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CarMax (KMX) to Report Q1 Earnings: What's in the Offing?
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CarMax Inc. (KMX - Free Report) is slated to release first-quarter fiscal 2024 results on Jun 23, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 73 cents per share and $7.28 billion, respectively.
The used car dealership chain beat earnings estimates in the last reported quarter on higher-than-anticipated gross profit per unit in the used and wholesale vehicle segments. CarMax surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 0.28%. This is depicted in the graph below:
The Zacks Consensus Estimate for CarMax’s fiscal first-quarter earnings per share has been revised up by a cent in the past seven days. The bottom line projection indicates a year-over-year decline of 53.21%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 21.77%.
Factors to Note
The estimated decline in total vehicles sold by CarMax in the first quarter of fiscal 2024 is likely to have played spoilsport. The Zacks Consensus Estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 206,644 and 150,859, respectively, implying a decline from the year-ago period’s level of 240,950 and 186,307 units.
Additionally, falling average selling prices are likely to have clipped revenues further. For the May quarter, the consensus estimates for used vehicle ASP is pegged at $26,750, indicating a drop from the year-ago figure of $28,840. The consensus estimate for wholesale vehicle ASP is pegged at $8,740, indicating a fall from the year-ago figure of $11,000.
Consequently, the Zacks Consensus Estimate for CarMax’s net sales from used vehicles is $5,688 million, implying an 18.9% year-over-year decline. The Zacks Consensus Estimate for quarterly net sales of wholesale vehicles is pegged at $1,339 million, indicating a decrease from the prior-year period’s $2,117 million.
Lower year-over-year revenues, commodity cost inflation and logistical challenges are likely to have weighed on gross profits. The Zacks Consensus Estimate for quarterly gross profit from the used-vehicle segment is pegged at $459 million, implying a decline from $564 million reported in the year-earlier quarter. The consensus mark for quarterly gross profit from the wholesale vehicle segment is pegged at $149 million, suggesting a decline from $192 million reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for CarMax this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: CarMax has an Earnings ESP of -4.57%. This is because the Most Accurate Estimate of earnings is pegged 3 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
O’Reilly released first-quarter 2023 results on Apr 26. It reported adjusted earnings per share of $8.28, beating the Zacks Consensus Estimate of $8 on higher-than-expected comps growth. The bottom line increased 15.5% from $7.17 in the prior-year quarter. Quarterly revenues of $3.70 billion topped the consensus mark of $3.56 billion and were 12% higher than the prior-year figure of $3.30 billion.
For 2023, O’Reilly expects total revenues in the range of $15.2-$15.5 billion. Earnings per share are expected between $36.5 and $37. The forecast for comparable store sales growth is in the range of 4-6%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
Advance Auto reported first-quarter 2023 results on May 31. It reported adjusted earnings of 72 cents, falling 68.1% from the year-ago quarter figure and lagging the Zacks Consensus Estimate of $2.60 per share. Advance Auto generated net revenues of $3,417.6 million, lagging the Zacks Consensus Estimate of $3,427 million but increasing 1.3% from the year-ago reported figure.
Advance Auto estimates 2023 net sales in the band of $11.2-$11.3 billion. Comparable store sales are envisioned to range between negative 1% and 0%. The operating income margin is envisioned in the range of 5%-5.3%. Advance Auto expects its 2023 capex to be in the range of $250-$300 million. The company targets FCF in the range of $200-$300 million. EPS is forecast between $6 and $6.5. It aims to open 40 to 60 new stores this year.
AutoZone posted third-quarter fiscal 2023 results on May 23. It reported earnings of $34.12 per share, up 17.5% year over year and surpassed the Zacks Consensus Estimate of $30.84 per share. Net sales grew 5.8% to $4,090.5 million. However, the top line lagged the Zacks Consensus Estimate of $4,102.8 million. Gross profit increased to $2,146.1 million from the prior-year quarter’s figure of $2,006.4 million.
As of May 6, 2023, AutoZone had cash and cash equivalents of $274.9 million, up from $263 million on May 7, 2022. The total debt amounted to $7,340.5 million as of May 6, marking an increase from $6,057.4 million on May 7, 2022. Under its share repurchase program, AutoZone repurchased 356,000 shares of its common stock for $908.2 million during the fiscal third quarter of 2023, at an average price of $2,551 per share.
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CarMax (KMX) to Report Q1 Earnings: What's in the Offing?
