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CarMax's (KMX) Q2 Earnings In-line, Rise 11.4% Y/Y

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CarMax Inc. (KMX - Free Report) , headquartered in Richmond, VA, operates as a specialty retailer of used vehicles as well as new vehicles. It is one of the largest retailers of used vehicles in the U.S. The company is poised to benefit from its focus on the used-car market, which helps it to outperform the industry.

Furthermore, CarMax pursues an aggressive store growth policy, driven by improvements in the sales environment in the U.S. New stores help the company to penetrate into new markets and thus, boost its results. However, rising competition in the used-car market is highly challenging for the company.

Estimate Trend & Surprise History

Investors should note that the second-quarter (ended Aug 31, 2016) fiscal 2017 earnings estimate for CarMax has decreased by a penny over last 30 days.

The company has delivered mixed earnings surprises in recent quarters. It has beaten the Zacks Consensus Estimate in 2 of the trailing 4 quarters with an average beat of around 0.01%. Thus, investors have been eagerly awaiting CarMax’s latest earnings report.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings

CarMax’s adjusted earnings increased 11.4% to 88 cents per share in the second quarter of fiscal 2017, in-line with the Zacks Consensus Estimate.

Revenues

CarMax reported revenues of $4 billion, up 2.9% year over year. However, revenues missed the Zacks Consensus Estimate of $4.13 billion.

Key Stats/Developments to Note

During the second quarter of fiscal 2017, CarMax opened 3 stores, of which two were in new markets (El Paso, TX and Bristol, TN). Subsequent to the end of the quarter, the company opened a store in Boise, ID, which is a new market. In fiscal 2017, the company plan to open 15 stores.

Zacks Rank

Currently, CarMax has a Zacks Rank #3 (Hold), but that could change following its earnings report which has just released.Meanwhile, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Market Reaction

CarMax’s shares fell 5.5% in pre-market trading so far following the release. Clearly, the initial reaction to the report is negative.

CARMAX GP (CC) Price and EPS Surprise

 

CARMAX GP (CC) Price and EPS Surprise | CARMAX GP (CC) Quote

Check back later for our full write up on CarMax’s earnings report!

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