Lithia Motors (LAD) 1 Aug 242024 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Lithia Motors Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Jordan Jamie, Senior Director, Investor Relations. Thank you.

begin. may You

Senior of you earnings Vice Thank President us growth. our Tina include Chamberlain, the may Finance; for and CEO; about CFO; Good With for company's expectations me Such about future statements constants. that uncertainties events, products, are made. Chuck Chief to from and which President quarter be Miller, President; finally, Officer. Today's Vice forward-looking and no and and Operating call. Holzshu, subject DeBoer, President forward-looking Lietz, We today second our Driveway and update Senior any filings Chris statements morning. release. deem and markets we to materially Executive made could discussion of joining are Vice statements risks are and uncertainties in Adam We to financial undertake Bryan the We risks material with results cause the Securities those carefully to Exchange duty disclose statements, and of actual Commission. this the as differ date to urge you projections

financial today for of non-GAAP of references GAAP to today's refer reconciliation Please results discussed measures. the Our press to include release measures. comparable text

an our also updated on have investors.lithiadriveway.com, presentation highlighting posted We website, second our results. quarter investor

morning, Thanks, second welcome and Jordan. quarter Good our to earnings call.

Driveway results and as profitable we teams drive Lithia continue to and Our ecosystem. mature our mobility unique

profitability highest whenever have business to we our revenue, assembled for challenge of of capital foundation the in cost We and low share. we customers highway capture financing period higher first green cars improvement quarter in share ever our the the with laid despite Driveway, serve XX% adjacencies, delivered a unlimited operating paved in and earnings growth met of lower market operations with strategy our ecosystem cost CDK strategic our execution sequentially of faced and as to an results a quarterly outage. quarter improved margin associates and during operational adjusted a achieved continued the wherever, potential Our $X.XX, the per much diluted

focused realizing delivering market now efficiencies across potential growing ecosystem. scale, are this and experiences through built our we customer leveraging share, our operational on the We all have

that This when ours solutions our I'm quarter responded way create dealer network. our of a across others' and proud cyberattack brought unique quickly systems. many pivoting management of CDK operations impacted faced and challenge the a team continuing to

We results on impressive XX/X. will and to the in customers the I our talk impact team who moment, the our want to of a operations serving but members rose recognize about efforts challenge,

of sequential after make in to that large progress create XX-day the plan to cost the will even QX. continue significant fully that the savings profitability realized achieved SG&A improvements first during with be million $XXX stage in aim annualized least We impacts CDK. promise at We've of

amount believe now year-end. driven reductions there we from double to forward, Looking occur inventory by are and this primarily potential is expected to

During significant while progress on corporate as level in and personnel, advertising focus a made leveraging QX, implemented to maximizing of redesign expenses such leadership profitability ecosystem. roles we our areas and

stake Alongside our omnichannel mobility robust Wheels global our in leasing, fleet a management competitive to potential moat. high-margin transformative best-in-class minority platforms. in Corporation. if has This management team, create to of, is their investment focused America PBM Wells on Wheels in the and a retail fleet company profitable largest one we operator surrounded with strong pleased the have fast with that ecosystem. and in are partnership and performance and We between a a highly a management purchased by North announce Marubeni fleet strategy synergies complete completes not,

XX% to from billion last Lithia Driveway up quarter. second $X.X revenues the for year. results key to of on QX Now grew

delivered unit strong improvements down total quarter [indiscernible] good the result same-store period to momentum Diving quarter rates the down sales to While to remained our and last were savings performance, outage, in compared X.X% profits year a outage, CDK our the at interest vehicle as gross had of revenues unit cost sales a operations with experienced in QX into prior same-store efforts. headwinds same-store down $XX.XX sales quarter gross only and similar resilient and the in profit the $XXX X%. Total per same ago. vehicle in

to was after drove during days the quarter. the is in XX XX% business the aftersales decline Our X.X% down outage. CDK almost down This sales primarily of related

as were systems deferred processes work and expect turned some We into July normal. were our of the early

have and and do responsive, teams impacts. long-term nimble been Our any we not expect

