CarMax, Inc (NYSE:KMX) has reported fourth-quarter earnings that beat expectations after it took steps to increase efficiencies in the face of declining demand for pre-owned vehicles, sending its shares more than 10% higher in early trade.
The company's sales declined by 25.6% to $5.7 billion in the three months ended February 28, 2023, missing analyst estimates of $6.04 billion while net earnings per diluted share came in at $0.44, down from $0.98 a year earlier but well ahead of Refinitiv estimates of 24 cents per share.
“Our deliberate steps to navigate the pressures facing the used car industry are driving sequential improvements in our business, and we will continue to prioritize initiatives to increase efficiencies and create better experiences for our associates and customers across our diversified business model,” CarMax president and CEO Bill Nash said in a statement.
Combined retail and wholesale used vehicle unit sales for the quarter were 290,214, a decrease of 15.5% from the prior year. Online retail sales accounted for 14% of retail unit sales, compared with 11% in the fourth quarter of last year. Revenue from online transactions, including retail and wholesale unit sales, was $1.7 billion, or approximately 30% of net revenues, compared to 31% of net revenues in 4Q 2022.
“During fiscal year 2023, we made significant progress to further improve the most customer-centric omnichannel experience in the industry, including enabling online self-progression for all of our retail customers and completing the nationwide rollout of our finance prequalification product.”
The company affirmed its long-term financial targets to sell between 2 million and 2.4 million vehicles through its combined retail and wholesale channels by fiscal 2026, generate between $33 billion and $45 billion in revenue by fiscal 2026, and grow its nationwide share of the age 0-10 used vehicle market to more than 5% by the end of calendar 2025.
CarMax’s shares were up 11% at $70.72 by 9:40am in New York.
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