It has been about a month since the last earnings report for CarMax Inc. KMX. Shares have added nearly 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CarMax Q4 Earnings Rise 14.1% Y/Y, Tops Estimates
CarMax posted earnings per share of $0.81 in the fourth quarter of fiscal 2017 (ended Feb 28, 2017), highlighting an increase of 14.1% from $0.71 earned a year ago. Earnings surpassed the Zacks Consensus Estimate of $0.79 as well.
Net sales and operating revenues in the reported quarter rose 9.3% year over year to $4.05 billion. Moreover, the figure also surpassed the Zacks Consensus Estimate of $3.97 billion.
Used vehicle revenues appreciated 11.7% to $3.45 billion in the reported quarter, driven by higher unit sales, which increased 13.4% to 176,017 vehicles. Comparable-store used vehicle unit sales inched up 8.7% in the quarter on improved conversion and increase in store traffic.
Wholesale vehicle revenues dropped 7.9% to $465.9 million in the quarter. Unit sales fell 1.2% to 91,143 vehicles. Average selling price of wholesale vehicles went down 6.8% to $4,910.
Other sales and revenues increased 19.2% to $133.8 million. Its extended protection plan (EPP) revenues grew 19.3% to $84 million.
Gross profit improved 14.9% to $562.2 million from $489.3 million in the year-ago quarter.
Full Year Fiscal 2017
For full-year fiscal 2017, CarMax posted earnings per share of $3.26, an increase of 7.6% from $3.03 earned a year ago. However, earnings missed the Zacks Consensus Estimate of $3.28.
Net sales and operating revenues in the reported quarter rose 4.8% year over year to $15.88 billion. Moreover, the figure surpassed the Zacks Consensus Estimate of $15.83 billion.
CarMax Auto Finance (CAF)
CAF reported a 10.2% decrease in income to $82.9 million in fourth-quarter fiscal 2017 from $92.3 million a year ago. This resulted from an increase in the provision for loan losses as well as an update to determine the loan loss allowance.
Store Openings
During the fourth quarter of fiscal 2017, CarMax opened four stores. Two of them were opened in new markets (one in Mobile, AL, and the other in Albany, NY) and the other two were opened in the existing markets (both in Los Angeles, CA). In fiscal 2017, the company opened 15 stores.