CarMax Crushes Q1 Earnings Estimates

  • CarMax Inc KMX reported first-quarter FY22 sales of $7.7 billion, up 138.4% year-on-year, beating analyst consensus of $6.2 billion.
  • The comparable store used unit sales increased 99.1% Y/Y.
  • A robust used auto demand environment, supported by federal stimulus checks and a shift in the timing of customer tax refunds, helped increase sales.
  • Combined retail and wholesale used vehicle unit sales were 452,188, an increase of 128% Y/Y.
  • Bought vehicles from consumers increased 236% Y/Y to 341,275.
  • Gross profit was $924.5 million, up 161% Y/Y. EBIT was $567.3 million.
  • EPS of $2.63 was up 1,853.3% Y/Y, beating the consensus estimate of $1.63.
  • Selling, general and administrative expense was 59.9% of gross profit, up 70.5% Y/Y due to a planned increase in advertising expense.
  • Cash and equivalents totaled $378 million as of May 31, 2021.
  • “We delivered exceptional results in the first quarter thanks to excellent execution by our team in a high-demand environment,” said Bill Nash, Chief Executive Officer.
  • Guidance: CarMax reaffirmed long-term targets for sales of $33 billion, 2 million units per year by 2026.
  • Price action: KMX shares traded higher by 6.76% at $127.50 on the last check Friday.
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