Economics Americas ab Global Research 29 December 2025 US Economic Perspectives US Inflation Monthly: Unbiasing the CPI Published core CPI dropped to 2.63%; ex-shutdown we estimate 3.00% Strong monthly increases as November bias reverses: December core CPI 0.44% Core PCE inflation: 2.8% in 2025E, 3.0% in 2026E, 2.4% in 2027E, 2.0% in 2028E Alan Detmeister Economist alan.detmeister@ubs.com +1-212-713 1222 Jonathan Pingle Economist jonathan.pingle@ubs.com +1-212-713 2225 Abigail Watt Economist abigail.watt@ub ...

Key Takeaways CarMax posted Q3 EPS of $0.51, topping estimates, while revenues of $5.8B declined 6.9% year over year.KMX used-vehicle sales fell 7% as units dropped 8%, partly offset by a 0.9% rise in average selling price.CarMax saw wholesale revenues down 6.3%, auto finance income up 9.3%, and repurchased $201.6M in shares.CarMax Inc. (KMX) reported third-quarter fiscal 2026 (ended Nov. 30, 2025) adjusted earnings per share of 51 cents, which beat the Zacks Consensus Estimate of 32 cents. The bottom line ...

CarMax (KMX) reported $5.79 billion in revenue for the quarter ended November 2025, representing a year-over-year decline of 6.9%. EPS of $0.51 for the same period compares to $0.81 a year ago.The reported revenue represents a surprise of +1.18% over the Zacks Consensus Estimate of $5.73 billion. With the consensus EPS estimate being $0.32, the EPS surprise was +59.38%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their ...

RICHMOND, Va.--(BUSINESS WIRE)--CarMax, Inc. (NYSE:KMX) today reported results for the third quarter ended November 30, 2025. Third Quarter Highlights:(1) (1) Comparisons to the prior year's third quarter unless otherwise stated Interim CEO Commentary: "I'm honored to serve as Interim President and CEO at this important juncture for CarMax. Our unmatched physical and digital infrastructure, beloved national brand, and award-winning culture provide us with incredible advantages. Despite these advantages, bas ...

Core Insights - Asbury Automotive Group reported strong Q3 2025 earnings, with adjusted EPS of $7.17, surpassing estimates and showing a year-over-year increase from $6.35 [3] - Revenues for the quarter reached $4.80 billion, a nearly 13% increase year-over-year, exceeding the consensus estimate [3] Segment Performance - New vehicle revenues increased by 17% year-over-year to $2.53 billion, driven by higher unit sales, with retail units sold totaling 48,070, up 13% from the previous year [4] - Used vehicle retail revenues rose 7% to $1.23 billion but fell short of estimates due to lower unit sales, with retail used vehicle units sold at 37,696, up only 1% year-over-year [5] - Wholesale used vehicle revenues climbed 27% to $185.5 million, exceeding consensus estimates [6] - Finance and insurance business net revenues were $200.3 million, an 8% increase year-over-year, beating estimates [7] - Parts and service revenues reached $659.4 million, up from $593.1 million year-over-year, but missed the consensus estimate [8] Financial Metrics - Selling, general & administrative expenses as a percentage of gross profit increased to 65.7%, up 70 basis points year-over-year [9] - Cash and cash equivalents decreased to $32.2 million from $69.4 million at the end of 2024, while long-term debt rose to $3.6 billion [9] Market Outlook - Following the earnings release, there has been an upward trend in estimates for Asbury Automotive [10] - The company holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [12] Industry Comparison - Asbury Automotive is part of the Zacks Automotive - Retail and Wholesale industry, where competitor AutoNation reported a 6.9% year-over-year revenue increase to $7.04 billion [13]

Core Viewpoint - CarMax, Inc. will report its financial results for the third quarter ended November 30, 2025, on December 18, 2025, and will host a conference call to discuss these results [1][2]. Company Overview - CarMax is the largest retailer of used autos in the United States, known for its integrity, honesty, and transparency in automotive retail [4]. - In the fiscal year ending February 28, 2025, CarMax sold approximately 790,000 used vehicles and 540,000 wholesale vehicles at its auctions [4]. - CarMax Auto Finance originated over $8 billion in receivables during fiscal 2025, contributing to a nearly $18 billion portfolio [4]. - The company operates more than 250 store locations and employs over 28,000 associates [4]. - CarMax has been recognized for 21 consecutive years as one of the Fortune 100 Best Companies to Work For® [4]. Leadership Changes - David McCreight has been appointed as Interim President and Chief Executive Officer, while Tom Folliard serves as Interim Executive Chair of the Board [6].

