Upcoming AWS Coverage on America's Car-Mart Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 28, 2016 / Active Wall St. announces its post-earnings coverage on CarMax Inc. (NYSE: KMX). The Company released its third quarter fiscal 2017 financial results on December 21, 2016. The used car dealership chain topped earnings expectations, but came in a bit short on revenue numbers. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of CarMax's competitors within the Auto Dealerships space, America's Car-Mart, Inc. (NASDAQ: CRMT), reported on November 17, 2016, its operating results for the second quarter of fiscal 2017. AWS will be initiating a research report on America's Car-Mart in the coming days.

Today, AWS is promoting its earnings coverage on KMX; touching on CRMT. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=KMX

http://www.activewallst.com/registration-3/?symbol=CRMT

Earnings Reviewed

For the three months ended on November 30, 2016, CarMax reported that revenue rose 4.4% to $3.70 billion, yet was slightly below analysts' forecasts of $3.74 billion, although same-store sales growth of 5.4% topped expectations of a 4.2% increase. The comparable store sales increase resulted from increases in both conversion and store traffic and reflects two consecutive quarters of growth. Total gross profit increased 8.4% to $503.1 million versus Q3 FY16.

For Q3 FY17, CarMax reported net income of $136.6 million, or $0.72 per diluted share, from $128.2 million, or $0.63 per diluted share, in the year ago same period. The Company's net income increased 6.6%, while net earnings per diluted share rose 14.3%. Results surpassed Wall Street's expectations of $0.70 per share.

Quarter in Detail

During Q3 FY17, CarMax's total used unit sales increased 9.1% to 156,789 vehicles, while wholesale unit sales declined 2.2% to 91,973 vehicles. Used vehicle gross profit rose 8.8% and used vehicle gross profit per unit was consistent at $2,155 versus $2,160 in the prior year comparable period. Wholesale vehicle gross profit declined 7.3% versus the prior year's corresponding quarter, and wholesale vehicle gross profit per unit decreased to $900 in Q3 FY17 from $949 per unit in Q3 FY16. In the reported quarter, the Company's average selling prices for used vehicles declined 2.9% to $19,520.

CarMax Auto Finance

During Q3 FY17, CarMax Auto Finance (CAF) income declined 3.2% to $89.4 million. The decline was primarily due to an $11.0 million increase in the provision for loan losses, which resulted from both higher loss experienced in recent quarters and growth in managed receivables. Average managed receivables grew 11.2% to $10.30 billion. The total interest margin, which reflects the spread between interest and fees charged to consumers and the company's funding costs, declined to 5.8% of average managed receivables from 6.0% in last year's third quarter. The allowance for loan losses as a percentage of ending managed receivables was 1.10% as of November 30, 2016, compared to 0.97% as of November 30, 2015. Net loans originated in Q3 FY17 rose more than 9% y-o-y to $1.3 billion due to a combination of CarMax sales growth and the higher penetration, partially offset by the Company's lower average selling prices.

Balance Sheet

As of November 30, 2016, CarMax had cash and cash equivalents worth $23.7 million compared to cash and cash equivalents of $33.3 million as of November 30, 2015. The Company's total debt rose to $889 million at the end of Q3 FY17 from $862.9 million at the end of Q3 FY16. During Q3 FY17, CarMax repurchased 3.8 million shares of common stock for $198.7 million pursuant to its share repurchase program. As of November 30, 2016, the Company had $1.69 billion remaining under the program.

Store Update

During the reported quarter, CarMax opened six stores, including two stores in new markets (Boise, Idaho, and Grand Rapids, Michigan) and four stores in existing markets (one store each in Daytona, Florida, and Philadelphia, Pennsylvania, and two stores in San Francisco, California). The company plans to open 15 stores in FY17.

Stock Performance

On Tuesday, December 27, 2016, CarMax's shares were marginally up 0.42%, finishing the day at $64.31 with volume of 1.22 million shares exchanging hands by the close of the trading session. The stock advanced 10.16% in the last month, 19.76% in the past three months, and 37.68% in the previous six months. Furthermore, on a year-to-date basis, the stock surged 19.16%. Shares of the company have a PE ratio of 20.31.

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SOURCE: Active Wall Street