$X.XX in, of the improve share sustainable in a considerable XX% second of the we we're and maturing as a by strong increase we of sequential with generated adjusted cards the continue move e-commerce from clear earnings outage. profitability strategies, estimated and on per green to from All earlier operating last EPS. have Driveway and last quarter achieving saw diluted We impact in quarter, XX% XX% year, QX nearly produced strength operations rates reduced our in customers. results nicely $X.XX as of convert performance Financing CDK and they efficiencies decrease pace a in and advertising with for burn to loss year new and an income than operational also $XX.X to compared Our been are year profitability. investment ago million expected. towards adjacencies $X.X compared refine million

delivering the profitability customer focus core strength meet unlocking We and by of efficiently execution. demands to our continue decisively ecosystem on by to our operate on acting

highest most strategy. our and on strategy difficult talented built replicate unique our network network. demand dense foundation is of extremely to Moving inventory the vast physical LAD to the physical people, and The upon industry's

and physical portfolio. U.K., expand diversify build foundational to as in and the extensive new stores, customer adjacencies wheels America to strategic partnerships continue experiences such the North and adding our network most We our

world, all largest to ability across business. of continue Operating in grow in the retail our strengthen we to addressable the profitably market elements our

do. solutions more The natural retention our of us the momentum, more customer LAD with a in like brands, quarter, and second effectiveness GreenCars, provide capture reaching X% to magnetic core customers also month that digital Our total saw we customers' cars MUVs. expand within to per and compared strategy units building year. These unchanged. XXx to sticky customers physical solutions increase MUVs than remains is and convenient including Driveway, contributing ecosystem, year-over-year, transparent, XX,XXX wallet MUV X% showed the while create access simple, green in share and of to create over $XX ecosystem, million solutions integrate our where businesses Driveway XXX,XXX are over digital allowing up last

rating with focus teams Our have great profitability expanding Google a of out of X market share. reaching made our digital and and channels renewed X.X in on strides year-to-date

recent provides increases avenue technology by CDK, with for business. within emphasized As our events sizable an in productivity

as technologies the customers continue excited stores to customer in productivity, a to enhance and the progress ability are operational about in our our single is systems, order and solutions such our platform. convert the associates We there to Lithia making resiliency. with U.K. experience onto platform bring same as increase current place our we Pinewood improve Pinewood ecosystem substantially

mission be competency, loyalty investment our to touch with stores increase we people, and This States. regenerative These core dynamics. and can improve accretive points the continue the on life opportunities remain share to profitability. Acquisitions the customer's across United market we tools as ultimate network our a disciplined throughout cycle our focused equips look and to that for adjacencies improve the with market quarter, of This strengths, in free generated Technologies to discipline by quickly nice Pinewood possibilities. allows capability reflects our enable cash our and combined a return, platform's us view market's us flows to powered the positive respond financial local which

XX% As revenues we estimated future XX% of Xx greater a reminder, target normalized or or have over for returns minimum to [indiscernible] X date, return after-tax to annual reiterate that EBITDA. XX% expectations We success our $X your year. Life to of a typical XX% XX%, LAD acquisitions acquired high-risk our revenues is and be acquire over yielded after-tax rate per will strategy. in roll-up not demonstrating to billion and that

This to two To area annualized like Honda all would to the the billion Driveway. associates Group stores the new welcome Sunrise located family. $X.X Lithia the acquired XXXX, in I we Greater store revenues. quarter, Driveway Lithia in Tennessee date, we personally Toronto in to Woodbridge in welcomed and have our from

industry see and consolidation a as returns. of long-term growth-oriented strong are We driver

we free flows market responsive drive engine able cash to the returns we capital built, to our are the With to conditions. deploy greatest have

discussed adjusted last allocation targets quarter, equally buybacks. our share have capital we and As to balance acquisitions

million repurchased our X.X% or outstanding of the $XXX we quarter, shares. During

massive existing our created in increasing the stores. the with will a state continue our range. as our aftersales adjacencies gains revenue that cost continuing both and pathway a continued control business, our efficiencies, achieve future Slide in elements these of members to normalized clearly we interactions, illustrated our key valuations operational as This levers mid-XX% now our each through pathway we underlying team these used and as customers wallet life see store's generating in to First, with share. Increasing to XX acquisitions with are by we billion growing greater every combined investor as same of customer in remain technology factors a improve share We presentation. coexisting on profit monitor and of have SG&A we to repurchase steady $X opportunistic. Weaving $X a for gross solutions by percentage new share market and in sustained profitability cycle EPS together productivity totally more GPU includes and the performance within catalyst realizing our The see environment, follows: built of of in help Through well. potential assuming and SAAR and the

and Southeast and retail in Second, of acquiring regions optimizing network the in our automotive United larger driving profitability South stronger performance the by Central high stores States.

