CarMax Inc. (NYSE: KMX) reported its financial results for the fiscal third quarter on Tuesday that topped analysts’ estimates for profit and revenue. The company, however, said its same-store sales posted a decline in Q3 as demand weakened in recent weeks.
Shares of the company slid roughly 4% in premarket trading on Tuesday and lost another 4% on market open. Including the price action, CarMax shares are now trading at £69.56 versus £33.15 per share in March, when the impact of the COVID-19 crisis was at its peak. The used-car retailer had started the year at a per-share price of £67. The price action should come in handy if you’re interested in investing in the stock market.
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CarMax Q3 financial results versus analysts’ estimates
CarMax attributed the decline in sales to the rising cases of COVID-19. The company also said that election-related uncertainty also weighed on its sales in the latter half of the recent quarter. In an announcement last week, CarMax was named the official auto retailer of NBA and WNBA.
America’s largest used-car retailer said on Tuesday that its net income in the third quarter came in at £176.18 million that translates to £1.06 per share. In the same quarter last year, it had recorded a much lower £129.68 million or 78 pence per share.
In terms of revenue, the Richmond-based company reported £3.88 billion that translates to an 8.2% annualised growth. According to FactSet, experts had forecast the company to register a lower £3.75 billion of revenue in the recent quarter. Their estimate for per-share earnings was capped at 85 pence.
Comparable-store sales slid 0.8% in the fiscal third quarter
At £3.15 billion, used vehicle sales, as per CarMax, posted a 4.5% year over year growth in Q3 that matched analysts’ estimates. Comparable-store sales slid 0.8% in the third quarter versus a 3.5% increase expected.
CarMax also reported a 3.3% increase in used vehicles’ average selling price to £16,024. In comparison, wholesale vehicles noted a 23% increase to £4,676. The Fortune 500 company had also topped Wall Street expectations in the prior quarter (Q2), as per the report published in September.
CarMax performed largely upbeat in the stock market last year with an annual gain of close to 40%. At the time of writing, the American used-car retailer has a market cap of £11.31 billion and a price to earnings ratio of 22.15.
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