CarMax earnings beat expectations, as higher prices boosted sales


Shares of CarMax Inc. KMX, +7.19% rose 1.9% in premarket trading Friday, after the used car retailer reported fiscal first-quarter profit that fell but topped expectations, while sales rose above forecasts, boosted by higher car prices. Net income for the quarter to May 31 dropped to $252.3 million, or $1.56 a share, from $436.8 million, or $2.63 a share, in the year-ago period. The FactSet consensus for earnings per share was $1.49. Sales grew 13.9% to $9.31 billion, above the FactSet consensus of $9.06 billion. Cost of sales rose more than sales to weigh on profits, as they increased 24.6% to $8.44 billion to knock gross margins down to 9.4% from 12.0%. Used vehicle unit sales fell 11.0% to 240,950 and same-store used unit sales fell 12.7%, citing the lapping of stimulus benefits, widespread inflation and waning consumer confidence. But an increase in the average selling prices of used vehicles raised sales by 13.9% to $7.01 billion, just above the FactSet consensus of $6.98 billion. The stock has tumbled 29.5% year to date through Thursday, while the S&P 500 SPX, +3.06% has shed 20.4%.

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