further reach U.S. new share X.X%. channels X%. market expect ultimately share we of a used to growth market vehicle in combined Today, also of have our market digital blended We and share increase our to

DFC Third, financing, headwinds of reserves. with with units CECL beyond to and XX% maturing associated up the

solutions investment-grade deliver charging ] borrowing dividends. infrastructure and from profitability expecting in return capital ongoing horizontals, efficiencies and share going maturing is shareholders path And Our continue and [ drive like QX we achieved costs credit scale size, financing buybacks and vendor as down an forward. Fourth, management, contributions with rating. Fifth, costs, fleet growth improved corporate operations profitability to to increased our through of consistent lowering through pricing save Pinewood, finally, towards insurance. to and DMS captive including software

our maximize and well to total reach global and life We mobility at continue to more and our a journey are cycle throughout scale building deliver the powerful experiences richer unique customer and scale. ecosystem ownership positioned frequent in

of we elements of for now original and levels place, forward are firmly all focusing Our on new execution to our performance design attentions in establish to look industry. our

the new positions more him our customer-centric Adam's to Adam's be delivering company Deprez Officer. combined Operating ecosystem. Diana aftersales perfectly at business. to Now to Chief announce evolving convenient I and Officer to step extensive our culture a I on, and before Driveway ecosystem organizational Adam this into industry as spoke excited President level to share role. that leadership support improving of Adam role very build Chamberlain partnering performance. Chief instrumental for experiences continue that commitment are we customer changes experience our since high operations am to promotion connected along with Regional to with experience Customer will I automotive across XXXX, like creating would our and and in Eastern out related Chief some Officer the move of his driving Customer a to channel, with in and will designed operations in

enhance unique aligns spark on to and to Pinewood seamless will growth company. These and deliver we strengthen leadership Wheels. been instrumental handing to changes, organizational company Chris Congratulations, Technology across the and see Diana, provide allowing and has these serve and Chris continuing our the growth be excited as success to Boards our to on experience contributions and our are results Chris With partnership to strategy, profitability the our customer through to Adam. of future differentiation. the best-in-class Holzshu execute and our the Chris his our driving changes and continue ecosystem baton appointee design expand in Adam, and a ecosystem

built, look the I Thank an focus into you, and the to excited Chris, level. on company enhancing drive our to new stepping customer-centric It's I'm use our this to be a to and also, our you've this to leading Thank for forward you next excellence operational that culture. Bryan. honor role, operational springboard to and creating foundation

execute and provides. the share team strategy within for grow levels achieve few of and excited the have profitability to ecosystem We realize and potential a I'm team massive market store clear years. our high to opportunity the at our performance

journey our Thank potential. I'm to you, excited looking reach Adam, Diana, and forward accelerating Chris. our to

over call the turn to to like I'd Now Tina.

today. and joining everyone, Brian, thank you, us Thanks,

benefits driven earlier quarter second compared than the million $XX.X of primarily $X.X second of as our and of last income penetration segment, continues quarter now year. of operations a and of to are in by we initial grow, diversity DFC, in to we with CECL achieved profitability financing rates continued Our and increase loss reserves. past the from million This the seeing adjacency are trajectory many model its business in upward expected headwinds the

financing strategically through and growth confident The underwriting for quality and expected. portfolio. to high Originations financing billion reiterate at with earnings We our balance quality other that a volumes on DFC our credit We of and were growth operations continue market with continue perform in remain continues to credit XXXX million quarter and quarters. Overall, interest. similar during [indiscernible] prime portfolio band, has with expect the this origination long-term to business loans over in balance now better to the grown operations ability quarter. we in $X.X than consistent the risk deliver yields, of to profitability $XXX rates focus seasoned

each reminder, key is originated potential profitability a attribute a we to is toward to as up target. EPS indirect significant element As profitability move loan compared traditional presents our Xx X:X our to by and upside expected lending more to and revenue DFC

