CarMax (KMX) rises as Q4 profit exceeded expectations

Shares of CarMax (NYSE: KMX) are trading over 7% higher after the used vehicle retailer reported higher-than-expected profit figures for the fourth quarter.

CarMax reported earnings per share of $0.44 on revenue of $5.7 billion, which compares to the consensus for earnings of $0.20 on revenue of $6.11B. Sales fell 26% year-over-year with revenue from used vehicle sales down 21% YoY. Wholesale vehicle sales came in at $1.03B, down 42% YoY.

“We believe vehicle affordability challenges continued to impact our fourth quarter unit sales performance, as headwinds remained due to widespread inflationary pressures, climbing interest rates, tightening lending standards and prolonged low consumer confidence.”

The company reaffirmed its long-term financial targets. It still plans to open five new stores, including two more stores in the New York City metro market.

For FY24, the company sees capex of $450 million, above the $380.7M consensus.

“In fiscal year 2024, we expect to require low-single-digit gross profit growth to lever SG&A, well below the levels that we indicated during the investment period of our omni transformation."

KMX shares are up 8.2% year-to-date.

By Senad Karaahmetovic

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