On Sept. 19, CarMax
- Total sales increased 10% to $2.1 billion but missed expectations, as new vehicle unit sales slipped 15% in the quarter. Comps edged ahead by a lackluster 3%.
- Despite the sales miss, CarMax managed to meet earnings forecasts, earning $65 million, or $0.29 per share.
- As a result of the poor first half, CarMax slashed its full-year outlook across the board, lowering earnings, comps, and total sales estimates. However, it feels these problems result from the market, rather than its operations, so it will continue adding stores at a rate of 15% to 20% annually.
- CarMax has received a three-star rating (out of a possible five) in Motley Fool CAPS. Competitors America's Car-Mart
(NASDAQ:CRMT) and Penske Auto Group(NYSE:PAG) earn two and three stars, respectively. Cruise on over to the CAPS community and share your opinion on these and thousands more stocks.
(Figures in millions, except per-share data.)
Income Statement Highlights
Q2 2007 |
Q2 2006 |
Change |
|
---|---|---|---|
Sales |
$2,122.5 |
$1,929.5 |
10% |
Net Profit |
$65.0 |
$54.3 |
19.8% |
EPS |
$0.29 |
$0.25 |
16% |
Diluted Shares |
220.6 |
215.3 |
2.5% |
Get back to basics with the income statement.
Margin Checkup
Q2 2007 |
Q2 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
13.6% |
13.1% |
0.4 |
Operating Margin |
5.1% |
4.5% |
0.6 |
Net Margin |
3.1% |
2.8% |
0.2 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$7.6 |
$23.8 |
(68.1%) |
Accounts Rec. |
$56.2 |
$66.7 |
(15.8%) |
Inventory |
$820.2 |
$734.4 |
11.7% |
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Accounts Payable |
$248.8 |
$190.2 |
30.8% |
Long-Term Debt |
$27.4 |
$34.3 |
(20.2%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
YTD 2007 |
YTD 2006 |
Change |
|
---|---|---|---|
Cash from Ops |
$168.0 |
$86.8 |
93.5% |
Capital Expenditures |
$132.1 |
$54.3 |
143.3% |
Free Cash Flow |
$35.9 |
$32.5 |
10.5% |
Free cash flow is a Fool's best friend.
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