of basis, SG&A. to XX% gross higher profile on business. which the our the during quarter, percentage reflects as profit Moving excludes the XX.X% on Adjusted impact expense a SG&A same-store which a and of U.K. event CDK of the was

streamlining U.K. closing merging We continue network execution divesting and including and stores. of targeted optimization, our operations

balance our performance. excluded million Xx. adjust to related the normalized balance operating of These growth supply and X.XXx. We industry driven unit flow EBITDA CDK quarter, collateralized warehouse the sales, unique quarter by This new is $XXX We of expense. even of the interest from and the leverage net the which to calculations. Similarly, approximately of vehicle interest with outage discipline reported cash financial to impact Xx with maintain covenant below excludes from comfortably Moving of We the second The of and integral EBITDA sheet adjusted leverage requirements of to bank our treats GPUs target target as have our expense DFC, also calculations. the lower on higher financing as and operations in our planned our and and impact associated for below on X.Xx, by to is ended and and an and are lines leverage industry these figures plan ABS this leverage assets. floor issuances inventory. sheet our vehicle financing we capitalize debt which our debt,

mainly in cash During margins, to impacted acquired Free and in the manufacturing construction capital by CDK compared generated were outage prior at quarter, million. we cash flows $XXX increase EBITDA meet decreasing expenditures declining free June to to to the an due year, related flows locations requirements. of recently

growth complex closely our initiatives environment. Earlier cash to flows our supporting allocation balance year, with the shareholder our adjusted balance Our while capital quality navigating capital our allocation and focuses strategy we which this regenerative on from more of acquisitions return. business, the sheet preserves strategy today's

of in the of our the repurchase X.X% result weighted outstanding price a approximately shares of we quarter, a $XXX million available $XXX, rebalance at As remains second focus under our authorization. share average repurchased

drive to And Our $X the deliver achieving has per to $X through vision necessary infrastructure toward in our and and acquisitive of margins ability revenues on growth unchanged. target remains our EPS billion tools long-term team revenue. and synergies in and

concludes prepared grow to and plan the our turn to of the audience culture designed the this diverse our achieve gives shareholders. that, us With continue deliver Our questions. This to talented foundation performance. Coupled members the is business I'll our consistent remarks. value strong call driving and Operator? and for over for and our to necessary team, with

Ryan [Operator Craig-Hallum. Instructions] Our from first Sigdahl with question is

EPS. around said statement Adam. I in quarter in would XX% the I in the Bryan, looking if some I we're sequential at you want I caught believe right, prepared a I Congrats, that QX increase to into pace something but $X.XX it context guess guess be XX% that nearly or with start remarks. said on for your I helpful. am for

Ryan.

So the the the what get on us XX% a CDK impact. and that concept been you is the without would $X.XX. over have almost Add was $X.XX and to Pinewood CDK event, little the XX%, just cost tracking $X.XX which our excluding

versus correct, So referring? that's that's QX QX, that what XX% you're

Exactly right.

Then looking sales, far of at I to Slide in kind is of for $XX $XX you where it's isn't which billion there, from away XX for believe, my and follow-up, a billion are midterm, today. new guys statement

guess, revenue we're just can what I any frame really that the So EPS? time it of around of for I and get guess frame about Or is at time you $X.XX looking $X.XX, midterm? type range, reaching

Yes.

midterm, to I to term, if think when we long X think X we years. think X think about we it's years. X And

appropriate this. So way I think to that's at look the

I improvements think of the a to as bit which good little much X, we're And quicker. announced been our than And importantly, of you was saw in gross was that some last basis on made groups operations. even most good percentage eclipse pretty SG&A pretty so probably different have quarter. X We able all far, tailwinds. some we quarter, a is the as same-store going think a got I the to in of be those it lowest peer numbers

of the like to see XX-day that quarter. So of start that we be plan, on last starting said X, you're the to starting impact we're going to most plan going you're take to July -- XX-day And hold. realizing

JPMorgan. Our next question is from with Rajat Gupta

couple. I just had a

range it think is cited within could a to Or something follow-up. think about third or reduction the on given I previously, quarter? year the XX on have good in in there third Are you've clarify Maybe ] were [ million. and in $XXX like itself? complete and cost you gross SG&A SG&A Just the we then the like later framework following going quarter going days up next a plan, the Is to XX% to the XX%. to be that year? maybe be I that, to

