Lithia Motors Inc. reported its first-quarter net income dropped by one-third as the auto group saw double-digit declines in new- and used-vehicle gross profit per retail unit and lower average used-vehicle selling prices.

The Medford, Oregon retailer reported a 4% increase in revenue, hitting a first-quarter record of $6.97 billion. However, net income fell 33% to $229.6 million.

Lithia reported selling 67,796 new vehicles, up 4.4%, and 78,142 used vehicles, up 6%, in the first quarter. But that was offset by a 20% decline in the average gross profit per new retail vehicle to $4,924.

Used-vehicle average gross profits fell even more, plunging 30% to $2,120.

Still, Lithia reported the average selling price for new retail vehicles rose 2.6% to $48,364, while the average selling price for used retail vehicles fell 6% to $28,506.

The retailer reported it has acquired $16 billion in annualized revenue since July 2020.

"Our solid first quarter performance demonstrates the durability and diversity of our business model. With a wide selection of products and services for all affordability levels, we are positioned well to meet consumer needs in-store or online through Driveway and other omnichannel store offerings," said Bryan DeBoer, Lithia & Driveway, president and CEO. "As we navigate the current environment, we continue to find accretive acquisitions that expand our network, grow DFC, which will increase our profitability in the long-term, and progress toward the goals in our 2025 Plan. Our strong balance sheet and significant capital engine position us well to further consolidate the industry."

Lithia surpassed AutoNation in new vehicles sold in 2022 after it purchased Jardine Motors Group in the United Kingdom. The acquisition added over three dozen U.K. new vehicle dealerships to Lithia’s portfolio and is expected to add over $2 billion to its annual revenue.

The company added an Acura store in Canada in February. However, Lithia also sold an unspecified dealership in the first quarter. The store reportedly generated revenue of $46 million in the past year.