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CarMax (KMX) Q2 Earnings Miss on Weak GPU From Both Segments
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CarMax Inc. (KMX - Free Report) reported second-quarter fiscal 2022 (ended Aug 31, 2021) net earnings per share of $1.72, missing the Zacks Consensus Estimate of $1.95. This underperformance can be attributed to lower-than-anticipated gross profit per unit from the company’s used and wholesale vehicles segment. The bottom line also declined from $1.79 per share recorded in the year-ago period.
The auto retailer registered revenues of $7,988.4 million for the August-end quarter, beating the Zacks Consensus Estimate of $7,098 million. Also, the top line recorded a 48.7% year-over-year increase.
CarMax’s used-vehicle net sales summed $6,104.4 million for the reported quarter, up 39.1% year over year on an increase in average retail selling prices and higher unit sales. The units sold in this segment edged up 6.7% year over year to 231,797 vehicles. The average selling price of used vehicles soared 30.8% from the year-ago quarter to $26,141. Comparable store used-vehicle units grew 6.2%, while revenues climbed 38.8% from the prior-year level. On a discouraging note, used-vehicle gross profit per unit (GPU) came in at $2,185, declining from the prior-year quarter’s $2,214 and lagging the Zacks Consensus Estimate of $2,269.
For the fiscal second quarter, wholesale vehicle revenues skyrocketed 107.7% from the year-ago level to $1,701.6 million. The reported figure also handily beat the Zacks Consensus Estimate of $1,110 million. Units sold and average selling price surged 41.4% and 47.7% year over year to 188,098 and $8,701, respectively. Yet, wholesale vehicle GPU came in at $1,005, which declined from the year-ago period’s $1,086 and fell short of the consensus mark of $1,075.
Other sales and revenues rose 11.3% year over year to $182.4 million for the fiscal second quarter.
CarMax Auto Finance registered a 35.8% year-over-year uptick in income to $200 million for the August-end quarter, chiefly reflecting an increase in net interest margin and average managed receivables, partially offset by increased loan loss provisions on a year-over-year basis.
Other Tidbits
Selling, general and administrative expenses flared up 30% from the prior-year quarter to $574.3 million. The firm had cash/cash equivalents and long-term debt of $58.1 million and $2,190 million, respectively, as of Aug 31, 2021.
CarMax — which shares space with O’Reilly Automotive (ORLY - Free Report) , Advance Auto Parts (AAP - Free Report) and AutoZone (AZO - Free Report) in the same industry — bought back 1.8 million shares of common stock for $200 million under the share-repurchase program during the fiscal second quarter. As of Aug 31, 2021, it had $991.5 million remaining under the share-repurchase authorization.
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CarMax (KMX) Q2 Earnings Miss on Weak GPU From Both Segments
CarMax Inc. (KMX - Free Report) reported second-quarter fiscal 2022 (ended Aug 31, 2021) net earnings per share of $1.72, missing the Zacks Consensus Estimate of $1.95. This underperformance can be attributed to lower-than-anticipated gross profit per unit from the company’s used and wholesale vehicles segment. The bottom line also declined from $1.79 per share recorded in the year-ago period.
The auto retailer registered revenues of $7,988.4 million for the August-end quarter, beating the Zacks Consensus Estimate of $7,098 million. Also, the top line recorded a 48.7% year-over-year increase.
CarMax, Inc. Price, Consensus and EPS Surprise
CarMax, Inc. price-consensus-eps-surprise-chart | CarMax, Inc. Quote
Segmental Performance
CarMax’s used-vehicle net sales summed $6,104.4 million for the reported quarter, up 39.1% year over year on an increase in average retail selling prices and higher unit sales. The units sold in this segment edged up 6.7% year over year to 231,797 vehicles. The average selling price of used vehicles soared 30.8% from the year-ago quarter to $26,141. Comparable store used-vehicle units grew 6.2%, while revenues climbed 38.8% from the prior-year level. On a discouraging note, used-vehicle gross profit per unit (GPU) came in at $2,185, declining from the prior-year quarter’s $2,214 and lagging the Zacks Consensus Estimate of $2,269.
For the fiscal second quarter, wholesale vehicle revenues skyrocketed 107.7% from the year-ago level to $1,701.6 million. The reported figure also handily beat the Zacks Consensus Estimate of $1,110 million. Units sold and average selling price surged 41.4% and 47.7% year over year to 188,098 and $8,701, respectively. Yet, wholesale vehicle GPU came in at $1,005, which declined from the year-ago period’s $1,086 and fell short of the consensus mark of $1,075.
Other sales and revenues rose 11.3% year over year to $182.4 million for the fiscal second quarter.
CarMax Auto Finance registered a 35.8% year-over-year uptick in income to $200 million for the August-end quarter, chiefly reflecting an increase in net interest margin and average managed receivables, partially offset by increased loan loss provisions on a year-over-year basis.
Other Tidbits
Selling, general and administrative expenses flared up 30% from the prior-year quarter to $574.3 million. The firm had cash/cash equivalents and long-term debt of $58.1 million and $2,190 million, respectively, as of Aug 31, 2021.
CarMax — which shares space with O’Reilly Automotive (ORLY - Free Report) , Advance Auto Parts (AAP - Free Report) and AutoZone (AZO - Free Report) in the same industry — bought back 1.8 million shares of common stock for $200 million under the share-repurchase program during the fiscal second quarter. As of Aug 31, 2021, it had $991.5 million remaining under the share-repurchase authorization.
During the fiscal second quarter, the Zacks Rank #3 (Hold) company opened three new locations and aims to open 10 new stores in fiscal 2022. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.