Bryan. is This

you're to a is in we'll where we about though two in somewhere going importantly, quarter the the build. hold, I inflated rightsizing I this in that are specifics around what the think Even bit seeing I have and SG&A I end probably were up a start say most QX think [indiscernible] this think It's when second. reasons. would QX, important XX-day forward, that we give momentum to can just we you on that taking little for still still. some possibility plan that and Remember remember

So the that into start offset this. by it. also feel hit And time you winter September, would to could the you I seasonality. going that October, say

mostly will did what July that We've we I million, it of QX, inventory eclipsed half the difference from We're with $XXX of closer got end and realized take may we've be primarily got the and okay, reductions, in remaining us opportunity X. coming of million we improve report about So called over million to now eclipse now of to which that year. we've there, earmarked the the $XXX on $XXX first XX-day plan. the the yesterday. lots

of the I to realize we'll get we're definitely say XXXX, we'll most that.. get that So but of in benefits QX, if into lucky, of would some

are years run over couple then parts curious and And saw also, acquired have they where proactive us been in the or sense opportunity you in know it. just stores of some and price of Got if the CDK. could to you the more what love to I'd like like May? any clear. stores? not of a very And perhaps is rate give take you was legacy last might as maybe June services. the opportunistic July? there seeing Clearly, That's April, impacted was by on I And

Yes.

mix. think potential, I we've but I I X-year-old have good that, does. not stores, about you're if almost think some our which what, sales, the years mid-XX% Lithia get numbers, stores lot mix, now detail indicating think used a spent if our add we And to auto now, into to typically in highlight that those is a in only billion It more the think stores, X.X over XX% our able that vehicles, be potential. is little of value of things massive meaning what of revenue is to on our you which we're that $XX of acquired newly our being selling

service, of So to that. and able body that's to there. opportunities. the be the parts, opportunities one of further leverage there's And the Obviously, obviously, grow whole in gets

sales low June. the Now obviously, that [Audio little that the Gap] then mid- get the when we single we XX-day a handwriting bit you're business during same-store in a most basis. more did had to that And in difficult digits it's of [indiscernible], period into books on

for the there a or so. XX first carryover However, days was little

a lift seeing we So July. are little in bit of

extra However, to July X also year. has days relative last

days you, I that X% because just XX it fact that or automatically give of should anything July. we've of be the instead about So in days X% up XX got

question next from is Our Bret Jefferies. Jordan with

that Bryan, just inflated are cadence you you maybe car that talk see where little path in GPUs GPU? glide said I the and on you the of the quarter a think possibility still. now sort that about new Could

Sure, vehicle basically sure. our we that fortunate total up you sequentially were if looking the good. quarter as GPU. June on ended darn last were And same look quarter-over-quarter, pretty we were We

were X,XXX X,XXX still, because for GPUs, know X the structurally about F&I. including okay? Today, back of total going years. our F&I that we okay, is before We was X than to X,XXX it in to sit years, improve different at do Now we ability

average of $X,XXX. business there's a really $X,XXX of difference lot a South less portion Southeast that couple is took higher up a biggest F&I, a And start when F&I big dollars us that has single from higher helps size, hundred then as to our regions in which high-margin your have SG&A So Central, the store and think which of and in you think have the this a we is there the would about well, ton. our difference, good about we now regulation, to

$XXX to somewhere would between say come that we $X,XXX $X,XXX, be Meaning F&I vehicle at starting everything a we're to which total that to out, we're normalized And believe great. our that power. has we this, still but do think that $XXX if and I is we're -- gross our at is chance in profit to we going the there's sitting still believe $X,XXX, bottom, with could So

everything diluted does Now bit and we're about a got by now think get talking because through I we be from can be little this actually forward. to earnings of and that this build able we've sales back to GPUs. able overhang base ability But that the grow to power this up do grow our same-store point

And the question on dollar... Okay. quick

little that, too, Adam had a more with to bit you, share on Bret.

