CarMax Falls Despite Top-Line Beat

By Chris Lange Updated Jan 13, 11:03AM EST · Published Apr 7, 10:35AM EDT

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CarMax Falls Despite Top-Line Beat — © Thinkstock

CarMax Inc. (NYSE: KMX) reported its fiscal fourth-quarter financial results before the markets opened on Thursday. The company posted $0.71 in earnings per share (EPS) on $3.71 in revenue, which compares to consensus estimates from Thomson Reuters of $0.71 in EPS on revenue of $3.68 billion. In the same period of last year, it posted EPS of $0.67 and $3.51 billion in revenue.

Net sales and operating revenues increased 5.5%, while used unit sales in comparable stores increased 0.7%. Total used unit sales rose 4.0%.

CarMax Auto Finance (CAF) income increased 2.2% to $92.3 million in the fourth quarter.

The company plans to open 15 stores in fiscal 2017.

During the fourth quarter, the company repurchased 3.0 million shares of common stock for $155.8 million. For the fiscal year, CarMax repurchased 16.3 million shares for a total of $971.2 million. At the end of February, the company had $1.40 billion remaining available for repurchase under the program.
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Tom Folliard, CEO of CarMax, commented:

While we faced a somewhat more challenging sales environment in the second half of the year, we delivered solid revenue and EPS growth in both the fourth quarter and the fiscal year, we opened a record number of stores and we made progress toward optimizing our capital structure by buying back 16.3 million shares in fiscal 2016.

On the books, cash and cash equivalents totaled $37.4 million, compared to $27.6 million in the same period of last year.

Shares of CarMax traded down 6% at $50.09 on Thursday, with a consensus analyst price target of $62.35 and a 52-week trading range of $41.25 to $74.55.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.