CarMax (KMX) Misses Q1 EPS by 1c, Revenue Beats

CarMax (NYSE: KMX) reported Q1 EPS of $0.03, $0.01 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $3.23 billion versus the consensus estimate of $2.71 billion.

CEO Commentary:

“We accomplished a lot this quarter, despite the challenges the pandemic posed,” said Bill Nash, president and chief executive officer. “We continued our omni-channel rollout and launched new initiatives, such as contactless curbside pickup, a temporary extension of our 90-day warranty and CAF payment assistance to meet the near-term needs of our customers; we introduced social distancing and enhanced sanitation procedures; and we shifted our entire wholesale business from in-person to online auctions. In addition, we continued to keep our appraisal lanes open where possible for customers who wanted or needed to sell their cars.”

Nash mentioned that throughout the first quarter, CarMax spent approximately $30 million supporting associates impacted by the Coronavirus, store closures and furloughs. This included providing associates with at least 14 days of pay continuity upon store closure or quarantine, along with continuing medical benefits for associates who were furloughed. “Our associates are crucial to our culture and our long history of success. While the furlough was a difficult decision, we’re pleased to have called back more than 85% of these associates,” added Nash.

Looking to the future, Nash noted that he is encouraged by recent trends experienced in late May and June. Used unit sales have continued to gain strength, web traffic is up year-over-year and reaching new highs, and leads to our Customer Experience Centers have returned to pre-Coronavirus levels.

“We have built a strong business model,” said Nash. “We believe the rapidly changing consumer behavior is favoring companies with omni-channel offerings. Our omni-channel experience is fundamentally different than any other competitor -- our personalized, multi-channel offering incorporates a world-class online experience, a world-class in-store experience and a seamless combination of the two. We are very positive about the future, as we continue to leverage all of our capabilities while advancing with new innovations.”

For earnings history and earnings-related data on CarMax (KMX) click here.

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