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CarMax Inc. KMX is slated to release first-quarter fiscal 2024 results on Jun 23, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 73 cents per share and $7.28 billion, respectively.
The used car dealership chain beat earnings estimates in the last reported quarter on higher-than-anticipated gross profit per unit in the used and wholesale vehicle segments. CarMax surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 0.28%. This is depicted in the graph below:
CarMax, Inc. Price and EPS Surprise
CarMax, Inc. price-eps-surprise | CarMax, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for CarMax’s fiscal first-quarter earnings per share has been revised up by a cent in the past seven days. The bottom line projection indicates a year-over-year decline of 53.21%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 21.77%.
Factors to Note
The estimated decline in total vehicles sold by CarMax in the first quarter of fiscal 2024 is likely to have played spoilsport. The Zacks Consensus Estimate for used and wholesale units sold during the to-be-reported quarter is pegged at 206,644 and 150,859, respectively, implying a decline from the year-ago period’s level of 240,950 and 186,307 units.
Additionally, falling average selling prices are likely to have clipped revenues further. For the May quarter, the consensus estimates for used vehicle ASP is pegged at $26,750, indicating a drop from the year-ago figure of $28,840. The consensus estimate for wholesale vehicle ASP is pegged at $8,740, indicating a fall from the year-ago figure of $11,000.
Consequently, the Zacks Consensus Estimate for CarMax’s net sales from used vehicles is $5,688 million, implying an 18.9% year-over-year decline. The Zacks Consensus Estimate for quarterly net sales of wholesale vehicles is pegged at $1,339 million, indicating a decrease from the prior-year period’s $2,117 million.
Lower year-over-year revenues, commodity cost inflation and logistical challenges are likely to have weighed on gross profits. The Zacks Consensus Estimate for quarterly gross profit from the used-vehicle segment is pegged at $459 million, implying a decline from $564 million reported in the year-earlier quarter. The consensus mark for quarterly gross profit from the wholesale vehicle segment is pegged at $149 million, suggesting a decline from $192 million reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for CarMax this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Earnings ESP: CarMax has an Earnings ESP of -4.57%. This is because the Most Accurate Estimate of earnings is pegged 3 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CarMax currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.