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CarMax Inc. (KMX - Free Report) posted earnings per share of 72 cents in the third quarter of fiscal 2017 (ended Nov 30, 2016), highlighting an increase of 14.3% from 63 cents earned a year ago. Earnings surpassed the Zacks Consensus Estimate of 71 cents as well.
Net sales and operating revenues in the reported quarter rose 4.4% year over year to $3.7 billion. However, the figure lagged the Zacks Consensus Estimate of $3.79 billion.
Used vehicle revenues appreciated 6.2% to $3.1 billion in the reported quarter, driven by higher unit sales. Unit sales of used vehicles increased 9.1% to 156,789 vehicles. Comparable-store used vehicle unit sales inched up 5.4% in the quarter on improved conversion and increase in store traffic.
Wholesale vehicle revenues dropped 4.9% to $488.4 million in the quarter. Unit sales fell 2.2% to 91,973 vehicles. Average selling price of wholesale vehicles went down 2.7% to $5,103.
Other sales and revenues increased 1% to $122.5 million. Its extended protection plan (“EPP”) revenues grew 14% to $70.2 million.
Gross profit improved 8.4% to $503.1 million from $464.3 million in the year-ago quarter.
CAF reported a 3.2% decrease in income to $89.4 million in third-quarter fiscal 2017 from $92.3 million a year ago. This resulted from an increase in the provision for loan losses, partially offset by the effects of an increase in average managed receivables.
Store Openings
During the third quarter of fiscal 2017, CarMax opened six stores. Two stores were opened in new markets (one in Boise, ID, and one in Grand Rapids, MI) and four in the existing markets (one store each in Daytona, FL, and Philadelphia, PA, and two stores in San Francisco, CA).
In fiscal 2017, the company plans to open 15 stores. It also intends to open 13–16 superstores in fiscal 2018.
Share Repurchase Program
During the quarter under review, CarMax spent $198.7 million to repurchase 3.8 million shares under its existing share buyback program. As of Nov 30, 2016, the company had $1.69 billion of authorization remaining under its share repurchase program.
Financial Position
CarMax had cash and cash equivalents of $23.7 million as of Nov 30, 2016, down from $33.3 million as of Nov 30, 2015. Total debt rose to $889 million as of Nov 30, 2016, from $862.9 million as of Nov 30, 2015.
In the first nine months of fiscal 2017, CarMax had a cash outflow of $343.1 million from operations, compared with $381.6 million in the prior-year period. Capital expenditures totaled $315.5 million in the first nine months of fiscal 2017, up from $240.8 million a year ago. Meanwhile, the company projects capital expenditures of around $450 million for fiscal 2017.
Price Performance
So far this year, the company’s shares have gained 15.6% while the Zacks categorized Retail/Wholesale-Auto Parts industry saw a 9.6% increase. The upside in the stock price has been driven by aggressive store expansion and capital deployment to boost shareholders’ value.
Zacks Rank & Key Picks
CarMax currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , America's Car-Mart Inc. (CRMT - Free Report) and Rush Enterprises, Inc. (RUSHA - Free Report) .
Allison Transmission has a long-term expected growth rate of 11%.
America's Car-Mart has a long-term expected growth rate of 45.5%.
Rush Enterprises has a long-term expected growth rate of 15%.
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CarMax (KMX) Beats Q3 Earnings, Misses Revenue Estimates
CarMax Inc. (KMX - Free Report) posted earnings per share of 72 cents in the third quarter of fiscal 2017 (ended Nov 30, 2016), highlighting an increase of 14.3% from 63 cents earned a year ago. Earnings surpassed the Zacks Consensus Estimate of 71 cents as well.
Net sales and operating revenues in the reported quarter rose 4.4% year over year to $3.7 billion. However, the figure lagged the Zacks Consensus Estimate of $3.79 billion.
Used vehicle revenues appreciated 6.2% to $3.1 billion in the reported quarter, driven by higher unit sales. Unit sales of used vehicles increased 9.1% to 156,789 vehicles. Comparable-store used vehicle unit sales inched up 5.4% in the quarter on improved conversion and increase in store traffic.
Wholesale vehicle revenues dropped 4.9% to $488.4 million in the quarter. Unit sales fell 2.2% to 91,973 vehicles. Average selling price of wholesale vehicles went down 2.7% to $5,103.
Other sales and revenues increased 1% to $122.5 million. Its extended protection plan (“EPP”) revenues grew 14% to $70.2 million.
Gross profit improved 8.4% to $503.1 million from $464.3 million in the year-ago quarter.
CARMAX GP (CC) Price, Consensus and EPS Surprise
CARMAX GP (CC) Price, Consensus and EPS Surprise | CARMAX GP (CC) Quote
CarMax Auto Finance (CAF)
CAF reported a 3.2% decrease in income to $89.4 million in third-quarter fiscal 2017 from $92.3 million a year ago. This resulted from an increase in the provision for loan losses, partially offset by the effects of an increase in average managed receivables.
Store Openings
During the third quarter of fiscal 2017, CarMax opened six stores. Two stores were opened in new markets (one in Boise, ID, and one in Grand Rapids, MI) and four in the existing markets (one store each in Daytona, FL, and Philadelphia, PA, and two stores in San Francisco, CA).
In fiscal 2017, the company plans to open 15 stores. It also intends to open 13–16 superstores in fiscal 2018.
Share Repurchase Program
During the quarter under review, CarMax spent $198.7 million to repurchase 3.8 million shares under its existing share buyback program. As of Nov 30, 2016, the company had $1.69 billion of authorization remaining under its share repurchase program.
Financial Position
CarMax had cash and cash equivalents of $23.7 million as of Nov 30, 2016, down from $33.3 million as of Nov 30, 2015. Total debt rose to $889 million as of Nov 30, 2016, from $862.9 million as of Nov 30, 2015.
In the first nine months of fiscal 2017, CarMax had a cash outflow of $343.1 million from operations, compared with $381.6 million in the prior-year period. Capital expenditures totaled $315.5 million in the first nine months of fiscal 2017, up from $240.8 million a year ago. Meanwhile, the company projects capital expenditures of around $450 million for fiscal 2017.
Price Performance
So far this year, the company’s shares have gained 15.6% while the Zacks categorized Retail/Wholesale-Auto Parts industry saw a 9.6% increase. The upside in the stock price has been driven by aggressive store expansion and capital deployment to boost shareholders’ value.
Zacks Rank & Key Picks
CarMax currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , America's Car-Mart Inc. (CRMT - Free Report) and Rush Enterprises, Inc. (RUSHA - Free Report) .
All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has a long-term expected growth rate of 11%.
America's Car-Mart has a long-term expected growth rate of 45.5%.
Rush Enterprises has a long-term expected growth rate of 15%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>