The 10-second takeaway
For the quarter ended Aug. 31 (Q2), CarMax met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share dropped.
Margins shrank across the board.
CarMax reported revenue of $2.76 billion. The 12 analysts polled by S&P Capital IQ looked for revenue of $2.75 billion on the same basis. GAAP reported sales were 6.9% higher than the prior-year quarter's $2.65 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 $0.48. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.52 per share. GAAP EPS of $0.48 for Q2 were 2.0% lower than the prior-year quarter's $0.49 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 15.7%, 10 basis points worse than the prior-year quarter. Operating margin was 6.7%, 20 basis points worse than the prior-year quarter. Net margin was 3.9%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.43 billion. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $10.67 billion. The average EPS estimate is $1.82.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 807 members out of 901 rating the stock outperform, and 94 members rating it underperform. Among 281 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 266 give CarMax a green thumbs-up, and 15 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 $35.08.
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