- CarMax Inc KMX shares gained premarket Tuesday as its fourth-quarter bottom line performance topped expectations. The company also affirmed its long-term financial targets.
- KMX reported a fourth-quarter 2023 net revenue decline of 25.6% year-on-year to $5.72 billion, missing the consensus of $6.04 billion.
- The company sold 290,214 units through retail and wholesale channels, down 15.5% Y/Y. Retail used unit sales decreased by 12.6%, and wholesale units declined by 19.3%.
- CarMax bought around 262,000 vehicles from consumers and dealers in Q4, a 22.5% decrease Y/Y.
- EPS of $0.44 came above the consensus of $0.24.
- Gross profit were down 14.1% Y/Y to $611.0 million, while the margin expanded 150 basis points to 10.7%.
- Selling, general and administrative expenses fell 7.7% Y/Y to $572.8 million.
- CarMax held $951.0 million in cash and equivalents as of Feb. 28, 2023.
- The company had $2.45 billion worth of shares remaining available for repurchase.
- CarMax opened five new stores in the fourth quarter and had 240 used car stores at the end of the year. It plans to open five stores in FY24, including two stores in the New York City metro market.
- The company expects capital expenditures of around $450 million in FY24 to support a long-term expansion plan of offsite production, auction facilities and new stores.
- Long-Term Targets: CarMax confirmed its previously stated plan to sell 2 million - 2.4 million vehicles through its combined retail and wholesale channels by FY26.
- The company also reiterated that it expects to generate $33 billion - $45 billion in revenue by FY26 and the growth of its nationwide share of the age 0-10 used vehicle market to more than 5% by the end of calendar 2025.
- Price Action: KMX shares are trading higher by 7.12% at $70.55 in premarket on the last check Tuesday.
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