- CarMax 4Q net sales and operating revenue was $5.63 billion, marking a 1.7% decrease from the previous year, missing its estimated target of $5.82 billion.
- Used vehicle sales also underperformed, at $4.50 billion – a decrease of 0.7% from the previous year, missing the estimated mark of $4.6 billion.
- Wholesale vehicle sales experienced a greater decrease of 5.5% from the previous year, totalling $974.3 million, lower than the estimate of $1.05 billion.
- Other sales stood at $154.8 million, failing to hit the $159.9 million estimate.
- Revenues from extended protection plans reached $98.0 million, marking a 6% decrease from the previous year, again missing its $99.7 million estimate.
- Third-party finance fees saw earnings of $3.5 million, whereas a profit of $0.37 million was expected.
- Earnings per share (EPS) were 32c, a decrease compared to 44c from the previous year, and lower than the expected 45c.
- Used vehicle gross profit came in at $387.3 million, a small increase of 0.1% from the previous year, but falling short of the $390.2 million estimate.
- Wholesale vehicle gross profit decreased by 9.4% from the previous year to $129.4 million, missing the estimated $129 million.
- Looking towards the fiscal year 2025, the company sees its capital expenditures between $500 million and $550 million, which is significantly higher than the estimate of $404.8 million.
- CarMax plans to modestly accelerate the pace of share repurchases above the pace that was implemented in the third quarter of the fiscal year 2024.
- The company indicates requiring a low-single-digit gross profit growth to lever Selling, General and Administrative Expenses (SG&A) for fiscal year 2025.
- Capital expenditures in fiscal year 2025 are expected to largely reflect spending to support future, long-term growth in offsite-reconditioning and auction facilities, along with new stores.
- The company currently has 11 buys, 6 holds, and 3 sells in stock ratings.
Carmax Inc on Smartkarma
Top independent analyst Baptista Research on Smartkarma recently covered Carmax Inc, providing insights into the company’s performance. Titled “CarMax Inc.: Omnichannel Investments Paying Off – What Does This Mean for Future Growth? – Major Drivers,” the report highlighted a mixed result in the recent quarter. While revenues fell below market expectations, they exceeded analyst consensus on earnings. This success was attributed to CarMax’s acquisition of more vehicles from consumers and dealers, alongside increased wholesale unit sales compared to the previous year. Additionally, the company launched its first all-electric semi-truck during the quarter, specifically for vehicle transportation in California’s San Joaquin Valley.
A look at Carmax Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
CarMax Inc, a company specializing in retailing used cars and light trucks, demonstrates a mixed long-term outlook based on the Smartkarma Smart Scores analysis. With a solid score of 5 in Momentum, indicating strong upward trends, CarMax Inc shows promising potential for future growth and market performance. However, the company’s overall outlook is tempered by lower scores in other areas such as Dividend (1) and Resilience (2). This suggests that while CarMax Inc may experience strong momentum, potential investors may need to consider factors like dividend stability and resilience in their investment decisions.
Despite its mixed Smart Scores, CarMax Inc’s business model of purchasing, reconditioning, and selling used vehicles across the United States provides a stable foundation for its operations. The company’s scores of 3 in both Value and Growth indicate a solid foundation and potential for future expansion. Investors looking at CarMax Inc should weigh the company’s strong momentum against its lower scores in dividend and resilience factors area to determine if it aligns with their investment goals and appetite for risk.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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