In today's column, we discuss the just reported earnings and outlook for CarMax, Inc. (NYSE: KMX ). This is a stock we have traded many times, but it is getting crushed now. However, we continue to hold aSelloff got you down? We are thriving during it at BAD BEAT InvestingWe have the right high-conviction picks and have helped our members hedge, and done well in this selloff. We also have pinpointed areas to buy during the correction. Enjoy more rapid-returns with our strategy to advance your savings and re ...

CarMax’s digital capabilities now support over 80% of its used car sales, executives said Thursday (April 10) during a quarterly earnings call.The user car retailer and auto finance company saw increases in both omnichannel and online retail sales during the fourth quarter, which ended Feb. 28, they said.“We are proud to offer customers the ability to progress seamlessly through and across online and in-store channels, delivering what our research affirms is the most customer-centric buying and selling expe ...

CarMax Inc. (KMX) reported fourth-quarter fiscal 2025 (ended Feb. 28, 2025) adjusted earnings per share of 64 cents, which came in line with the Zacks Consensus Estimate. The bottom line rose from 32 cents per share recorded in the year-ago period. The auto retailer registered revenues of $6 billion in the quarter under review, which surpassed the Zacks Consensus Estimate of $5.99 billion. The top line also rose 6.7% year over year. See the Zacks Earnings Calendar to stay ahead of market-making news.Segment ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Performance - Net revenues for the fourth quarter reached $6.0 billion, an increase of 6.7% year-over-year[3]. - For the three months ended February 28, 2025, net sales and operating revenues increased to $6,003.1 million, up from $5,626.6 million in the same period of 2024, representing a growth of 6.7%[27]. - Net earnings for the three months ended February 28, 2025, were $89.9 million, representing a significant increase of 78.8% from $50.3 million in the same period of 2024[33]. - Net earnings for 2025 increased to $500,556, up from $479,204 in 2024, representing a growth of approximately 6.5%[47]. - Basic net earnings per share for the three months ended February 28, 2025, were $0.58, compared to $0.32 in the same period of 2024[42]. Gross Profit and Expenses - Total gross profit was $667.9 million, up 13.9%, with gross profit per retail used unit reaching a record $2,322, an increase of $71 per unit[3][9]. - Gross profit for the three months ended February 28, 2025, was $667.9 million, a 13.9% increase from $586.2 million in the prior year[28]. - Used vehicle gross profit per unit rose to $2,322, an increase of 8.8% compared to $2,251 in the same quarter of 2024[29]. - Total SG&A expenses for the three months ended February 28, 2025, were $610.5 million, a 5.1% increase from $580.9 million in the same quarter of 2024[30]. - SG&A expenses rose by 5.1% to $610.5 million, but as a percentage of gross profit, it decreased by 770 basis points to 91.4%[11]. CarMax Auto Finance - CarMax Auto Finance (CAF) income increased by 8.2% to $159.3 million, driven by growth in net interest margin percentage[12]. - CarMax Auto Finance (CAF) income for the three months ended February 28, 2025, was $159.3 million, up from $147.3 million in the same period of 2024, reflecting an increase of 8.6%[32]. - The weighted average contract rate for loans was 11.1% for the three months ended February 28, 2025, down from 11.5% in the same period of 2024[32]. - The net penetration rate for loans remained stable at 42.3% for both the three months ended February 28, 2025, and 2024[32]. - CarMax Auto Finance originated over $8 billion in receivables during fiscal 2025, contributing to a nearly $18 billion portfolio[37]. Store Expansion and Operations - Two new store locations were opened in Mays Landing, New Jersey, and Visalia, California, bringing the total to 250 stores[15]. - For fiscal 2026, the company plans to open six new store locations and four stand-alone reconditioning/auction centers, with capital expenditures expected to be approximately $575 million[16]. - CarMax has 250 store locations and over 30,000 associates, maintaining its position as the largest retailer of used autos in the U.S.[37]. Cash Flow and Investments - Net cash provided by operating activities rose to $624,439 in 2025, compared to $458,617 in 2024, marking an increase of about 36.2%[47]. - Capital expenditures for 2025 were $467,939, slightly higher than $465,307 in 2024, indicating a stable investment level[47]. - The company reported a net cash used in financing activities of $(453,537) in 2025, compared to a net cash provided of $307,787 in 2024, indicating a shift in financing strategy[47]. - The net cash used in investing activities was $(461,002) in 2025, slightly lower than $(466,998) in 2024, indicating a consistent investment approach[47]. Recognition and Workforce - The company has been recognized for 21 consecutive years as one of the Fortune 100 Best Companies to Work For®[37].

Core Insights - CarMax, Inc. (KMX) is set to release its fourth-quarter fiscal 2025 results on April 10, with earnings estimated at 64 cents per share and revenues at $5.97 billion [1] - The earnings per share estimate has increased by 2 cents over the past 60 days, indicating a 100% rise compared to the previous year, while revenue is expected to grow by 6.14% year-over-year [2] Financial Performance - In the third quarter of fiscal 2025, CarMax reported adjusted earnings of 81 cents per share, exceeding the Zacks Consensus Estimate of 62 cents and up from 52 cents a year ago [3] - Revenues for the third quarter were $6.22 billion, surpassing the Zacks Consensus Estimate of $5.99 billion and reflecting a 1.2% increase from the same quarter last year [3] Strategic Developments - CarMax is the leading used car retailer in the U.S., benefiting from a strong nationwide presence and logistics network [4] - The company plans to open five new stores in fiscal 2025, including smaller cross-functional locations, and has made strategic acquisitions, such as Edmunds, to enhance its digital capabilities [4] Revenue Projections - Estimated revenues from used vehicle sales for the upcoming quarter are projected at $4.58 billion, representing a year-over-year growth of 1.8% [5] - Wholesale vehicle sales are expected to generate $892 million, indicating a 0.9% increase, while other revenues are estimated at $168.5 million, reflecting an 8.9% growth [5] Earnings Expectations - CarMax has a positive Earnings ESP of +2.44%, suggesting a likelihood of beating earnings estimates [6][7] - The company currently holds a Zacks Rank of 3 (Hold), which, combined with the positive Earnings ESP, enhances the probability of an earnings beat [7]

