CarMax (KMX) Q3 Earnings Miss, Revenues Beat, Both Up Y/Y

CarMax Inc. (NYSE:KMX) posted earnings per share of 81 cents in the third quarter of fiscal 2018 (ended Nov 30, 2017), reflecting an increase of 12.5% from 72 cents earned a year ago. Earnings missed the Zacks Consensus Estimate of 82 cents as well.

Net sales and operating revenues in the reported quarter increased 11% year over year to $4.11 billion. This figure too surpassed the Zacks Consensus Estimate of $4 billion.

Used vehicle revenues increased 10.8% to $3.4 billion in the reported quarter, driven by higher unit sales, which increased 8.2% to 169,648 vehicles. Comparable-store used vehicle unit sales rose 2.7% in the quarter.

Wholesale vehicle revenues grew 13.2% to $552.8 million in the quarter. Unit sales increased 9.1% to 100,332 vehicles. Average selling price of wholesale vehicles rose 3.2% to $5,268.

Other sales and revenues grew 5.1% year over year. The company’s extended protection plan (EPP) revenues rallied 9.8%.

CarMax Auto Finance (CAF) reported an increase of 15.1% in income to $102.8 million in third-quarter fiscal 2018.

Store Openings

During the third quarter, CarMax opened five stores, one each in Philadelphia, Las Vegas, San Francisco and Seattle. The fifth was opened in Tyler, TX, a new television market.

Share Repurchase Program

In the quarter under review, CarMax spent $107.2 million to repurchase 1.5 million shares under the existing share buyback program. As of Nov 30, 2017, the company had $1.14 billion of authorization remaining under its share repurchase program.

Financial Position

CarMax had cash and cash equivalents of $26.3 million as of Nov 30, 2017, increasing from $23.7 million as of Nov 30, 2016. Long term debt (excluding current position) escalated to $1.04 billion as of Nov 30, 2017 from $888.2 million as of Nov 30, 2016.

CarMax currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked automobile stocks in the same space are Allison Transmission Holdings, Inc. (NYSE:ALSN) , American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) and Wabco Holdings Inc. (NYSE:WBC) . While Allison Transmission and Volvo sport a Zacks Rank #1, Wabco Holdings carries a Zacks Rank #2 (Buy).

Allison Transmission has a long-term growth rate of 10%. The company’s shares have gained 27.9% year to date.

American Axle & Manufacturing has a long-term growth rate of 8.1%. The company’s shares have gained 7.3% over the past three months.

Wabco Holdings has a long-term growth rate of 15%. Its shares have rallied 35.2% on a year-to-date basis.

CarMax Inc Price, Consensus and EPS Surprise

CarMax Inc Price, Consensus and EPS Surprise | CarMax Inc Quote

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