As you would expect for a car retailer, CarMax, Inc. (KMX) had a real tough fiscal first quarter, which included year-over-year declines in profit and sales.
Nonetheless, the company is a Zacks #1 Rank with shares that have surged approximately 15% on Friday, which easily puts it on the Top Performers List.
Big Share Price Gain on Friday
While earnings per share dropped compared to a year earlier, the result still managed to surpass Wall Street’s expectation. This is the biggest factor in today’s surge in price.
Meanwhile, Tom Folliard, KMX’s President and CEO, outlined what he considered to be some encouraging trends for the company, and investors seem to have reacted favorably.
The fact is that net sales and operating revenues slumped 17% to $1.83 billion, versus $2.21 billion last year. Same-store sales declined 17%.
However, traffic did recuperate a bit on a sequential basis, according to Folliard, while sales execution improved “notably” on a year-over-year basis.
Earnings Estimates Rise
The last month has seen 2 of 11 covering analysts raise estimates for this fiscal year, which ends February 2010. The consensus estimate is now at 25 cents per share, or about 4.2% better than 30 days earlier.
For next fiscal year, analysts currently expect profit to jump to 53 cents per share, which is more than 100% atop this fiscal year’s outlook. That guidance has moved higher by about 10.4% in the past month.
A Lonely Company
KMX is the only company from the retail/wholesale auto-truck industry on today’s Zacks #1 Rank List, which includes 223 stocks.
(An interesting note, though, is that KMX is the second straight auto-related company to be featured as the Zacks #1 Rank Top Performer. Thursday’s stock was Wonder Auto Technology (WATG), which is a Chinese auto parts retailer.)
Volume for KMX today is very high at more than 10.6 million shares, compared to the average of almost 3.8 million.
