margins expanded 100 basis points to 59.5%. Nearly one in every four North American customers now chooses a lifetime oil contract, up more than 200 basis points from last year.
Cost Discipline and Operating Efficiency
Adjusted SG&A was 68.5% of gross profit, in line with the second quarter, while North America same-store SG&A improved 50 basis points sequentially to 65.7%. Management cited combined roles, fewer layers, automation, more efficient vendor relationships, and AI tools, and reiterated its long-term target of below 60% of gross profit.
Driveway Finance Corporation Growth
Driveway Finance Corporation delivered finance operations income of $32 million, an increase of nearly 70% year over year, as average managed receivables grew 22% and provision expenses improved. Managed receivables reached $5 billion, with penetration climbing toward the target of 20% or more.
Strong DFC Origination and Credit Metrics
DFC originations reached $937 million, net interest margin was 4.7%, up 10 basis points year over year, and North American penetration reached 18.3%. Average origination FICO was 752, front-end LTV was 94.6%, and allowance for loan losses declined to 2.8% of receivables from 3.1%.
United Kingdom Outperformance
The U.K. delivered another standout quarter, with gross profit up 7%. After-sales profit increased 13.6%, new vehicle units grew 10.6%, new vehicle gross profit rose 8.5%, retail used vehicle units increased 4.6%, and used vehicle GPUs grew 4.9%. Management said expanding partnerships with Chinese OEMs helped new vehicle performance.
Cash Flow and Balance Sheet Strength
Third-quarter adjusted EBITDA was $443.5 million, up 1.3% year over year. Adjusted cash flow from operations was $377 million, up 12%, and year-to-date adjusted cash flow from operations reached $987 million after adjusting for the one-time used vehicle floor-plan benefit. Net leverage declined to 3.1 times from 3.2 times in the second quarter.
Shareholder Returns and Share Repurchases
The company repurchased $85 million of stock during the quarter, buying 246,317 shares at an average price of $345. Year to date, Lithia and Driveway returned more than $627 million to shareholders through buybacks and dividends, and the share count was 11% lower than a year ago.
Disciplined Network Expansion
The company acquired four Gossett Hyundai and Kia stores in Memphis, Tennessee, adding $250 million in expected annualized revenue. Year to date, it acquired $1.2 billion in annualized revenue from high-quality stores while divesting a quarter billion dollars of underperforming revenue.
Pinewood.AI and AI-Enabled Transformation
Ridgeview Partners completed its acquisition of Pinewood.AI, producing a meaningful valuation gain on Lithia's investment during the quarter while leaving strategic alignment unchanged. Management said Pinewood.AI is being rolled out by manufacturer and is expected to be integrated by the end of 2028. In the U.K., AI-generated service presales were approximately 10%-11% on every AI appointment.
Agentic AI Opportunity
Management said agentic AI is already producing early success in the U.K. and in U.S. service and parts operations. The company believes half of the improvement from its current sub-70% SG&A level to a sub-60% target can come from agentics, including service presales and other repetitive activities.
DFC Consumer Credit Performance
DFC reported no change in consumer behavior in its portfolio despite higher rates and the oil environment. Delinquency rates were 20% better up and down the credit stack on a year-over-year sequential basis, and management said the portfolio continued to maintain high credit quality.
Digital Customer Engagement
The MyDriveway portal reached 156,000 users. Management described the portal as providing transparency, simplicity, and customer choice in sales and service interactions.
Long-Term Earnings and Used GPU Opportunity
Management reiterated that the company remains on track for its long-term target of $2 of EPS for every $1 billion of revenue. Management also said used vehicle GPUs should continue to climb above the $2,000 level in 2027, while acknowledging that the used vehicle market typically softens in the fourth quarter.
CH:LMO Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed