CarMax Inc. (KMX, Financial) released its fourth-quarter and full-year 2020 results before the market opened on April 2. The company’s earnings and revenue topped projections.
Key metrics
The Richmond, Virginia-based used car retailer recorded earnings of $1.30 per share in the fourth quarter, which reflected 15.04% growth year over year. Analysts had projected earnings of $1.12 per share. Revenue of billion $4.96 billion grew 14.9% from the prior-year quarter and surpassed estimates of $4.67 billion.
In a statement, President and CEO Bill Nash commented on the "unprecedented" coronavirus pandemic that is currently making headlines around the world.
“The situation is dynamic and changing quickly, making it difficult to predict what the immediate future holds," he said. "However, we believe we have the leadership experience, liquidity, resources, financial stability and partners in place to withstand the current environment and be well positioned for when the economy and consumers rebound.”
Used and wholesale vehicle sales
Used car units sales went up 14.7% in the reported quarter. This included a comparable store used unit sales growth of 11% thanks to robust conversion and solid growth in online traffic.
Total wholesale vehicle unit sales gained 2%. The company cited growth in its store base as well as an increase in its appraisal buy rate, which was only partly offset by the lower appraisal traffic.
Expansion of omnichannel facility
The omnichannel facility, which integrates physical and digital shopping experiences, was made available to more than 60% of its customers by the end of fiscal 2020. Now the company is directing its efforts to introduce the most relevant parts of the omnichannel experience in its remaining markets.
Impact of Covid-19
CarMax’s comparable store used unit sales witnessed solid growth in the first week of March. However, the coronavirus spread quickly and brought the company’ sales momentum, which it carried into the start of March, to a halt. Nearly 50% of the company’s stores have been shut down or are being operated on a limited basis. Customer demand has fallen drastically in stores that have remained opened.
Store details
CarMax rolled out three locations during the three months ended Feb. 29, of which two were in the existing markets (Portland, Oregon and Nashville, Tennessee) and one in a new market (Wayne, Indiana).
The company did not issue guidance figures for earnings and revenue.
Disclosure: I do not hold any positions in the stocks mentioned.
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