CarMax Plunges After Q3 Earnings Miss, Pause In Share Buybacks

CarMax Inc KMX reported a third-quarter FY23 sales decline of 23.8% year-on-year to $6.5 billion Thursday, missing the analyst consensus estimate of $7.42 billion.
- The company sold 298,807 units through combined retail and wholesale channels, a decrease of 28% year-over-year.
- KMX cited vehicle affordability challenges continued to impact third-quarter unit sales performance as headwinds remain due to widespread inflationary pressures, climbing interest rates and low consumer confidence.
- The company bought 238,000 vehicles from consumers and dealers, down 39.8% versus last year.
- Gross profit was $576.7 million, down 31.1% year-over-year.
- EPS of 24 cents missed the consensus estimate of 72 cents.
- Selling, general and administrative expenses increased 2.7% year-over-year to $591.7 million.
- KMX held cash and equivalents of $688.6 million as of Nov. 30, 2022.
- The company has paused share repurchases, given the third-quarter performance and continued market uncertainties.
- "We are managing our business prudently, and prioritizing initiatives that reduce costs, unlock operating efficiencies, profitably grow market share and create better experiences for our associates and customers," said CEO Bill Nash.
- Outlook: Carmax said itplans to open 10 new locations in FY23.
- It sees FY23 capital expenditure of about $450 million.
- KMX Price Action: CarMax shares were trading lower by 8.35% at $54.41 Thursday morning.
- Photo via Shutterstock.

Momentum22.75

Growth83.96

Quality55.60

Value80.31

Short

Medium

Long

Earnings Calendar