Latest news with #WilliamNash
Axios
6 days ago
- Automotive
- Axios
CarMax says tariff fears juiced used car demand in April
Driving the news: CarMax reported Friday that it sold 9% more used vehicles to retail customers in the most recent quarter than it did a year earlier, leading to a 7.5% rise in retail revenue. Tariffs may have played a part. CEO William Nash noted a demand uptick correlated to tariff speculation, with April coming in as the strongest month in the company's quarter — but stressed the business was already growing before that. Between the lines: Nash acknowledged that car shoppers are worried about price hikes and the resumption of federal student loan obligations. About 30% of the company's customers have student loans. "But I don't think it's necessarily showed up so much in the buying habits at this point," he said in terms of pricing. CarMax shares closed up 6.6% Friday on the report. Zoom out: Industrywide, wholesale used vehicle prices — the cars sold to other dealers — rose 1.7% from May through the first half of June, according to Cox Automotive's Manheim Used Vehicle Index. The bottom line: Tariffs haven't warped the used car economy ... at least not yet.
Yahoo
20-04-2025
- Automotive
- Yahoo
CarMax Stock Got Clobbered 17% in One Day. Is the Stock a Buy Now?
CarMax (NYSE: KMX) stock had a rough Thursday last week after the company reported weaker-than-expected earnings. It was a seemingly perfect storm of negativity: finding investor sentiment declining, missing analysts' estimates, and pulling its guidance for long-term growth. But the used-car retailer had been trading at a premium. Is it now a buying opportunity? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » CarMax hit a speed bump the day of its fourth-quarter earnings conference call, as it shed 17% of its value in one trading day. In fact, the results might have brought the stock back into buyable territory after its price-to-earnings (P/E) ratio sank to a one-year low: How you saw the company's fourth quarter could depend on whether you're a "glass half-full" or "glass half-empty" type of person. On one hand, CarMax's earnings per share (EPS) checked in with a massive 81% increase compared to the prior year, at $0.58 per share. On the other, its EPS still missed analyst estimates calling for $0.66 (per FactSet). Other news wasn't all bad. Net revenue jumped 6.7% to $6 billion, while retail used unit sales and comparable-store used unit sales increased a similar 6.2% and 5.1%, respectively. The used-car retailer even gained momentum during the back half of the year, helping offset a more challenging first half. CarMax operates in a highly fragmented market; in 2024 it captured a 3.7% share of the nationwide market for used vehicles aged 0 to 10. The retailer also posted improved per-vehicle metrics, including gross profit per retail used unit of $2,322, which was good enough to set a fourth-quarter record. Another good sign was found in the company's online results. Online retail sales accounted for 15% of retail unit sales, up from the prior year's fourth quarter. Online transactions, including retail and wholesale units, generated roughly 29% of revenue. The stock market has been hit hard by numerous tariff announcements made by President Donald Trump. But the silver lining for CarMax investors is that the impact of tariffs could provide the company a little boost in sales: The prices of new vehicles, especially imported ones, are set to rise as automakers pass some of those costs onto consumers. "I think it will push some folks into looking at used cars, late-model used cars, which is interesting because that's what we're seeing a lot of interest in right now," CarMax CEO William Nash said last Thursday, according to Barron's. "Now, I think over time what could happen is that the used car prices will also go up." Despite missing estimates, the company received a couple votes of confidence from analysts. William Blair analyst Sharon Zackfia reiterated an outperform rating on CarMax, noting that missing estimates didn't undermine solid sales momentum and profit growth. CFRA Research analyst Garrett Nelson went as far as moving CarMax's rating from buy to strong buy, saying the company would be "one of the biggest winners from the impact of tariffs on the new vehicle market and consumers trading down to lower-cost used vehicles." CarMax has sales momentum in its favor, and a growing online presence. It could benefit from the impact of tariffs on new vehicles. And it's trading at its cheapest P/E ratio in over a year. The drawback is that if the U.S. faces a recession, many investors would rather avoid owning almost anything in the automotive industry. It might be wiser to watch CarMax stock from the sidelines. Before you buy stock in CarMax, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and CarMax wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $524,747!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $622,041!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 153% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CarMax. The Motley Fool has a disclosure policy. CarMax Stock Got Clobbered 17% in One Day. Is the Stock a Buy Now? was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
19-04-2025
- Automotive
- Globe and Mail
CarMax Stock Got Clobbered 17% in One Day. Is the Stock a Buy Now?
