XT-11 Bluetooth Earphone Magnetic Wireless Sports Headset Bass Music Earbuds Mic for Mobile Phones and More Devices
CarMax (KMX) earnings fell sharply but beat views for the first quarter, when the No. 1 used car dealer closed stores and furloughed workers due to the coronavirus pandemic. CarMax stock fell sharply.
CarMax Earnings Report
Estimates: Analysts saw CarMax swinging to a net loss of 6 cents a share vs. EPS of $1.59 a year ago, according to Zacks Investment Research. Revenue was seen diving 51% to $2.61 billion.
Same-store sales were expected to plunge 40.89%, according to Consensus Metrix.
Results: CarMax earned 3 cents on a GAAP basis, or 23 cents adjusted. Revenue plunged 40% to $3.23 billion. Used unit sales in comparable stores were down 41.8%. But comp-store used unit sales in the two weeks ended June 14, which fall in fiscal Q2, were within 10% of year-earlier levels.
Used-car sales have recovered better as consumers look for bargains in the coronavirus recovery. According to Cox Automotive, new-vehicle sales fell 30% in May while used sales fell 22%. In the week ending May 28, new sales shrank 28%, but used sales rose 6%.
The relative strength line had risen near 2015 highs after moving sideways for several years. The RS line, measuring CarMax stock’s performance against the S&P 500, is the blue line in the chart shown. Lithia Motors (LAD), Sonic Automotive (SAH) and online rivals Carvana (CVNA) and Cars.com (CARS) also have rising RS lines.
CarMax saw revenue accelerate for two straight quarters, before the coronavirus hit.
The Richmond, Va.-based company closed or reduced operations at roughly half its more than 200 stores. It also furloughed 15,500 employees, stopped store expansions, reduced inventory levels and halted its share repurchase program.
In April, CarMax launched contactless curbside pickup for car buyers. It has also been making a bigger online sales push to ward off nimble upstarts, such as Carvana.
As used car sales recover, CarMax has brought back about two-thirds of the workers on furlough.
Find Aparna Narayanan on Twitter at @IBD_ANarayanan.
YOU MAY BE INTERESTED IN: