Good morning, and welcome to the Lithia Motors Fourth Quarter 2017 Conference Call.
(Forward-Looking Cautionary Statements)
Management may also discuss non-GAAP financial measures. Please refer to the text of the earnings release for a reconciliation of comparable GAAP measures.
Management will provide prepared remarks and then open the call for questions. I will now introduce Bryan DeBoer, President and CEO. Mr. DeBoer, you may begin.
Good morning, and thank you for joining us today. On the call with me are Chris Holzshu, our EVP; and John North, SVP and CFO.
Earlier today we reported adjusted fourth quarter earnings of $2.15 per share, which marks our 29th consecutive quarter of record performance. We are excited to have added our -- an 11th digit to our annual revenues, as we exceeded $10 billion this year. We increased quarterly revenue 18% and adjusted earnings 15% over our 2016 results, despite a sequentially lower full year SAAR of $17.1 million.
Fueled by our mission, growth powered by people, our organization is poised to continue its upward growth trajectory, regardless of new vehicle market conditions. We expect further moderation in SAAR for 2018 in a range of 16.5 million to 17 million units.
For the last several years the hallmark of our success has been high performing, empowered entrepreneurs making decisions closest to our consumers. We have more than tripled the size of our company, including purchasing over $6 billion in annualized revenues in the past four years alone. These acquisitions are strong franchise assets that historically underperformed their earnings potential. Despite the acquired stores' dilutive effects, we have maintained our strong performance in SG&A to growth in operating margin. We continue to identify, develop and challenge our leaders to capture the considerable earnings dry powder created from our value-based mergers and acquisition strategy.
From an operational perspective on a same-store basis, total sales grew 3%. New vehicle sales were up 3%. Retail used vehicle sales increased over 2%. F&I increased 8% and service and part sales were up 4%. We sold 67 used vehicles per store per month, up from 66 units in the comparable period last year. In the quarter, same-store certified units decreased 7%, core units increased 8% and value auto units increased 3%. Again, we continued to make incremental progress towards our goal of 85 used units per store, while offsetting the effects of our recent acquisitions that sell fewer than 40 units per month at the time of acquisition.
We continue to see growth in our service, body and parts business, which grew 4% despite one fewer service day compared to last year, which negatively impacted revenue by approximately 2%.
Last month our executive team and operational group leaders assembled in downtown Los Angeles at our new Toyota store, where we reviewed and modified strategies on how to capture the over $200 million in incremental dry powder that is available to our existing store base. The resulting efforts continue to focus on customer-driven, top line growth while effectively managing costs. Chris
President and CEO
SVP and CFO
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