We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CarMax (KMX) to Report Q2 Earnings: What's in the Cards?
Read MoreHide Full Article
CarMax Inc. (KMX - Free Report) is slated to release second-quarter fiscal 2024 results on Sep 28, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pinned at 73 cents per share and $6.99 billion, respectively.
The used car dealership chain beat earnings estimates in the last reported quarter on higher year-over-year 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 13.64%.
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal second-quarter earnings per share has been revised down by 2 cents in the past seven days. The bottom-line projection indicates a year-over-year decline of 7.6%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 14.2%.
Factors to Note
The estimated decline in total vehicles sold by CarMax in the second quarter of fiscal 2024 is likely to have played spoilsport. Our estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 185,257 and 136,497, respectively, implying a decline from the year-ago period’s level of 216,939 and 159,677 units, respectively.
Falling average selling prices (ASP) are likely to have clipped revenues further. For the August quarter, our estimate for used vehicle ASP is pegged at $28,373, indicating a drop from the year-ago figure of $28,657. Our estimate for wholesale vehicle ASP is pegged at $10,058, indicating a fall from the year-ago figure of $10,179.
Consequently, our estimate for CarMax’s net sales from used vehicles is $5,256 million, implying a 16.4% year-over-year decline. Our estimate for quarterly net sales of wholesale vehicles is pegged at $1,372.8 million, indicating a decrease from the prior-year period’s $1,690 million.
However, CarMax is taking the necessary steps to better align expenses with sales. These include reducing staffing and advertising costs, limiting hiring and contractor utilization and slowing its planned store growth to five locations in fiscal 2024. Better expense alignment is likely to have a positive impact on the second quarter’s result. Efforts to leverage data science, automation and AI to improve efficiency and effectiveness within customer experience centers are also likely to aid the upcoming results.
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. That is not the case here.
Earnings ESP: CarMax has an Earnings ESP -0.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CarMax’s key peers include O’Reilly Automotive (ORLY - Free Report) and AutoZone (AZO - Free Report) , each carrying a Zacks Rank #3.
O’Reilly released second-quarter 2023 results on Jul 26. It reported adjusted earnings per share of $10.22, beating the Zacks Consensus Estimate of $10.02. The bottom line increased from $8.78 in the prior-year quarter. Quarterly revenues of $4,069 million topped the consensus mark of $3,990 million and were 11% higher than the prior-year figure.
For 2023, O’Reilly expects total revenues in the range of $15.4-$15.7 billion. Earnings per share are expected between $37.05 and $37.55. The forecast for comparable store sales growth is in the range of 5-7%. The free cash flow projection is in the band of $1.9-$2.2 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
AutoZone posted fourth-quarter fiscal 2023 results on Sep 19. It reported earnings of $46.46 per share, up 14.7% year over year and surpassed the Zacks Consensus Estimate of $44.51 per share. Net sales grew 6.4% to $5,690.6 million. The top line also surpassed the Zacks Consensus Estimate of $5,581 million. Gross profit increased to $2,999.7 million from the prior-year quarter’s figure of $2,755.9 million.
As of Aug 26, 2023, AutoZone had cash and cash equivalents of $277.1 million, up from $264.4 million as of Aug 27, 2022. The total debt amounted to $7,668.5 million as of Aug 26, marking an increase from $6,122.1 million on Aug 27, 2022. Under its share repurchase program, AutoZone repurchased 403,000 shares of its common stock for $1 billion during the fiscal fourth quarter of 2023, at an average price of $2,502 per share.
Image: Bigstock
CarMax (KMX) to Report Q2 Earnings: What's in the Cards?
CarMax Inc. (KMX - Free Report) is slated to release second-quarter fiscal 2024 results on Sep 28, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pinned at 73 cents per share and $6.99 billion, respectively.
The used car dealership chain beat earnings estimates in the last reported quarter on higher year-over-year 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 13.64%.
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal second-quarter earnings per share has been revised down by 2 cents in the past seven days. The bottom-line projection indicates a year-over-year decline of 7.6%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 14.2%.
Factors to Note
The estimated decline in total vehicles sold by CarMax in the second quarter of fiscal 2024 is likely to have played spoilsport. Our estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 185,257 and 136,497, respectively, implying a decline from the year-ago period’s level of 216,939 and 159,677 units, respectively.
Falling average selling prices (ASP) are likely to have clipped revenues further. For the August quarter, our estimate for used vehicle ASP is pegged at $28,373, indicating a drop from the year-ago figure of $28,657. Our estimate for wholesale vehicle ASP is pegged at $10,058, indicating a fall from the year-ago figure of $10,179.
Consequently, our estimate for CarMax’s net sales from used vehicles is $5,256 million, implying a 16.4% year-over-year decline. Our estimate for quarterly net sales of wholesale vehicles is pegged at $1,372.8 million, indicating a decrease from the prior-year period’s $1,690 million.
However, CarMax is taking the necessary steps to better align expenses with sales. These include reducing staffing and advertising costs, limiting hiring and contractor utilization and slowing its planned store growth to five locations in fiscal 2024. Better expense alignment is likely to have a positive impact on the second quarter’s result. Efforts to leverage data science, automation and AI to improve efficiency and effectiveness within customer experience centers are also likely to aid the upcoming results.
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. That is not the case here.
Earnings ESP: CarMax has an Earnings ESP -0.26%. 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) and AutoZone (AZO - Free Report) , each carrying a Zacks Rank #3.
O’Reilly released second-quarter 2023 results on Jul 26. It reported adjusted earnings per share of $10.22, beating the Zacks Consensus Estimate of $10.02. The bottom line increased from $8.78 in the prior-year quarter. Quarterly revenues of $4,069 million topped the consensus mark of $3,990 million and were 11% higher than the prior-year figure.
For 2023, O’Reilly expects total revenues in the range of $15.4-$15.7 billion. Earnings per share are expected between $37.05 and $37.55. The forecast for comparable store sales growth is in the range of 5-7%. The free cash flow projection is in the band of $1.9-$2.2 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
AutoZone posted fourth-quarter fiscal 2023 results on Sep 19. It reported earnings of $46.46 per share, up 14.7% year over year and surpassed the Zacks Consensus Estimate of $44.51 per share. Net sales grew 6.4% to $5,690.6 million. The top line also surpassed the Zacks Consensus Estimate of $5,581 million. Gross profit increased to $2,999.7 million from the prior-year quarter’s figure of $2,755.9 million.
As of Aug 26, 2023, AutoZone had cash and cash equivalents of $277.1 million, up from $264.4 million as of Aug 27, 2022. The total debt amounted to $7,668.5 million as of Aug 26, marking an increase from $6,122.1 million on Aug 27, 2022. Under its share repurchase program, AutoZone repurchased 403,000 shares of its common stock for $1 billion during the fiscal fourth quarter of 2023, at an average price of $2,502 per share.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.