CarMax Group Earnings Cheat Sheet: Beats Forecasts

S&P 500 (NYSE:SPY) component CarMax Group (NYSE:KMX) reported net income above Wall Street’s expectations for the first quarter. CarMax Inc. is a retailer of used vehicles in the United States. The company also sells new vehicles under franchise agreements with Chrysler, General Motors, Nissan and Toyota.

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CarMax Group Earnings Cheat Sheet for the First Quarter

Results: Net income for CarMax Group rose to $126.3 million (55 cents/share) vs. $101.1 million (44 cents/share) in the same quarter a year earlier. A rise of 24.9% from the year earlier quarter.

Revenue: Rose 18.5% to $2.68 billion YoY.

Actual vs. Wall St. Expectations: KMX beat the mean analyst estimate of 47 cents/share. Estimates ranged from 44 cents per share to 49 cents per share. It beat the average revenue estimate of $2.53 billion.

Quoting Management: “We are pleased to report another quarter of strong results,” said Tom Folliard, president and chief executive officer. Comparable store used unit sales increased 6%, fueled by increased customer traffic. While traffic for the current quarter remained solidly above the prior year level, sales conversion dipped somewhat. We are especially pleased with our performance in light of recent economic and market challenges, including higher gas and vehicle prices, the uptick in the unemployment rate and the recent pull-back in consumer confidence.”

Key Stats:

The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 20%, with the biggest boost coming in the first quarter of the last fiscal year when revenue rose 23.3% from the year earlier quarter.

The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 18.8% and in the third quarter of the last fiscal year, the figure rose 10.4%.

Gross margin shrank 0.4 percentage point to 14.3%. The contraction appeared to be driven by rising costs as the figure rose 19.1% from the year earlier quarter while revenue rose 18.5%.

The company beat estimates last quarter after being in line with expectations in the fourth quarter of the last fiscal year with net income of 38 cents per share.

Competitors to Watch: Copart, Inc. (NASDAQ:CPRT), America’s Car-Mart, Inc. (NASDAQ:CRMT), KAR Auction Services Inc (NYSE:KAR), AutoNation, Inc. (NYSE:AN), Penske Automotive Group, Inc. (NYSE:PAG), Group one Automotive, Inc. (NYSE:GPI), Ford Motor Company (NYSE:F), General Motors (NYSE:GM), Toyota Motor (NYSE:TM) and Sonic Automotive, Inc. (NYSE:SAH).

Stock Performance: Shares of KMX are up over 8% this morning…

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(Source: Xignite Financials)