CarMax (NYSE:KMX) announced mixed Q1 results. The used vehicle retailer reported earnings of $0.97 per diluted share in the first quarter, a decline of 32.6% year-over-year but surpassed consensus estimates of $0.95 per share.
KMX’s Sales Breakdown
The company saw its total net sales and operating revenues decline by 7.5% year-over-year to $7.11 billion, compared to Street estimates of $7.16 billion. The company’s comparable store used unit sales fell 3.8% year-over-year in the first quarter.
CarMax stated that vehicle affordability challenges remained due to inflation, higher interest rates, and tighter lending standards, even as the average retail selling price declined year-over-year. In the first quarter, the average selling price of used vehicles fell by 2.7% year-over-year to $26,526.
Sales of used vehicles continued to be the biggest contributor, with sales of $5.67 billion in Q1, accounting for more than 75% of the company’s revenues.
Is KMX a Good Stock to Buy?
Analysts remain cautiously optimistic about KMX stock, with a Moderate Buy consensus rating based on six Buys, four Holds, and one Sell. Year-to-date, KMX has declined by more than 6%, and the average KMX price target of $80.30 implies an upside potential of 12.5% from current levels. These analyst ratings are likely to change following KMX’s Q1 results today.