CarMax Inc. (KMX - Free Report) is slated to release first-quarter fiscal 2024 results on Jun 23, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 73 cents per share and $7.28 billion, respectively.
The used car dealership chain beat earnings estimates in the last reported quarter on higher-than-anticipated gross profit per unit in the used and wholesale vehicle segments. CarMax surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 0.28%. This is depicted in the graph below:
CarMax, Inc. Price and EPS Surprise
CarMax, Inc. price-eps-surprise | CarMax, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal first-quarter earnings per share has been revised up by a cent in the past seven days. The bottom line projection indicates a year-over-year decline of 53.21%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 21.77%.
Factors to Note
The estimated decline in total vehicles sold by CarMax in the first quarter of fiscal 2024 is likely to have played spoilsport. The Zacks Consensus Estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 206,644 and 150,859, respectively, implying a decline from the year-ago period’s level of 240,950 and 186,307 units.
Additionally, falling average selling prices are likely to have clipped revenues further. For the May quarter, the consensus estimates for used vehicle ASP is pegged at $26,750, indicating a drop from the year-ago figure of $28,840. The consensus estimate for wholesale vehicle ASP is pegged at $8,740, indicating a fall from the year-ago figure of $11,000.
Consequently, the Zacks Consensus Estimate for CarMax’s net sales from used vehicles is $5,688 million, implying an 18.9% year-over-year decline. The Zacks Consensus Estimate for quarterly net sales of wholesale vehicles is pegged at $1,339 million, indicating a decrease from the prior-year period’s $2,117 million.
Lower year-over-year revenues, commodity cost inflation and logistical challenges are likely to have weighed on gross profits. The Zacks Consensus Estimate for quarterly gross profit from the used-vehicle segment is pegged at $459 million, implying a decline from $564 million reported in the year-earlier quarter. The consensus mark for quarterly gross profit from the wholesale vehicle segment is pegged at $149 million, suggesting a decline from $192 million reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for CarMax this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: CarMax has an Earnings ESP of -4.57%. This is because the Most Accurate Estimate of earnings is pegged 3 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CarMax currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
CarMax’s key peers include O’Reilly Automotive (ORLY - Free Report) , Advance Auto Parts (AAP - Free Report) and AutoZone (AZO - Free Report) .
O’Reilly released first-quarter 2023 results on Apr 26. It reported adjusted earnings per share of $8.28, beating the Zacks Consensus Estimate of $8 on higher-than-expected comps growth. The bottom line increased 15.5% from $7.17 in the prior-year quarter. Quarterly revenues of $3.70 billion topped the consensus mark of $3.56 billion and were 12% higher than the prior-year figure of $3.30 billion.
For 2023, O’Reilly expects total revenues in the range of $15.2-$15.5 billion. Earnings per share are expected between $36.5 and $37. The forecast for comparable store sales growth is in the range of 4-6%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
Advance Auto reported first-quarter 2023 results on May 31. It reported adjusted earnings of 72 cents, falling 68.1% from the year-ago quarter figure and lagging the Zacks Consensus Estimate of $2.60 per share. Advance Auto generated net revenues of $3,417.6 million, lagging the Zacks Consensus Estimate of $3,427 million but increasing 1.3% from the year-ago reported figure.
Advance Auto estimates 2023 net sales in the band of $11.2-$11.3 billion. Comparable store sales are envisioned to range between negative 1% and 0%. The operating income margin is envisioned in the range of 5%-5.3%. Advance Auto expects its 2023 capex to be in the range of $250-$300 million. The company targets FCF in the range of $200-$300 million. EPS is forecast between $6 and $6.5. It aims to open 40 to 60 new stores this year.
AutoZone posted third-quarter fiscal 2023 results on May 23. It reported earnings of $34.12 per share, up 17.5% year over year and surpassed the Zacks Consensus Estimate of $30.84 per share. Net sales grew 5.8% to $4,090.5 million. However, the top line lagged the Zacks Consensus Estimate of $4,102.8 million. Gross profit increased to $2,146.1 million from the prior-year quarter’s figure of $2,006.4 million.
As of May 6, 2023, AutoZone had cash and cash equivalents of $274.9 million, up from $263 million on May 7, 2022. The total debt amounted to $7,340.5 million as of May 6, marking an increase from $6,057.4 million on May 7, 2022. Under its share repurchase program, AutoZone repurchased 356,000 shares of its common stock for $908.2 million during the fiscal third quarter of 2023, at an average price of $2,551 per share.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.