add to to MSRP the X% of that. incentives kind we X.X%. Right of XX% and Pre-Covid, we've range. now, climbed XX% to about a year slowly the seeing through Just to running of were kind as percentage in

of two, So make stepping you XXs. of that the if to at also some little whether $X,XXX a decreased as about X% supply, So OEMs the expect expect but sort day to car bit average of of to another the price levels delta offset we a sense? could with then selling we mid- be there's take X%, incentive late based pre-COVID of be Does we up that well. to between the $X,XXX to on levels kind sequentially,

get can recovery? some a that that CDK the that timing to piece going is back business maybe is or bring $X.XX, you there if fall On you and as as insurance within this far year interruption

work is claim take around through. going does put Bret, Tina. our some and cyber We that work have It that. do to obviously carriers this that with are and time Yes, together insurance to

anything hopefully, So something there's but didn't we second the in record there, quarter.

next of question is Bank Our America. from Murphy John with

for I questions you two guys. just had

just sell then sort sell management? I fleet on vehicles fleet about into what's management, something and then here business the them business? and Inc. the take the of them. dovetail on retail fleet here. of you you I'm Wheels able the kind and you're mean does think where when you out tie into acquisition your manage Is them general or how it new to Brian, the of First, up curious, it core

me Yes. this, I Chris in shot jump may me little have just a let let on bit -- this. a take -- at but

Okay.

relationship, think in at importantly, the most first. synergies I we the look

service retail very teams service on high to customers all us our levels they have a driveway get. probably to of lithium be drivers. I able the even it of And is However, demands of because meet for expectations different than challenge their those what level

for in maybe can and job for which, and ability if channels most important to [indiscernible] customers. relationships pay that they more of market with And be year, help XXX,XXX-plus highest and service, pipeline to those, to attract synergies fleets somewhere can don't vehicles competitors in and grow now build a vehicles a those the to a to Driveway, an the are to bond. So primarily partnership have. divest some vehicles That's build payers Ultimately, wheels, the thing. able which that importantly sell but GreenCars the embellish them good we've They us Lithia obviously, got we'll do okay? have be around the new to we

through and start we could or long multiple all okay? with that those where If we lift it's today. all massive cars, retailers maintain some business a different parts That's service to maintained they And networks addition, of In the of get that that, synergies. term. is

are contemplated, it when at we provide even their what, consumers that like were to them, The We I they a off my other almost talk we never neat ago tolls now Their ability service into I, part the as done about business the the dollar provide with my have and got apps, with pricing drivers small drivers. amounts, the to these level people and subscription where selling inspired, met want services services their their their get toll service XX contracts, a where methodology but app. services I XX, what when APIs we more try and the contracts says, on to to Chris relationships, to of dollar okay? negotiated is based months amounts. I customer you about do is that such big be

to go on discounts have in some pay or into to those that, their they Okay, do And municipalities, to I then negotiate spot municipalities, the with don't one discounts okay? of to that along everything and users. than the they to pass want toll companies for have rather that

exciting. or have. than and portals what in pretty like further Lithia believe it's greater be be with There's ties could subscription we So probably services, and monetizable touch to to dozen able growth and creating points currently half access our a we more products F&I that. our conduit a examples to consumers Driveway within be our that

XX% to And very better look looking discussion your not what's is That's you rates, really look at industry but the back incredibly a about face something -- helpful. an happened maybe a GPUs and better, too if I could years, much, guys the is in that And picky mean, about strong basically addressed And but consumer. as over real And at last is you've that just to been and and effectively, we about just basis and X.X and X the question, that's down. obvious a ASP. time rate you're a think have how you come second say benefit point record ASPs which rates people they've just no on more everything the is or question incremental done profits. frame be There's almost they're sustainable, not or I sustainable have up increase of interest that. the putting big that here auto little in

do think just what So this. be guys the about of curious in What's here? guys your could take? and potential as on assumptions the GPU good you you're of think -- I'm I how this, side on ASP your maybe conservative And face the

maybe and with I I'll debt. just side, have the this John, interest mean start right, obviously our several variable of is we on business, Tina.

think drives don't they're if important tailwind forward to payment a And and good is rates is tailwind in to strength we impacted, And but know always get can shoppers. that is. you I that from as that business. gives think get consumer that's that for there add perspective. what monthly monthly and that I going commented affordability, around on a consumers since that, anything past something payment we've then affordability that our around talked So have cut Bryan, it's I about the we've

impact when to operational team's from think Adam presidents of we lot and His who I'm a and John, regional spend sitting think the his vice magnitude focus our with focus of next and organization, career to and presidents. here it the I an manufacturers.

