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CarMax (KMX) Q1 Earnings Beat Estimates, Jump 8,666.7% Y/Y

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CarMax Inc. (KMX - Free Report) reported first-quarter fiscal 2022 (ended May 31, 2021) net earnings per share of $2.63, surpassing the Zacks Consensus Estimate of $1.61. This outperformance can be attributed to higher-than-anticipated sales from the company’s used and wholesale vehicles segment. Further, the bottom line skyrocketed 8,666.7% year over year.

The auto retailer registered revenues of $7,697.6 million for the May-end quarter, beating the Zacks Consensus Estimate of $6,194 million. Moreover, the top line recorded a 138.4% year-over-year increase.

During the fiscal first quarter, the Zacks Rank #3 (Hold) company opened two new locations and aims to open 10 new stores in fiscal 2022. Per its long-term targets (unveiled last month), CarMax — which shares space with O’Reilly Automotive (ORLY - Free Report) , Advance Auto Parts (AAP - Free Report) and AutoZone (AZO - Free Report) — forecasts $33 billion revenues and 2 million units sold per year by fiscal 2026. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CarMax, Inc. Price, Consensus and EPS Surprise

CarMax, Inc. Price, Consensus and EPS Surprise

CarMax, Inc. price-consensus-eps-surprise-chart | CarMax, Inc. Quote

Segmental Performance

CarMax’s used-vehicle net sales summed $6,157.3 million for the reported quarter, jumping 121% year over year on increase in average retail selling prices and higher unit sales. The reported figure also beat the consensus mark of $5,150 million. The units sold in this segment surged 100.6% year over year to 270,799 vehicles. The average selling price of used vehicles increased 10.7% from the year-ago quarter to $22,533. The used-vehicle gross profit per unit came in at $2,205, higher than the prior-year quarter’s $1,937. Comparable store used-vehicle units soared 99.1%, while revenues climbed 120.6% from the prior-year level.

For the fiscal first quarter, wholesale vehicle revenues skyrocketed 300.9% from the year-ago level to $1,374.4 million. The reported figure also handily beat the Zacks Consensus Estimate of $692 million. Units sold and average selling price climbed 186.6% and 42.2% year over year to 181,389 and $7,266, respectively. Wholesale vehicle gross profit per unit came in at $1,025, up from the year-ago period’s $978.

Other sales and revenues grew 66.4% year over year to $165.9 million for the fiscal first quarter.

CarMax Auto Finance registered a whopping 374% year-over-year jump in income to $241.7 million for the May-end quarter, chiefly reflecting a fall in the provision for loan losses to $24.4 million from the year-earlier quarter’s $122 million alongside an increase in net interest margin and average managed receivables.

Costs, Financials and Share Buyback

Selling, general and administrative expenses flared up 70.5% from the prior-year quarter to $554.1 million. CarMax had cash and cash equivalents of $378 million as of May 31, 2021 compared with $658 million in the corresponding period of 2020. Long-term debt (excluding the current portion) amounted to $1,320.2 million, reflecting a decrease from the year-ago period’s $1,693.8 million.

CarMax repurchased 1 million shares of common stock for $124.5 million under the share-repurchase program during the fiscal first quarter. As of May 31, 2021, it had $1.21 billion remaining under the share-repurchase authorization.

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