Credit: Shutterstock photoCarMax Inc.KMX posted earnings per share of $1.09 in the third quarter of fiscal 2019 (ended Nov 30, 2018), up 34.6% from 81 cents in the year-ago quarter. Moreover, earnings surpassed the Zacks Consensus Estimate of $1.01.
Net sales and operating revenues in the reported quarter increased 4.6% year over year to $4.3 billion. However, the figure missed the Zacks Consensus Estimate of $4.33 billion. Total gross profit rose 5.6% year over year to $569.2 million.
During the quarter under review, used-vehicle revenues rose 3.6% to $3.5 billion as unit sales increased 2.3% to 173,476 vehicles. The average selling price of used vehicles rose 1.3% to $27,273. Comparable store used-vehicle unit sales declined 1.2%. The downside was primarily caused by lower store traffic, partially offset by improved conversion.
Wholesale vehicle revenues rose 9.2% to $603.6 million in the reported quarter. Unit sales increased 10% to 110,403 vehicles, courtesy of a boost in store base and a higher appraisal buy rate. The average selling price of wholesale vehicles declined 1% to $5,214.
Other sales and revenues increased 12.1% year over year. Moreover, the extended protection plan's (EPP) revenues rose 11.1%.
CarMax Auto Finance ("CAF") reported an increase of 6.7% in income to $109.7 million in the quarter under review, reflecting collective effects of an 8.4% rise in average managed receivables and a slightly lower total interest margin percentage.
CarMax, Inc. Price, Consensus and EPS Surprise
CarMax, Inc. Price, Consensus and EPS Surprise | CarMax, Inc. Quote
Store Openings
During third-quarter fiscal 2019, CarMax opened four stores in new television markets of Wilmington, NC; Lafayette, LA; Corpus Christi, TX; and Shreveport, LA.
Share Repurchase Program
In the quarter under review, CarMax spent $254.3 million to repurchase 3.7 million shares under the existing share buyback program. Also, the board approved a share repurchase extension of $2 billion. As of Nov 30, 2018, the company had $2.38 billion of authorization remaining under its share repurchase program.
Financial Position
CarMax had cash and cash equivalents of $35 million as of Nov 30, 2018, up from $26.3 million as of Nov 30, 2017. Long-term debt (excluding current position) amounted to $992.1 million as of Nov 30, 2018, down from $1.04 billion as of Nov 30, 2017.
Zacks Rank & Stocks to Consider
Currently, CarMax has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. ALSN , Fox Factory Holding Corp. FOXF and America's Car-Mart, Inc. CRMT , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have increased 2.5%.
Fox Factory has an expected long-term growth rate of 17.9%. Over the past six months, shares of the company have risen 20.5%.
America's Car-Mart has an expected long-term growth rate of 19.5%. Over the past six months, shares of the company have grown 10.1%.
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CarMax, Inc. (KMX): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