CarMax (NYSE: KMX) stock had a rough Thursday last week after the company reported weaker-than-expected earnings. It was a seemingly perfect storm of negativity: finding investor sentiment declining, missing analysts' estimates, and pulling its guidance for long-term growth. But the used-car retailer had been trading at a premium. Is it now a buying opportunity? Hitting a speed bump CarMax hit a speed bump the day of its fourth-quarter earnings conference call, as it shed 17% of its value in one trading day. In fact, the results might have brought the stock back into buyable territory after its price-to-earnings (P/E) ratio sank to a one-year low: KMX PE Ratio data by YCharts. How you saw the company's fourth quarter could depend on whether you're a "glass half-full" or "glass half-empty" type of person. On one hand, CarMax's earnings per share (EPS) checked in with a massive 81% increase compared to the prior year, at $0.58 per share. On the other, its EPS still missed analyst estimates calling for $0.66 (per FactSet). Other news wasn't all bad. Net revenue jumped 6.7% to $6 billion, while retail used unit sales and comparable-store used unit sales increased a similar 6.2% and 5.1%, respectively. The used-car retailer even gained momentum during the back half of the year, helping offset a more challenging first half. CarMax operates in a highly fragmented market; in 2024 it captured a 3.7% share of the nationwide market for used vehicles aged 0 to 10. The retailer also posted improved per-vehicle metrics, including gross profit per retail used unit of $2,322, which was good enough to set a fourth-quarter record. Another good sign was found in the company's online results. Online retail sales accounted for 15% of retail unit sales, up from the prior year's fourth quarter. Online transactions, including retail and wholesale units, generated roughly 29% of revenue. The silver lining The stock market has been hit hard by numerous tariff announcements made by President Donald Trump. But the silver lining for CarMax investors is that the impact of tariffs could provide the company a little boost in sales: The prices of new vehicles, especially imported ones, are set to rise as automakers pass some of those costs onto consumers. "I think it will push some folks into looking at used cars, late-model used cars, which is interesting because that's what we're seeing a lot of interest in right now," CarMax CEO William Nash said last Thursday, according to Barron's. "Now, I think over time what could happen is that the used car prices will also go up." Despite missing estimates, the company received a couple votes of confidence from analysts. William Blair analyst Sharon Zackfia reiterated an outperform rating on CarMax, noting that missing estimates didn't undermine solid sales momentum and profit growth. CFRA Research analyst Garrett Nelson went as far as moving CarMax's rating from buy to strong buy, saying the company would be "one of the biggest winners from the impact of tariffs on the new vehicle market and consumers trading down to lower-cost used vehicles." CarMax has sales momentum in its favor, and a growing online presence. It could benefit from the impact of tariffs on new vehicles. And it's trading at its cheapest P/E ratio in over a year. The drawback is that if the U.S. faces a recession, many investors would rather avoid owning almost anything in the automotive industry. It might be wiser to watch CarMax stock from the sidelines. Should you invest $1,000 in CarMax right now? Before you buy stock in CarMax, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CarMax wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $524,747!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $622,041!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to153%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of April 14, 2025
Yahoo
11-04-2025
- Automotive
- Yahoo
CarMax Inc (KMX) Q4 2025 Earnings Call Highlights: Record Profits and Strategic Growth Plans
Total Sales: $6 billion, up 7% year-over-year. Retail Unit Sales: Increased 6.2% year-over-year. Used Unit Comps: Up 5.1% year-over-year. Retail Gross Profit Per Used Unit: $2,322, a fourth-quarter record. Wholesale Unit Sales: Up 3.1% year-over-year. Wholesale Gross Profit Per Unit: $1,045, down from $1,120 last year. CAF Income: $159 million, up 8% year-over-year. Net Earnings Per Diluted Share: $0.58, up 81% year-over-year; adjusted EPS $0.64. Total Gross Profit: $668 million, up 14% year-over-year. SG&A Expenses: $611 million, up 5% year-over-year. Share Repurchase: Approximately 1.2 million shares for $99 million. New Store Openings: 6 planned for FY26, up from 5 in FY25. Capital Expenditures: Anticipated $575 million for FY26. Warning! GuruFocus has detected 7 Warning Signs with KMX. Release Date: April 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. CarMax Inc (NYSE:KMX) reported robust year-over-year EPS growth, driven by increased unit volume in sales and buys, higher gross profit, and improved cost efficiencies. The company achieved a record in buying vehicles from dealers, with a 114% increase in dealer-sourced vehicles compared to last year. CarMax Inc (NYSE:KMX) saw a significant increase in digital engagement, with approximately 67% of retail unit sales being omni sales, up from 64% last year. CarMax Auto Finance (CAF) delivered an 8% increase in income, supported by a steady net interest margin and strategic credit spectrum expansion. The company achieved a 14% increase in total gross profit, with notable improvements in service gross profit and efficiency measures. Wholesale gross profit per unit declined from $1,120 to $1,045 year-over-year, despite being historically strong. The average selling price for wholesale units remained flat year-over-year, indicating potential pricing pressures. SG&A expenses increased by 5% or $30 million from the prior year, driven by higher compensation and advertising costs. The company anticipates a larger provision for loan losses in the first quarter due to new origination volume and lower credit quality. CarMax Inc (NYSE:KMX) withdrew the timeline for its $30 billion sales goal due to macroeconomic uncertainties, indicating potential challenges in achieving long-term targets. Q: Can you explain the difference in market share performance between the first and second halves of fiscal '25, and how might rising used car prices affect your business? A: In the first half, we faced a significant price correction, which masked our improvements. The second half saw better execution and efficiency gains. Rising used car prices could widen the gap between new and late-model used cars, potentially increasing demand for used vehicles. We've learned to better manage inventory and financing options, which positions us well for future challenges. - William Nash, CEO Q: What are the current trends in used car sales, and how might new car tariffs impact your market share and industry growth? A: December and January were strong, February was softer due to leap day and tax refund delays, but March saw a step-up in sales. New car tariffs could increase new car prices, pushing consumers towards used cars, especially late-model ones, which could benefit us. However, tariffs could also raise parts costs, impacting reconditioning expenses. - William Nash, CEO Q: How does the investment in reconditioning centers and auctions affect your ability to handle older vehicles, and what are the expected cost savings? A: The new centers increase capacity and allow us to maintain quality standards for older vehicles. We aim to achieve $250 in cost savings per unit, though tariffs could impact parts costs. The centers also reduce logistics costs by being closer to stores, providing ongoing savings. - William Nash, CEO Q: How sustainable is the early fiscal Q1 performance given the fluid macro environment? A: We don't see it as a catch-up from February. We expect the momentum from the last three quarters to continue, though macro factors remain fluid. We're monitoring the situation closely and have mitigation plans in place. - William Nash, CEO Q: What steps are you taking to increase market share from the current 4% towards the 5% target? A: We're focused on growing sales and EPS, which will naturally increase market share. We're gaining share from other dealers and see continued growth in the 0-10 year-old vehicle segment. Our strategies are in place to maintain this momentum. - William Nash, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