and and of maintaining total have new We and of inventory well talking about built opportunity this. ecosystem there in still in swinging, if used at almost okay? between able improve fairly our that now velocity be of terms billion We're inventory that's they our are rates, out while get $X rate, control $XXX savings talking improving to. compounded tons growth rate by spoke turns cut and Tina our just almost the interest else, to to that And being people But is million same in with today's things nothing year-end, able that inventory and to we're the that.

next Our question from Douglas is Evercore. with Dutton

your could QX that million loan, the XX% you think buyback back in $XXX would are Or there quarter very of as strong big QX, cash? what on the had norm? in buyback. free that not normal about we Just question -- going be go level Obviously, high going repo. to forward, to Do Is there, 'XX. new you handicap a to XX% X-figure a the

allocation, -- stock we're that as it. Yes. there balancing Tina. I about When and is mean, well price think perspective valuations in how for it we capital is seeing M&A an really opportunistic can us from out as this the be we

know, running perspective, always strategy, our at what to the and continuing that footprint. so grow as our And our core math opportunities and to really we and we see you look the from strong business value M&A, it's is are. as

States, the in here in there's especially the United America, market. North where is in opportunity of lots fragmented focus Our

So a that stock we is compared don't activity can purchase versus that to make of really It's that what there set at sort on our we looking really the amount dollar from out perspective. M&A our approach. opportunistic

in earnings. this well, close mind me is marketplace on Do Doug. The too? you as little to embellish bit a to years Keep that average earnings X acquisitions, inflated pricing want on

expect when through. that subside, appealing not because will able on what and to that's we things that we okay? pretty opportunity, We look the And high So at think grow expecting standard and think do at years we buy to look returns be I that our typically for opportunistic continue earnings, expect to to pay that billion $X why billion we the buyers, you already competitive line is and to in you find are we'll somewhere got and acquisitions, us But between it? $X come.

importantly of trades that lowest the now sector. stock our one More value than in that, the at, the

we're at earnings also potential, trough at So multiples. okay? we trough say We're would

EPS as on every forecasting the in now somewhere now mid- a this of that ratio, the very of We've look rather in around the we X:X. probability in clear I clear with at our is us of from slide stores that about disseminated organization. think we we've look through And in right walked it. we is and around can $X.XX the X X.X:X that with about can that billion that on acquisitions reconciliation and It's the that we're I that because [indiscernible] than success within got through revenue the when well capital so of that our see fact $X for room $X potential We've just say the $X.XX range, can confidently here updated as quite you you. allocated long-term XX, to a Page $X.XX the okay? high the the to come So

much okay, to $X.XX the idea about $X.XX, of another That's Our financing the We repurchases, efficiencies to be penalized us okay? capital $X.XX capital to if talk at ] to share and operations Tina for [ this as maturity Chuck massive about, using going of spoke additional. to amounts of we're gets just well. that what $X.XX some talked especially

built come see space Chris to adjacency is anyone Lithia in as we'll than Wheels Pinewood know Driveway advantages take the long true ecosystem And will and that, working starting that We things that what haven't share don't world that built through. which now even of And able potential I else we've X the under we the really over is in going years. Adam's on leadership, even into the realize an realization potential XX as it totally to to last to has. that that you're and got what the that and with what operation different be new going, that's and the with be the can of keep

Our question Langan is next with from Wells Fargo. Colin

follow coming new your F&I. just include up I addressed when sort comments I to That on you you GPU think, at Can only, on $XXX down said sort of did quoted $XXX. of you

GPU you've think normalize pre-COVID release how would think clearly pretty talked alone levels. past, in you I at new the

So that F&I it part if changed? of so of that? offsetting changed, it -- it's has some changed? hasn't just Is if is And why

making certified vehicles, auto on was to a $XXX said which levels going auto what X we're comment, And on okay? to where value that we're I they the to car recovery turning we're that $X,XXX to okay, $X,XXX, So to -- the into when more going about as That Lithia, do are GPU, We that and $XXX than be we at used we below use. we're new way between okay, car. more still we value some think at Xx cars in fast, can is about pre-COVID, go $X,XXX. $XXX my get at depressed get of every were do you to and there, if total at believe

lot think there. a there's opportunity we So that of

I landing maybe not real we abrupt then But drop okay? new $X,XXX But still that's If to a today, landing. we're upside. So in I changes been stage, to to feel some than think comfortable say, real assuming rather $XXX factor at where close we would with it's return can of it's $XXX $XXX probably, and prevent the used but that softer things, macro we're a this pretty normalization sitting that, vehicles vehicles.

