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CarMax (KMX) to Report Q4 Earnings: Here's What to Expect
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CarMax Inc. (KMX - Free Report) is slated to release fourth-quarter fiscal 2024 results on Apr 11, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pinned at 45 cents per share and $5.79 billion, respectively.
In the third quarter of fiscal 2024, the used car dealership chain reported adjusted earnings per share of 52 cents, surpassing the Zacks Consensus Estimate of 42 cents. The bottom line improved from 24 cents per share recorded in the year-ago period. It registered revenues of $6,149 million for the November-end quarter, which fell short of the Zacks Consensus Estimate of $6,278 million. The top line contracted 5.5% year over year. CarMax surpassed earnings estimates in each of the trailing four quarters, the average surprise being 45.14%.
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal fourth-quarter earnings per share has been revised upward by 2 cents in the past 30 days. The bottom-line projection indicates a year-over-year rise of 2.3%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 1.1%.
Factors to Note
The estimated rise in total vehicles sold by CarMax in the fourth quarter of fiscal 2024 is likely to have boosted the company’s top-line growth. Our estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 176,330 and 133,305, implying an uptick from the year-ago period’s level of 169,884 and 120,330 units, respectively.
Improvement in average selling prices (ASP) is likely to have further bolstered fiscal fourth-quarter revenues. For the February quarter, our estimate for used vehicle ASP is pegged at $26,899, up from the year-ago figure of $26,598. Our estimate for wholesale vehicle ASP is pegged at $8,512, representing an uptick from the year-ago figure of $8,297.
Consequently, our estimate for CarMax’s net sales from used vehicles is $4.74 billion, indicating an increase of 4.7% year over year. Our estimate for quarterly net sales of wholesale vehicles is pegged at $1.13 billion, indicating an increase from the prior-year period’s $1.03 billion.
On the flip side, for the fourth quarter of fiscal 2024, the company expects retail gross profit per unit (GPU) to be lower than that of the year-ago quarter. Marketing expenses per unit in fourth-quarter fiscal 2024 are expected to exceed the year-ago period’s levels. Lower GPU and higher marketing expenses are likely to have weighed on the company’s margin.
The company expects its capex in the second half of fiscal 2024 to be higher than the first half amid elevated investments in land and facility expansion, which may clip KMX’s cash flows in the fiscal fourth 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. That is not the case here.
Earnings ESP: CarMax has an Earnings ESP of -5.88%. This is because the Most Accurate Estimate is pegged 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.
CarMax’s key peers include O’Reilly Automotive (ORLY - Free Report) and AutoZone (AZO - Free Report) , each carrying a Zacks Rank #3 at present.
O’Reilly released fourth-quarter 2023 results on Feb 7. It reported adjusted earnings per share of $9.26, beating the Zacks Consensus Estimate of $9.07. The bottom line increased from $8.37 in the prior-year quarter. Quarterly revenues of $3,832 million marginally missed the consensus mark of $3,838 million but were 5.2% higher than the prior-year figure.
For 2024, O’Reilly expects total revenues in the range of $16.8-$17.1 billion, up from $15.8 billion reported in 2023. Earnings per share are expected between $41.05 and $41.55, up from $38.47 reported in 2023. The forecast for comparable store sales growth is in the range of 3-5%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected between $900 million and $1 billion. The company intends to open 190-200 stores this year.
AutoZone posted second-quarter fiscal 2024 results on Feb 27. It reported earnings per share of $28.89, which increased 17.2% year over year and surpassed the Zacks Consensus Estimate of $26.08. Net sales grew 4.6% to $3.86 billion. The top line marginally surpassed the Zacks Consensus Estimate of $3.85 billion. Gross profit increased to $2.08 billion from the prior-year quarter’s figure of $1.93 billion.
As of Feb 10, 2024, AZO had cash and cash equivalents of $304.1 million, up from $277.1 million as of Aug 26, 2023. The total debt amounted to $8.63 billion as of Feb 10, marking an increase from $7.67 million as of Aug 26, 2023. Under its share repurchase program, AutoZone repurchased 84,000 shares of its common stock for $223.8 million during the second quarter of fiscal 2024, at an average price of $2,676 per share.