Group 1 - CarMax Inc is set to report its fourth-quarter results on April 10, with analysts expecting earnings of 64 cents per share, indicating a 100% increase from the same quarter last year [1] - The stock has experienced a year-to-date decline of 9.3%, but was up 0.5% at $74.09, aiming to end a three-day losing streak [1] - Historically, CarMax has shown a positive post-earnings trend, finishing higher after six of its last eight reports, with an average move of 7% over the past two years [2] Group 2 - The options market indicates a heightened interest in CarMax, with a 10-day call/put volume ratio of 3.16, ranking higher than 98% of readings from the past year [3] - The current options pricing suggests a larger expected swing of 14.5% following the earnings report, compared to the historical average [2] - There is a potential risk of a negative post-earnings move leading to an unwinding of the current optimism in the options market [3]

Core Insights - CarMax has been recognized as one of the 100 Best Companies to Work For in 2025, marking its 21st consecutive year on this prestigious list, ranking 69 overall [1][2] - The recognition is based on employee feedback, with over 1.3 million U.S. employees surveyed to assess workplace satisfaction [2] - CarMax has received additional accolades, including "Best Workplaces in Retail," "Most Innovative Companies," and recognition as a "Military Friendly Employer" [3] Company Overview - CarMax is the largest retailer of used cars in the U.S., having sold approximately 770,000 used vehicles and 550,000 wholesale vehicles during the fiscal year ending February 29, 2024 [4] - The company originated over $8 billion in receivables through CarMax Auto Finance in fiscal 2024, contributing to a total portfolio exceeding $17 billion [4] - CarMax operates over 245 store locations and employs nearly 30,000 associates [4] Employee Benefits - CarMax offers competitive pay and benefits, including immediate 401(k) eligibility with a 6% match, wellness benefits, paid time off, and tuition reimbursement [5] - Employees also receive discounts on car purchases, which can extend to family members, and access to wellness programs like gym discounts and Headspace for mindfulness [5]

Core Points - CarMax has been named one of the 100 Best Companies to Work For in 2025, marking the 21st consecutive year on this list, ranking 69 [1] - The recognition is based on employee feedback, with over 1.3 million U.S. employees surveyed by Great Place to Work [2] - CarMax has received additional accolades, including "Best Workplaces in Retail" and "Most Innovative Companies" [3] Company Overview - CarMax is the largest retailer of used cars in the U.S., selling approximately 770,000 used vehicles and 550,000 wholesale vehicles in the fiscal year ending February 29, 2024 [4] - The company originated over $8 billion in receivables through CarMax Auto Finance during fiscal 2024, contributing to a portfolio exceeding $17 billion [4] - CarMax operates over 245 store locations and employs nearly 30,000 associates [4] Employee Benefits - CarMax offers competitive pay and benefits, including discounts on car purchases for family members, immediate 401(k) eligibility with a 6% match, wellness benefits, and comprehensive medical plans [5] - Additional benefits include tuition reimbursement, adoption assistance, and an employee stock purchase plan [5]

Core Insights - The used car market is undergoing significant changes influenced by consumer preferences, technology, and economic factors, with CarMax and Carvana representing contrasting business models and trajectories [1] Group 1: Carvana's Performance - Carvana's stock has shown signs of recovery following a strong earnings report, with a revenue increase of 46% to $3.54 billion and a gross profit rise of 90% to $763 million [2][3] - The company reported a net income of $159 million and an adjusted EBITDA margin of 10.1%, indicating a shift towards profitability [3] - Analysts are optimistic about Carvana's future, projecting a stock price increase to a consensus range of $260 - $265, suggesting a healthy upside from its current price [3] Group 2: CarMax's Position - CarMax is preparing for its fourth-quarter earnings call amid significant market changes, with analysts maintaining a Hold rating and an average price target of $90.82, indicating a potential upside of 17.48% from its current price of $77.31 [6][7][8] - The company is implementing omnichannel initiatives to enhance customer experience, particularly targeting younger demographics who prefer remote shopping and flexible delivery options [9] Group 3: Business Models and Strategies - CarMax operates primarily through physical locations, which provides a reliable customer service experience but incurs higher overhead costs, while Carvana focuses on a fully online model emphasizing convenience [10] - Carvana's recovery is attributed to improved logistics, integration with ADESA, cost-cutting measures, and AI-powered customer service tools, enhancing operational efficiency [4][5] - CarMax is focusing on sustainable profitability and adapting its infrastructure to meet evolving consumer preferences, contrasting with Carvana's initial aggressive expansion strategy [12] Group 4: Market Dynamics - The potential for tariffs in the used car market could impact both companies, as rising new car prices may drive customers towards used vehicles, although market conditions can change rapidly [13] - Carvana presents a riskier but potentially more rewarding investment opportunity due to its growth potential, while CarMax offers stability and consistent profitability through its established business model [14] Group 5: Future Outlook - The success of both companies will depend on their ability to adapt to the changing used car market and effectively execute their respective strategies, with each serving different customer segments [15]