The 10-second takeaway
For the quarter ended Feb. 29 (Q4), CarMax beat expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.
Gross margins shrank, operating margins grew, and net margins shrank.
CarMax logged revenue of $2.48 billion. The 13 analysts polled by S&P Capital IQ expected to see revenue of $2.41 billion on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $2.31 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.41. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.40 per share. GAAP EPS of $0.41 for Q4 were 5.1% higher than the prior-year quarter's $0.39 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 15.9%, 30 basis points worse than the prior-year quarter. Operating margin was 6.3%, 20 basis points better than the prior-year quarter. Net margin was 3.7%, 20 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.85 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $10.82 billion. The average EPS estimate is $1.95.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 812 members rating the stock outperform and 87 members rating it underperform. Among 301 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 288 give CarMax a green thumbs-up, and 13 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CarMax is outperform, with an average price target of $35.93.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.