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CarMax Q2 Earnings Miss Expectations, Revenues Decline Y/Y
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CarMax Inc. (KMX - Free Report) reported second-quarter fiscal 2025 (ended Aug. 31, 2024) adjusted earnings per share of 85 cents, which missed the Zacks Consensus Estimate of 86 cents. The bottom line, however, rose from 75 cents per share recorded in the year-ago period. The auto retailer registered revenues of $7 billion in the quarter under review, which beat the Zacks Consensus Estimate of $6.85 billion. The top line, however, contracted 0.9% year over year.
CarMax’s used-vehicle net sales totaled $5.68 billion for the reported quarter, up 1.5% year over year, owing to a rise in unit sales. The units sold in this segment rose 5.1% year over year to 211,020 vehicles and topped our forecast of 198,026 units. The average selling price (ASP) of used vehicles tailed off 4.6% from the year-ago quarter to $26,245 and missed our projection of $26,707. Amid higher-than-expected units sold, revenues from the segment surpassed our estimate of $5.29 billion.
Comparable store used-vehicle units rose 4.3% while revenues fell 0.2% from the prior-year level. Used-vehicle gross profit per unit (GPU) came in at $2,269, which increased from the prior-year quarter’s $2,251 and beat our estimate of $2,247.4.
For the fiscal second quarter, wholesale vehicle revenues contracted 12.7 % from the year-ago level to $1.15 billion. The reported figure was below our projection of $1.29 billion due to lower-than-anticipated units sold and ASP. Units sold decreased 0.3% to 141,458 (versus our forecast of 149,007), and the ASP dipped 12.9% to $7,768 (versus our estimate of $8,695). Wholesale vehicle GPU came in at $975, which rose from the year-ago period’s $963 but missed our estimate of $1,014.6.
Other sales and revenues increased 13.2% year over year to $182 million, which beat our estimate of $168.2 million. CarMax Auto Finance income declined 14.4% year over year to $115.6 million at the end of the fiscal second quarter.
Other Tidbits
Selling, general and administrative expenses increased 4.3% from the prior-year quarter to $610.6 million. The firm had cash/cash equivalents and long-term debt of $524.7 million and $1.59 billion, respectively, as of Aug. 31, 2024.
During the fiscal second quarter, CarMax repurchased shares worth $106.1 million. As of Aug. 31, 2024, it had $2.15 billion remaining under the share repurchase authorization.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.
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CarMax Q2 Earnings Miss Expectations, Revenues Decline Y/Y
CarMax Inc. (KMX - Free Report) reported second-quarter fiscal 2025 (ended Aug. 31, 2024) adjusted earnings per share of 85 cents, which missed the Zacks Consensus Estimate of 86 cents. The bottom line, however, rose from 75 cents per share recorded in the year-ago period. The auto retailer registered revenues of $7 billion in the quarter under review, which beat the Zacks Consensus Estimate of $6.85 billion. The top line, however, contracted 0.9% year over year.
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 totaled $5.68 billion for the reported quarter, up 1.5% year over year, owing to a rise in unit sales. The units sold in this segment rose 5.1% year over year to 211,020 vehicles and topped our forecast of 198,026 units. The average selling price (ASP) of used vehicles tailed off 4.6% from the year-ago quarter to $26,245 and missed our projection of $26,707. Amid higher-than-expected units sold, revenues from the segment surpassed our estimate of $5.29 billion.
Comparable store used-vehicle units rose 4.3% while revenues fell 0.2% from the prior-year level. Used-vehicle gross profit per unit (GPU) came in at $2,269, which increased from the prior-year quarter’s $2,251 and beat our estimate of $2,247.4.
For the fiscal second quarter, wholesale vehicle revenues contracted 12.7 % from the year-ago level to $1.15 billion. The reported figure was below our projection of $1.29 billion due to lower-than-anticipated units sold and ASP. Units sold decreased 0.3% to 141,458 (versus our forecast of 149,007), and the ASP dipped 12.9% to $7,768 (versus our estimate of $8,695). Wholesale vehicle GPU came in at $975, which rose from the year-ago period’s $963 but missed our estimate of $1,014.6.
Other sales and revenues increased 13.2% year over year to $182 million, which beat our estimate of $168.2 million. CarMax Auto Finance income declined 14.4% year over year to $115.6 million at the end of the fiscal second quarter.
Other Tidbits
Selling, general and administrative expenses increased 4.3% from the prior-year quarter to $610.6 million. The firm had cash/cash equivalents and long-term debt of $524.7 million and $1.59 billion, respectively, as of Aug. 31, 2024.
During the fiscal second quarter, CarMax repurchased shares worth $106.1 million. As of Aug. 31, 2024, it had $2.15 billion remaining under the share repurchase authorization.
CarMax’s Zacks Rank & Key Picks
KMX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) , Blue Bird Corporation (BLBD - Free Report) and Douglas Dynamics, Inc. (PLOW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.