CarMax shares soar after topping quarterly earnings and sales estimates

Key Points

  • CarMax beat quarterly earnings and revenue forecasts.
  • CEO Bill Nash said cost-cutting measures were effective despite macroeconomic pressures.
  • CarMax shares jumped more than 8% Friday morning after the news and traded to a nine-month high.

CarMax (KMX) was the best performing stock in the S&P 500, while the largest car dealer in ;occasion in the United States published better than expected quarterly results. 

CarMax reported first-quarter fiscal 2024 earnings per share (EPS) of $1.16, well above analyst estimates of $0.79. Even though revenue was down 17.4% to $7.69 billion, it also beat forecasts. Same-store used-vehicle sales at retail stores fell 11.4% year-over-year, but that was lower than declines of 22.4% and 14.1 % in the third and fourth quarters, respectively. 

The company noted that the results were impacted by inflationary pressures, higher interest rates, tighter lending standards and prolonged low consumer confidence.

Sill, CEO Bill Nash, said the company's “deliberate actions” are leading to improving business trends, despite a challenging macro environment. Last December, CarMax announced that it had suspended some hiring, halted stock buybacks and cut expenses.

Nash explained that CarMax gave prioritizing projects that “drive operational efficiency and create better experiences for our associates and customers”.

CarMax shares surged up more than 8% on Friday morning after the news and were trading at a nine-month high. =”/wp-content/uploads/2023/06/76e02a1a735d25119b579a698551b2bb.png” />


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