CarMax (KMX) crushed earnings views for its fiscal first quarter Friday on the back of actions to control costs. CarMax stock soared but online rival Carvana (CVNA) plunged.
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CarMax Earnings
The leading used-car retailer posted earnings of $1.44 per share on $7.687 billion revenue for the quarter ended May 31. Year over year, CarMax earnings fell nearly 8% and revenue dropped 17%.
Analysts had braced for CarMax earnings of 79 cents a share and revenue of $7.495 billion, FactSet shows.
CarMax’s retail used unit sales declined 9.6% from a year ago. Wholesale units retreated 13.6% vs. a year earlier. Comparable store used unit sales fell 11.4% from a year ago.
SG&A (selling, general and administrative) costs fell 14.8%, or $96.9 million, to $559.8 million, driven by proceeds from a legal settlement and active cost management, CarMax said in an earnings release.
“Our deliberate actions are driving improved trends in the business, despite the challenging
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macro environment,” CarMax CEO Bill Nash said in the release.
CarMax Stock, CVNA Stock
Shares of CarMax leapt 10% to 86.21 on the stock market today. KMX stock topped a 73.57 cup-with-handle buy point in May and is far extended.
Upstart rival Carvana tanked 16.1% Friday. CVNA stock has skyrocketed around 350% year to date amid an improving financial outlook.
On Wednesday, the Wall Street Journal reported a potential takeover bid for embattled auto, home and renters insurer Root (ROOT), at a big premium. But bidder Embedded Insurance hasn’t managed to negotiate a deal, the report said.
Carvana, an online used-car seller, invested in Root in 2021. The companies partnered to provide car insurance to Carvana customers.
ROOT stock sank 14.8% Friday after soaring Wednesday.
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