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CarMax (KMX) to Report Q4 Earnings: Here's What to Expect
CarMax Inc. (KMX - Free Report) is slated to release fourth-quarter fiscal 2024 results on Apr 11, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pinned at 45 cents per share and $5.79 billion, respectively.
In the third quarter of fiscal 2024, the used car dealership chain reported adjusted earnings per share of 52 cents, surpassing the Zacks Consensus Estimate of 42 cents. The bottom line improved from 24 cents per share recorded in the year-ago period. It registered revenues of $6,149 million for the November-end quarter, which fell short of the Zacks Consensus Estimate of $6,278 million. The top line contracted 5.5% year over year. CarMax surpassed earnings estimates in each of the trailing four quarters, the average surprise being 45.14%.
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal fourth-quarter earnings per share has been revised upward by 2 cents in the past 30 days. The bottom-line projection indicates a year-over-year rise of 2.3%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 1.1%.
Factors to Note
The estimated rise in total vehicles sold by CarMax in the fourth quarter of fiscal 2024 is likely to have boosted the company’s top-line growth. Our estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 176,330 and 133,305, implying an uptick from the year-ago period’s level of 169,884 and 120,330 units, respectively.
Improvement in average selling prices (ASP) is likely to have further bolstered fiscal fourth-quarter revenues. For the February quarter, our estimate for used vehicle ASP is pegged at $26,899, up from the year-ago figure of $26,598. Our estimate for wholesale vehicle ASP is pegged at $8,512, representing an uptick from the year-ago figure of $8,297.
Consequently, our estimate for CarMax’s net sales from used vehicles is $4.74 billion, indicating an increase of 4.7% year over year. Our estimate for quarterly net sales of wholesale vehicles is pegged at $1.13 billion, indicating an increase from the prior-year period’s $1.03 billion.
On the flip side, for the fourth quarter of fiscal 2024, the company expects retail gross profit per unit (GPU) to be lower than that of the year-ago quarter. Marketing expenses per unit in fourth-quarter fiscal 2024 are expected to exceed the year-ago period’s levels. Lower GPU and higher marketing expenses are likely to have weighed on the company’s margin.
The company expects its capex in the second half of fiscal 2024 to be higher than the first half amid elevated investments in land and facility expansion, which may clip KMX’s cash flows in the fiscal fourth 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. That is not the case here.
Earnings ESP: CarMax has an Earnings ESP of -5.88%. This is because the Most Accurate Estimate is pegged 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: KMX 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 at present.
O’Reilly released fourth-quarter 2023 results on Feb 7. It reported adjusted earnings per share of $9.26, beating the Zacks Consensus Estimate of $9.07. The bottom line increased from $8.37 in the prior-year quarter. Quarterly revenues of $3,832 million marginally missed the consensus mark of $3,838 million but were 5.2% higher than the prior-year figure.
For 2024, O’Reilly expects total revenues in the range of $16.8-$17.1 billion, up from $15.8 billion reported in 2023. Earnings per share are expected between $41.05 and $41.55, up from $38.47 reported in 2023. The forecast for comparable store sales growth is in the range of 3-5%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected between $900 million and $1 billion. The company intends to open 190-200 stores this year.
AutoZone posted second-quarter fiscal 2024 results on Feb 27. It reported earnings per share of $28.89, which increased 17.2% year over year and surpassed the Zacks Consensus Estimate of $26.08. Net sales grew 4.6% to $3.86 billion. The top line marginally surpassed the Zacks Consensus Estimate of $3.85 billion. Gross profit increased to $2.08 billion from the prior-year quarter’s figure of $1.93 billion.
As of Feb 10, 2024, AZO had cash and cash equivalents of $304.1 million, up from $277.1 million as of Aug 26, 2023. The total debt amounted to $8.63 billion as of Feb 10, marking an increase from $7.67 million as of Aug 26, 2023. Under its share repurchase program, AutoZone repurchased 84,000 shares of its common stock for $223.8 million during the second quarter of fiscal 2024, at an average price of $2,676 per share.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.