CarMax tops analysts’ estimates for earnings and revenue in the fiscal first quarter

CarMax (NYSE: KMX) released its quarterly earnings report on Friday that topped analysts’ estimates for earnings and revenue. On a year over year basis, its earnings and revenue in the first quarter came in significantly lower due to the Coronavirus pandemic that pushed it into closing its stores and furloughing employees in recent months.

Shares of the company are currently more than 3% down on Friday. At £76.45 per share, Carmax is roughly 6% year to date in the stock market after recovering from a low of £35.75 per share in March. CarMax recently settled an environmental lawsuit with sixteen DA’s offices.

CarMax Q1 financial results versus analysts’ estimates

According to Zacks Investment Research, experts had forecast the company to print £2.11 billion in revenue in the first quarter. Their estimate for loss per share was capped at 4.84 pence. In its report on Friday, CarMax topped both estimates posting a higher £2.61 billion in revenue in Q1 and 18.57 of adjusted earnings per share (EPS).

In terms of same-store sales, analysts had estimated CarMax to see a 40.89% decline in the recent quarter. America’s largest used-car retailer, however, noted a broader 41.8% decline in its Q1 comparable-store sales. CarMax, however, highlighted that in the two weeks that ended on 14^th June, the year over year decline in sales contracted to only 10%.

In the same quarter last year, the U.S. car retailer had registered a much higher EPS of £1.28. Its Q1 revenue also came in 40% lower versus the year-ago figure.

CarMax furloughed 15,500 employees due to COVID-19

CarMax currently operated over 200 stores in the United States. Due to COVID-19, Richmond-headquartered company had to slash operations or temporarily shut about 50% of its stores in recent months. The company also suspended its share buyback programme and furloughed 15,500 workers to shore up finances amidst the health crisis.

To give a boost to its sales, CarMax invited potential car buyers to try its newly introduced contactless curbside pickup in April. According to the retailer, it has now recalled more than 65% of its furloughed employees as the U.S. states start to ease COVID-19 restrictions.

CarMax performed fairly upbeat in the stock market last year with an annual increase of about 40%. At the time of writing, the Fortune 500 company has a market cap of £12.46 billion and a price to earnings ratio of 17.79.