CarMax's (NYSE:KMX) Q2 Earnings Results: Revenue In Line With Expectations, Stock Soars
Is now the time to buy CarMax? Find out in our full research report.
Revenue: $7.55 billion vs analyst estimates of $7.57 billion (6.1% year-on-year growth, in line)
EPS (GAAP): $1.38 vs analyst estimates of $1.17 (18.3% beat)
Adjusted EBITDA: $300.1 million vs analyst estimates of $359.2 million (4% margin, 16.5% miss)
Operating Margin: 3.1%, in line with the same quarter last year
Free Cash Flow was $144 million, up from -$221.6 million in the same quarter last year
Locations: 250 at quarter end, up from 245 in the same quarter last year
Same-Store Sales rose 6.6% year on year (-6.1% in the same quarter last year, beat vs expectations of up 6.3%)
Market Capitalization: $9.8 billion
'We delivered our fourth consecutive quarter of positive retail comps and double-digit year-over-year earnings per share growth. These results highlight the strength of our earnings growth model, which is underpinned by our best-in-class omni-channel experience, the diversity of our business, and our sharp focus on execution,' said Bill Nash, president and chief executive officer.
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.
A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $26.79 billion in revenue over the past 12 months, CarMax is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. For CarMax to boost its sales, it likely needs to adjust its prices or lean into foreign markets.
As you can see below, CarMax's sales grew at a tepid 6.1% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts).
This quarter, CarMax grew its revenue by 6.1% year on year, and its $7.55 billion of revenue was in line with Wall Street's estimates.
Looking ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a slight deceleration versus the last six years. We still think its growth trajectory is satisfactory given its scale and suggests the market is baking in success for its products.
Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.
CarMax sported 250 locations in the latest quarter. Over the last two years, it has opened new stores quickly, averaging 2.6% annual growth. This was faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it's investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it's prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.
CarMax's demand has been shrinking over the last two years as its same-store sales have averaged 2% annual declines. This performance is concerning - it shows CarMax artificially boosts its revenue by building new stores. We'd like to see a company's same-store sales rise before it takes on the costly, capital-intensive endeavor of expanding its store base.
In the latest quarter, CarMax's same-store sales rose 6.6% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.
We enjoyed seeing CarMax beat analysts' same-store sales and gross margin expectations this quarter. This led to nice EPS outperformance versus Wall Street's estimates. Overall, this was a solid quarter. The stock traded up 9.3% to $70.30 immediately after reporting.
So should you invest in CarMax right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
擷取數據時發生錯誤
登入存取你的投資組合
擷取數據時發生錯誤
擷取數據時發生錯誤
擷取數據時發生錯誤
擷取數據時發生錯誤
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
Red Rock Resorts (RRR) Reports Q2: Everything You Need To Know Ahead Of Earnings
Casino resort and entertainment company Red Rock Resorts (NASDAQ:RRR) will be announcing earnings results this Tuesday after the bell. Here's what investors should know. Red Rock Resorts beat analysts' revenue expectations by 0.6% last quarter, reporting revenues of $497.9 million, up 1.8% year on year. It was a satisfactory quarter for the company, with an impressive beat of analysts' EPS estimates but a miss of analysts' Casino revenue estimates. Is Red Rock Resorts a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Red Rock Resorts's revenue to be flat year on year at $485.4 million, slowing from the 16.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.41 per share. Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 4 downward revisions over the last 30 days (we track 10 analysts). Red Rock Resorts has missed Wall Street's revenue estimates three times over the last two years. Looking at Red Rock Resorts's peers in the consumer discretionary segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Monarch delivered year-on-year revenue growth of 6.8%, beating analysts' expectations by 5.4%, and Boyd Gaming reported revenues up 6.9%, topping estimates by 5.4%. Monarch traded up 20.4% following the results while Boyd Gaming was also up 4.1%. Read our full analysis of Monarch's results here and Boyd Gaming's results here. There has been positive sentiment among investors in the consumer discretionary segment, with share prices up 10.3% on average over the last month. Red Rock Resorts is up 8.9% during the same time and is heading into earnings with an average analyst price target of $57.77 (compared to the current share price of $56.64). Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
8 minutes ago
- Yahoo
Johnson Controls (JCI) Q2 Earnings Report Preview: What To Look For
Building operations company Johnson Controls (NYSE:JCI) will be announcing earnings results this Tuesday morning. Here's what you need to know. Johnson Controls beat analysts' revenue expectations by 0.7% last quarter, reporting revenues of $5.68 billion, up 1.4% year on year. It was a strong quarter for the company, with an impressive beat of analysts' adjusted operating income estimates and a solid beat of analysts' organic revenue estimates. Is Johnson Controls a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Johnson Controls's revenue to grow 1.9% year on year to $6.01 billion, in line with the 2.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.01 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Johnson Controls has missed Wall Street's revenue estimates six times over the last two years. Looking at Johnson Controls's peers in the building products segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Insteel delivered year-on-year revenue growth of 23.4%, beating analysts' expectations by 2.2%, and AZZ reported revenues up 2.1%, falling short of estimates by 3.2%. Insteel traded down 5.8% following the results while AZZ was up 5.2%. Read our full analysis of Insteel's results here and AZZ's results here. There has been positive sentiment among investors in the building products segment, with share prices up 6.8% on average over the last month. Johnson Controls is up 5.1% during the same time and is heading into earnings with an average analyst price target of $109.70 (compared to the current share price of $111). Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
Yahoo
8 minutes ago
- Yahoo
Armstrong World (AWI) Reports Earnings Tomorrow: What To Expect
Ceiling and wall solutions company Armstrong World Industries (NYSE:AWI) will be reporting earnings this Tuesday before market hours. Here's what to expect. Armstrong World beat analysts' revenue expectations by 3.4% last quarter, reporting revenues of $382.7 million, up 17.3% year on year. It was a strong quarter for the company, with a solid beat of analysts' adjusted operating income estimates and an impressive beat of analysts' EBITDA estimates. Is Armstrong World a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Armstrong World's revenue to grow 10.5% year on year to $403.6 million, slowing from the 12.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.78 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Armstrong World has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 1.9% on average. Looking at Armstrong World's peers in the building products segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Valmont delivered year-on-year revenue growth of 1%, beating analysts' expectations by 1.7%, and Sherwin-Williams reported flat revenue, in line with consensus estimates. Valmont traded up 7.9% following the results while Sherwin-Williams's stock price was unchanged. Read our full analysis of Valmont's results here and Sherwin-Williams's results here. There has been positive sentiment among investors in the building products segment, with share prices up 6.8% on average over the last month. Armstrong World is up 4.7% during the same time and is heading into earnings with an average analyst price target of $170.56 (compared to the current share price of $170). Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data