helpful you it. $X.XX then And CDK clarification. mentioned a Got That's impact.

kind was of insurance a How about question is $X.XX portion lost the how think I of in that recovery, that's the recovery. should much sales that sort of earlier any Is instead maybe benefit things into think to good recoverable? was we sort you're just are I in deferred? quarter wondering QX be not lost and should of it see we most of going what thinking of of [indiscernible] How kind about as sort maybe

Yes.

XX wait buy for a XX% service be weeks, only to markets, around But typically They buy may days of okay? bit. okay? that for to of portion that understand to making you would of So and event, probably of remember that typically I they customers new buy as research to is I they this levels. may It was buy. X that, be less think XX around this, ultimately, even want those it when okay? So point, would just backlogged probably lot industry stores recoverable. on may bit And service XX, it a have wasn't little CDK little and within States, bought, the A service the car. to though are their especially X of our XX% of another even car used on terms the customers is isolated may a really hours it parts was and it, buy to $X.XX. So than $X.XX. helps in say probably little customers in But as they $X.XX though wait in decision production Most had because the CDK that don't United majority

$X.XX don't sitting ton that's that believe I unfortunately. of So there, a there's out

with Ron Our next Citigroup. is question from Josey

James Michael question is strategies. for on focused This Two-part Ron. on your here evolving omnichannel

can any up, seeing update XXx the rates TAM, ROI GreenCars same at talk underlying in you're sales are shifts broader time, while and conversions investments your how cutting first online marketing to the channels? about any Secondly, environment? burn by you Driveway you across that customer tackle on XX%? or And balancing So online digital competitive

quite our pleased Driveway GreenCars our pretty so consistent our when I and about We're channels. top reducing staying to think marketing that we over XX%. is of funnel budgets see think by while

which and our again get we the can last far, massively. turn congratulate funnel score now, we're ratio, relative what teams bottom grow you customers business XXx afterburners Google okay? that to be and what Driveway our referral on Driveway customers, start a I of got and is ability to customers at so with shift, are year. X.X. to touch, we're repeat that our or that meaning you come That's Year-to-date, typically GreenCars our of is in and funnel and we've top improve and a used now how call because satisfaction, with golden than the what to massive retention GreenCars pleased think channels satisfied Driveway. was to struggling massive we ready XX-plus of were That's We where access more were X.X are the percent We a seeing new back core that we our that. we're businesses that [indiscernible] the XXx at and GreenCars okay? what of those still both So customer

it's the be of to transparent, to So able to a with but exciting built simple overall still ecosystem. that's built, our to network an we've really convenient experience a and able cars the used leverage to and access our as start that's procurement take and channel especially we great be have, really way that hold in ability to this,

with JPMorgan. Our next question from a Gupta Rajat is follow-up

like going the like I numbers of any sure U.K. car numbers that GPUs I'm mix U.K. that like in about a was up we same-store were I second type but big liquidation dip. -- events reduction? It But how just should curious, had impact. forward? there looks might car in on mean the just question onetime the And driven were bit I a the a used have used like GPUs time think overall took quarter. the had sequentially, a

on great opportunity Raj, back cars to that true or yield do was But to car onetimes growth. no, market get and auto have That those summation back there for you lift GPUs was big a it. But think anything and way will selling we there's that conditions. that nailed again, value there We overall had operationally, you our wasn't that so any market sensitive to they're quickly, profits conditions. that, less up the like used keeping turn and GPUs. that

to end session. reached question-and-answer closing call Bryan the for the to DeBoer and the of we've would gentlemen, I Ladies like back turn remarks.

quarter in you, for the seeing forward results. us the XX-day talk you updating take Thank We of today. really Bye-bye. look We'll hold. the in third again again to joining impacts October for everyone, plan really

This concludes today's participation. conference. Thanks for your

your at time. may this lines disconnect You