Core Insights - CarMax, Inc. is one of the largest retailers of used vehicles in the U.S. with a market cap of $4.5 billion, operating through Sales Operations and Auto Finance segments [1] Performance Overview - CarMax has significantly underperformed the broader market, with stock prices declining 58.2% year-to-date and 55.5% over the past 52 weeks, while the S&P 500 Index returned 16.4% in 2025 and 14.1% over the past year [2] - The company also lagged behind the Consumer Discretionary Select Sector SPDR Fund, which saw a 6.8% increase in 2025 and 9.2% gains over the past 52 weeks [3] Q2 Results - Following the release of Q2 results on September 25, CarMax's stock prices experienced a marginal dip, with retail used unit sales dropping 5.4%, comparable store used unit sales declining 6.3%, and wholesale units dipping 2.2% [4] - The average selling prices also saw a slight decrease, leading to a topline of $6.6 billion, down 6% year-over-year and 6.5% below Street expectations [4] - Earnings per share (EPS) plunged 24.7% year-over-year to $0.64, missing consensus estimates by 37.9% [4] Future Expectations - For the full fiscal 2026, analysts expect CarMax to deliver an adjusted EPS of $3.15, reflecting a 3.7% year-over-year decline [5] - The company has a mixed earnings surprise history, missing bottom-line estimates once in the past four quarters while meeting or surpassing projections on three occasions [5] Analyst Ratings - Among 19 analysts covering CarMax, the consensus rating is a "Hold," consisting of two "Strong Buys," 13 "Holds," one "Moderate Sell," and three "Strong Sells" [5] - The current consensus is notably pessimistic compared to two months ago when the stock had a "Moderate Buy" rating [6] - Morgan Stanley analyst downgraded CarMax from "Overweight" to "Equal-weight" and lowered the price target from $56 to $35 [6]

Core Insights - CarMax, Inc. is a leading retailer of used vehicles in the U.S., operating through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF) [1] - The company is currently under investigation for allegedly misleading investors regarding its growth prospects, particularly related to unsustainable growth in fiscal 2026 [2][6] Financial Performance - CarMax reported an 11.2% decrease in income from CAF in the second quarter of fiscal 2026, attributed to a provision for loan losses of $142.2 million, an increase from $112.6 million the previous year [3][6] - The provision included $71.3 million in estimated lifetime losses on existing loans and $70.9 million for current quarter originations [3] Stock Market Reaction - Following the financial disclosure, CarMax's stock price fell by approximately 20%, closing at $45.60 on September 26, 2025 [4][6] - As of the latest data, CarMax's stock is trading at $34.20, with a market capitalization of $5.21 billion and a trading volume of 2,735,900 shares [5]

