Cars and Drivers
Why CarMax's Record Q2 Earnings Were Not Enough
Published:
Last Updated:
CarMax Inc. (NYSE: KMX) reported its fiscal second-quarter financial results before the markets opened on Tuesday. The company had $0.82 in earnings per share (EPS) on $3.88 billion in revenue. That compared to consensus estimates from Thomson Reuters that call for $0.76 in EPS on $3.96 billion in revenue. The same period from the previous year had $0.64 in EPS on $3.60 billion in revenue.
Total used vehicle unit sales grew 9.2% and comparable store used unit sales increased 4.6% over the prior year’s second quarter. Comparable store used unit sales were driven by improved conversion, which benefited from the strong execution of store teams.
During the fiscal second quarter, the company opened four stores, including three stores in existing markets and one in a new market. Subsequent to the end of the quarter, CarMax opened its sixth store in Houston and second store in Minneapolis. Currently, the company plans to open about eight new locations.
At the same time, CarMax repurchased 3.9 million shares of common stock for $249.8 million pursuant to its share repurchase program. At the end of August, it had $2.0 billion remaining available for repurchase under the program.
Tom Folliard, president and CEO of CarMax, commented on earnings:
We are pleased to report record second quarter results. The continued expansion of our store base and growth across our used, wholesale and CAF operations, as well as our share repurchase program, all contributed to our record second quarter earnings per share.
On the books, the company had cash and cash equivalents totaling $100.5 million, compared to $364.6 million at the same time in the previous year.
Shares of CarMax dropped more than 9% to $56.84 just after Tuesday’s opening bell. Its 52-week trading range is $43.27 to $75.40, and the consensus analyst price target is $75.27.
ALSO READ: 9 Analyst Stock Picks Under $10 With Huge Upside Calls
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.