Lithia Motors Inc. said it expects first quarter net income to slip as much as 19 percent from showroom closures amid the coronavirus pandemic.
The third-largest new-vehicle retailer in the U.S. said it cut staffing by 37 percent, mainly as furloughs. Lithia employs about 14,000 people, so the cut has impacted roughly 5,100 positions.
Previously, Lithia disclosed that it had begun cutting staff, but did not disclose the figure.
“We expect to be able to have team members return to work as future volume levels recover,” the company said in a government filing.
The Medford, Ore., retailer anticipates net income to decline to a $45.5 million to $47 million range, compared with $56.4 million posted during the first quarter of 2019, according to the filing.
The company expects to report a 10 percent decline in new-vehicle sales when it releases earnings, slated for April 22.
Lithia CEO Bryan DeBoer said in a statement late Monday that between cash, available credit and unfinanced real estate, Lithia carries more than $1 billion in total liquidity to leverage during the crisis.
“We continue to enact prudent and decisive cost saving measures to respond to this environment,” DeBoer said.
In the fourth quarter of 2019, net income for Lithia grew 14 percent to $68 million, a record-high for the retailer. The first quarter of 2020 began on a similar trajectory, Lithia said in the filing.
