Sluggish Quarter Performance
CarMax Inc. (KMX) reported a bumpy fourth quarter for fiscal 2024 as its adjusted earnings of 32 cents per share fell short of the Zacks Consensus Estimate of 45 cents. This marks a decline from the year-ago figure of 44 cents.
Revenue wise, the auto retailer clocked $5.6 billion for the quarter, missing the Zacks Consensus Estimate of $5.7 billion. This represented a 1.7% decrease from the prior year.
Insight into Segmental Performance
Used-vehicle net sales took a hit, contracting by 0.7% to $4.5 billion. This was attributed to a drop in average selling price, although unit sales saw a slight increase. However, with units sold falling short of expectations at 172,057 vehicles, and ASP at $25,985, below projections, revenues from this segment failed to meet estimates.
On the flip side, wholesale vehicle revenues were down by 5.5%, reaching $974.3 million. The decrease in units sold and ASP contributed to missing the revenue projection. Yet, a closer look reveals wholesale vehicle GPU exceeded forecasts due to lower costs.
Company Standing and Future Prospects
As of February 29, 2024, CarMax reported cash/cash equivalents of $574.1 million and long-term debt of $1.6 billion. The company also repurchased shares worth $49.3 million during the quarter and has $2.36 billion left under the share repurchase authorization.
With 245 used car stores in operation, CarMax plans to set foot in fiscal 2025 with capex estimated between $500-$550 million. Moreover, the company is eyeing an ambitious goal to sell more than 2 million vehicles annually through its retail and wholesale channels by fiscal 2030.
Peer Comparison
Comparing CarMax to its competitors, O’Reilly Automotive reported growth in earnings and revenues in its recent quarter. AutoZone also surpassed estimates with an increase in earnings and net sales. However, Advance Auto Parts faced a setback with an adjusted loss per share and a decline in net revenues.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
