CarMax Q4 Profit Beats View; But Revenues Miss - Quick Facts

(RTTNews) - CarMax Inc. (KMX), a retailer of used cars, on Friday reported a 57.6 percent surge in profit for the fourth quarter from last year on higher sales, while the year-ago period's results were negatively impacted by one-time charges.

Earnings per share for the quarter beat analysts' expectations, while revenue missed their estimates. The company's shares are rising almost 6 percent in pre-market activity.

The company's fourth-quarter net earnings rose to $192.56 million or $1.13 per share from $122.15 million or $0.67 per share in the year-ago period.

In connection with the Tax Cuts and Jobs Act of 2017, net earnings for the year-ago period were reduced by $11.9 million, or $0.07 per share. Earnings for the prior-years quarter were also reduced by a one-time discretionary bonus of $8.0 million, or $0.03 per diluted share net of taxes, paid to eligible associates.

Net sales and operating revenue for the quarter rose to $4.32 billion from $4.08 billion in the year-ago period.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.06 per share for the quarter on revenues of $4.43 billion. Analysts' estimates typically exclude special items.

Total used vehicle unit sales increased 5.6 percent, while comparable store used unit sales rose 2.8 percent compared to the year-ago quarter. Total wholesale unit sales increased 3.7 percent in the quarter.

Looking ahead, CarMax said it currently plan to open 13 stores in fiscal 2020 and a similar number of stores in fiscal 2021.

The company estimates capital expenditures will increase to approximately $350 million in fiscal 2020 from $304.6 million in fiscal 2019.

The increase in planned capital spending in fiscal 2020 reflects several factors, including a shift of some spending originally planned for fiscal 2019 into fiscal 2020 and the addition of three customer experience centers to support our omni-channel roll-out.