© Reuters.
CarMax (NYSE:), the largest used car retailer in the United States, reported its Q2 2024 earnings on Monday, matching estimates at 75 cents per share. This figure marks a decrease from the previous year’s earnings of 79 cents per share, aligning with InvestingPro’s tip that highlighted a declining trend in earnings per share for the company. The company’s revenues surpassed projections, reaching $7.07 billion, albeit representing a 13.2% year-over-year (YoY) decline. This follows the trend noted by InvestingPro, where analysts anticipate a sales decline in the current year.
In a challenging quarter, CarMax’s used-vehicle sales outperformed forecasts at $5.59 billion but still fell 11% YoY due to lower retail units and average selling prices (ASPs). The company also recorded a significant plunge in wholesale revenues by 21.8%, amounting to $1,322 million. This aligns with the InvestingPro data that showed a Revenue Growth of -17.19 % for LTM2024.Q2.
The firm’s administrative costs rose by 8.3% to $585.7 million during the period. Meanwhile, CarMax Auto Finance income dropped significantly by 26.2% YoY to $135 million. The company’s Gross Profit Margin for LTM2024.Q2 stood at 11.84 %, as reported by InvestingPro, which reflects the company’s weak gross profit margins, another point highlighted by InvestingPro Tips.
Despite the challenges faced in Q2, CarMax maintained a solid financial position with cash reserves standing at $521.1 million. This is in line with InvestingPro’s tip that the company’s liquid assets exceed short term obligations. However, the company’s long-term debt also increased to $1,608.7 million, which aligns with the tip that CarMax’s total debt has increased for consecutive years.
Additionally, CarMax announced that its share repurchase authorization stood at $2.45 billion, indicating an ongoing commitment to return capital to shareholders amid challenging market conditions, despite not paying a dividend to shareholders, as noted by InvestingPro Tips.
The performance of CarMax comes into focus as peer companies O’Reilly (NASDAQ:) Automotive, Advance Auto Parts (NYSE:), and AutoZone (NYSE:) also reported their financial results on Monday. The specifics of these companies’ performances were not detailed in the context provided. As a prominent player in the Specialty Retail industry, as pointed out by InvestingPro Tips, CarMax’s performance can be a significant indicator for the industry’s overall health.
For more insights and tips like these, consider subscribing to InvestingPro, which provides real-time metrics and tips for various companies. You can find more information here. Currently, InvestingPro provides 14 additional tips for CarMax, which can further assist in making informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
