Categories Analysis, Earnings

Earnings Preview: Higher costs might drive CarMax profits down

CarMax Inc. (KMX) is scheduled to report second-quarter 2019 earnings on September 26. Wall Street estimates revenues will grow 7% year-over-year to $4.70 billion and earnings will see an improvement of 24.5% to $1.22 per share.

In first-quarter 2019, CarMax beat analyst estimates on both revenues and earnings. The top line grew 5.5% while EPS improved 17.7%. Net income rose 12.7% helped by lower tax rates. The company saw sales increases in all its segments during the first quarter.

For the second quarter, used vehicle sales are expected to come in the same range as the first quarter while wholesale vehicle sales and other sales are expected to increase slightly.

Comparable store sales, which is an important metric to keep an eye on, dropped 2.3% last quarter. This decline was lower than the 8% drop recorded in the fourth quarter, indicating an improving trend and generating optimism.

CarMax has been opening several stores to broaden distribution and grow its numbers. The company has also been significantly investing in its e-commerce channel which is expected to benefit from its existing store footprint. However, these initiatives have led to higher costs which have put pressure on the company.

CarMax has a mixed record concerning meeting market expectations on results. The stock is up 17% so far this year and is likely to fluctuate based on the outcome of the second quarter results on Wednesday.

CarMax stock rises on upbeat results

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top