CarMax Reports Financial Results for Second Quarter 2024
Intellectia.AI2024-09-26
CarMax Reports Financial Results for Second Quarter 2024
CarMax, Inc. (NYSE: KMX) announced its financial results for the second quarter ending August 31, 2024.
Key Financial Metrics
| Metric | Q2 2024 Actual | Q2 2023 Actual | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Earnings Per Share (EPS) | $0.85 | $0.75 | +13.3% | $0.86 |
CarMax reported earnings per diluted share of $0.85, a 13.3% increase compared to last year's $0.75 per share. The company slightly underperformed the consensus estimate for EPS but demonstrated robust financial growth despite significant industry challenges.
Revenue Performance by Segment
| Segment | Q2 2024 Actual |
|---|---|
| Retail used units | +5.1% |
| Comparable store units | +4.3% |
| Wholesale units | -0.3% |
Retail used unit sales and comparable store used unit sales increased by 5.1% and 4.3% respectively, while wholesale units saw a marginal decline of 0.3%. The increase in retail units was driven by a 2.9% rise in vehicles purchased from dealers, although consumer purchases declined slightly. The diversification strategy in sourcing has supported positive revenue trajectories even as average selling prices have come under pressure.
Key Developments and Operational Highlights
- Repurchased Shares : $106.1 million worth of shares were repurchased.
- CAF Income : Income was down 14.4% year-over-year due to an increase in loan loss provisions.
- Gross Profit Growth : Total gross profit soared by 9.1%.
- Prime and Non-Prime Securitization : Successfully executed inaugural public asset-backed securitization deals.
- Store Expansion : Opened two new store locations in El Paso, Texas and Gainesville, Georgia.
Executive Commentary
Bill Nash, President and CEO, highlighted the successful execution of differentiated customer and associate experiences and pointed to the company's omni-channel capabilities as key drivers of sustainable business improvement. The efforts in SG&A management and stable vehicle valuations were also emphasized as critical during the quarter.
Share Repurchase and Dividends
CarMax bought back $106.1 million in shares during the quarter, with $2.15 billion remaining available for repurchase under current authorization.
Forward Guidance
The earnings release did not include specific forward guidance for the upcoming quarters. However, the company did outline plans to continue expanding its physical footprint and maintain investments in its omni-channel platform.
Stock Price Movement
Following the earnings release, CarMax's stock price saw an increase of approximately 4.07%.
With steady improvements, CarMax positions itself for enduring profitability by leveraging its diversified business model amidst broader industry challenges.
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