CarMax Earnings Fail to Impress
CarMax reported disappointing fiscal first-quarter financial results before the markets opened on Tuesday.
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CarMax Inc. (NYSE: KMX) reported its fiscal first-quarter financial results before the markets opened on Tuesday. The company said that it had $0.90 in earnings per share (EPS) on $4.13 billion in revenue. Consensus estimates from Thomson Reuters were $0.92 in EPS on revenue of $4.19 billion. In the same period of last year, it posted EPS of $0.86 and $4.01 billion in revenue.
The comparable store used unit sales rose 0.2% compared to the prior year’s first quarter. The comparable store sales performance reflected the combination of an improvement in conversion that more than offset a decrease in store traffic.
Wholesale vehicle unit sales grew 1.8% versus the first quarter of fiscal 2016, primarily driven by the growth in our store base.
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Total gross profit increased 5.3% versus last year’s first quarter to $572.6 million. Used vehicle gross profit rose 4.1%, driven by the 4.0% increase in total used unit sales.
Compared with last year’s first quarter, CarMax Auto Finance income declined 7.7% to $100.8 million. The decline was due to an increase in the provision for loan losses and a lower total interest margin percentage, partially offset by the effects of an increase in average managed receivables.
On the books, CarMax’s cash and cash equivalents totaled $52.6 million at the end of the quarter, compared to $351.7 million at the end of the same period of last year.
Shares of CarMax closed Monday up 1% at $50.63, with a consensus analyst price target of $60.81 and a 52-week trading range of $41.25 to $69.15. Following the release of the earnings report, the stock was down 4.5% at $48.35 in Tuesday’s premarket.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