Summary of Sonic Automotive Conference Call Company Overview - **Company**: Sonic Automotive - **Industry**: Automotive Retail - **Segments**: - Franchise business (new vehicles) - EchoPark (used vehicles) - Power Sports (motorcycles, personal watercrafts, ATVs) - **Market Cap**: Approximately $2 billion - **Debt**: About $1.5 billion - **Net Cash**: Approximately $100 million - **Stock Information**: 22 Class A shares and 12.12 million Class B shares, closed around $62 [1][1][1] Core Business Insights - **Franchise Business**: Includes brands like Porsche, Audi, BMW, and Honda. This is the largest segment. - **EchoPark**: A used car segment similar to CarMax and Carvana, which has seen growth opportunities due to low multiples compared to the franchise business. - **Power Sports**: Recently entered market with potential for high returns due to low multiples and opportunities for consolidation [3][3][3][4][4][4]. Financial Health and Market Conditions - **F&I Loan Book**: - Average FICO score in franchise and EchoPark is around 710. - Approval rates in EchoPark are about 55%, with concerns about delinquencies in the subprime market [5][5][6][6]. - **Retail Environment**: - New vehicle sales are projected at a SAR of 15.8-16.2 million, indicating a healthy market. - National inventory supply is at 89 days, similar to pre-COVID levels, but varies by brand [10][10][11][11]. - **Luxury Brands**: - Sales slowed in October, particularly for Mercedes-Benz, BMW, and Audi, prompting calls for increased incentives [11][12][12]. - **Electric Vehicles**: - EV penetration reached 12% in Sonic's mix, compared to 10.5% industry-wide, with a focus on luxury brands [15][15][15][16][16]. Consumer Behavior and Affordability - **Consumer Sentiment**: - There are concerns about slower consumer spending and affordability, with average monthly payments for new vehicles at $750 [17][17][22][22]. - **Market Dynamics**: - The mix of higher-margin vehicles (SUVs and trucks) is contributing to sustained margins despite affordability concerns [32][32][32]. - **Used Vehicle Market**: - Used vehicle GPU has seen fluctuations, with expectations of supply tailwinds in the coming years as off-lease maturities increase [33][33][33]. Strategic Initiatives - **EchoPark Segment**: - Reduced locations from 50 to 18 to optimize inventory and profitability. Plans to expand again in 2026 as lease returns increase [46][46][49][49]. - **Power Sports Market**: - Entering a fragmented market with low multiples, aiming for consolidation and modernization similar to past automotive retail trends [56][56][57][57]. - **Capital Allocation**: - Focus on acquisitions this year, with plans for increased dividends and organic growth in the future [59][59]. Competitive Landscape - **Carvana and CarMax**: - Sonic Automotive differentiates itself through pricing and brand awareness, targeting a different demographic and vehicle mix [51][51][53][53]. - **Market Position**: - Sonic has performed well compared to peers, leading in new unit sales and gross profit growth [38][38][38]. Conclusion - Sonic Automotive is navigating a complex automotive retail environment with strategic focus on optimizing its segments, addressing consumer affordability, and leveraging growth opportunities in both the used vehicle and Power Sports markets. The company remains vigilant about market conditions and consumer sentiment while planning for future expansion and profitability.

Core Insights - Asbury Automotive (ABG) reported Q3 2025 adjusted earnings per share of $7.17, exceeding the Zacks Consensus Estimate of $6.80 and up from $6.35 in the previous year, driven by strong gross profits from new vehicle sales, finance and insurance, and parts and service [1][9] - Total revenues for the quarter reached $4.80 billion, marking a nearly 13% year-over-year increase and surpassing the Zacks Consensus Estimate of $4.69 billion [1][9] Segment Performance - New vehicle revenues increased by 17% year over year to $2.53 billion, exceeding the Zacks Consensus Estimate of $2.44 billion, supported by a higher number of units sold, totaling 48,070 (up 13% year over year) [2] - The average selling price (ASP) for new vehicles was $52,609, up 4% year over year, also beating the consensus mark of $52,259 [2] - Gross profit from new vehicle sales was $161 million, a 7% increase from the prior year, surpassing the Zacks Consensus Estimate of $157 million [2] Used Vehicle Performance - Used vehicle retail revenues rose 7% year over year to $1.23 billion but fell short of the Zacks Consensus Estimate of $1.24 billion due to lower unit sales, totaling 37,696 (up 1% year over year) [3] - The ASP for used vehicles was $32,543, up 6% year over year, exceeding the consensus estimate of $31,576 [3] - Gross profit from used vehicles was $61.5 million, a 10% year-over-year increase, but missed the Zacks Consensus Estimate of $63 million [3] Wholesale and Finance Performance - Revenues from the used vehicle wholesale business increased by 27% to $185.5 million, beating the consensus mark of $160 million, although gross profit of $3.8 million fell short of the estimate of $4.15 million [4] - Net revenues from the finance and insurance business reached $200.3 million, an 8% increase year over year, surpassing the Zacks Consensus Estimate of $187 million [5] - Gross profit from finance and insurance was $187.1 million, up 9% year over year, exceeding the consensus estimate of $178 million [5] Parts and Service Performance - Revenues from the parts and service business were $659.4 million, up from $593.1 million in the prior year but missed the Zacks Consensus Estimate of $661 million [6] - Gross profit from this segment was $389.1 million, surpassing the consensus mark of $388 million and reflecting a 9% year-over-year increase [6] Financial Metrics - Selling, general & administrative expenses as a percentage of gross profit rose to 65.7%, an increase of 70 basis points year over year [7] - As of September 30, 2025, the company had cash and cash equivalents of $32.2 million, down from $69.4 million as of December 31, 2024, with long-term debt increasing to $3.6 billion from $3.14 billion [7]