CarMax Slips After Posting a Decline in Earnings

Shares of CarMax traded lower after the used car retailer reported a drop in earnings, although it exceeded analysts' expectations.
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Shares of CarMax  (KMX) - Get Report dropped Thursday after the used-car retailer reported a drop in fiscal fourth-quarter profit but topped Wall Street estimates.

Shares of the Richmond, VA., company fell 6.41% to $124.25 at last check.

CarMax reported a 2.32% drop in earnings to $209.9 million, or an adjusted $1.27 a share, from $214.9 million, or $1.30 a share, in the same period a year ago.

Revenue for the quarter ended Feb. 28 rose 4% to $5.16 billion from $4.96 billion in the year-ago period. That number was in line with analysts' expectations.

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A survey of analysts by FactSet produced consensus estimates of adjusted earnings of $1.24, on revenue of $5.17 billion.

Total used vehicle unit sales decreased 0.9% and same-store sales decreased by 2.3%.

“We are extremely proud of what we have accomplished this year and how the strategic changes we have made to our business position us for accelerated growth across retail, wholesale and CarMax Auto Finance,” said President and Chief Executive Officer Bill Nash in a statement.

"The rapid adoption of our online instant appraisal offer positions us to become the largest online buyer of used autos from consumer," he added.

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In the three months to February, CarMax acquired Edmunds after initially purchasing a minority stake in the company in early 2020. 

“The acquisition of Edmunds will further strengthen the role and reach of both companies,” Nash said.

CarMax will report earnings for the first quarter ending May 31 on June 25.

"We have the technology, data, talent, physical assets and scale to unlock opportunities across the used auto ecosystem. We’re excited about the future as we expect robust top line, bottom line and market share growth for the upcoming year," Nash said.

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