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CarMax Gross Margin %

: 14.00% (As of Aug. 2020)
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Gross Margin % is calculated as gross profit divided by its revenue. CarMax's Gross Profit for the three months ended in Aug. 2020 was USD752 Mil. CarMax's Revenue for the three months ended in Aug. 2020 was USD5,372 Mil. Therefore, CarMax's Gross Margin % for the quarter that ended in Aug. 2020 was 14.00%.


NYSE:KMX' s Gross Margin % Range Over the Past 10 Years
Min: 13.04   Med: 13.5   Max: 14.5
Current: 13.04

13.04
14.5

During the past 13 years, the highest Gross Margin % of CarMax was 14.50%. The lowest was 13.04%. And the median was 13.50%.

NYSE:KMX's Gross Margin % is ranked lower than
70% of the 1129 Companies
in the Vehicles & Parts industry.

( Industry Median: 18.30 vs. NYSE:KMX: 13.04 )

CarMax had a gross margin of 14.00% for the quarter that ended in Aug. 2020 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for CarMax was 0.40% per year.


CarMax Gross Margin % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

CarMax Annual Data
Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17 Feb18 Feb19 Feb20
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.33 13.75 13.60 13.65 13.40

CarMax Quarterly Data
Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.33 12.81 13.56 10.97 14.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


CarMax Gross Margin % Distribution

* The bar in red indicates where CarMax's Gross Margin % falls into.



CarMax Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

CarMax's Gross Margin for the fiscal year that ended in Feb. 2020 is calculated as

Gross Margin % (A: Feb. 2020 )=Gross Profit (A: Feb. 2020 ) / Revenue (A: Feb. 2020 )
=2722.3 / 20319.987
=(Revenue - Cost of Goods Sold) / Revenue
=(20319.987 - 17597.647) / 20319.987
=13.40 %

CarMax's Gross Margin for the quarter that ended in Aug. 2020 is calculated as


Gross Margin % (Q: Aug. 2020 )=Gross Profit (Q: Aug. 2020 ) / Revenue (Q: Aug. 2020 )
=752.1 / 5372.166
=(Revenue - Cost of Goods Sold) / Revenue
=(5372.166 - 4620.023) / 5372.166
=14.00 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


CarMax  (NYSE:KMX) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

CarMax had a gross margin of 14.00% for the quarter that ended in Aug. 2020 => No sustainable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


CarMax Gross Margin % Related Terms


CarMax Gross Margin % Headlines

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