* Q1 EPS $0.52 vs est $0.53
* Q1 rev $2.77 bln vs est $2.82 bln
* Wholesale-vehicle revenue falls 2 pct
* New-vehicle sales fall 13 pct
* Shares fall more than 7 pct
By Sagarika Jaisinghani
June 21 CarMax Inc, a retailer of new
and used cars, posted a quarterly profit that missed analysts'
estimates as its wholesale business sold fewer cars.
The largest retailer of used cars in the United States said
although more people visited its stores to sell their cars
during the quarter compared with a year earlier, the visits did
not translate into as many buys by the company.
"They've been challenged with the supply of 1-to-3 year-old
cars, which is their core (business)," said Rick Nelson, an
analyst at Stephens Inc.
There has also been some resistance among customers to high
used-car prices, Nelson added.
Sales and gross profit at the company's wholesale unit have
been buoyed by higher used-car pricing. However, prices have
recently started declining, Credit Suisse analyst Gary Balter
wrote in a note to clients.
Revenue at the company's wholesale unit fell 2 percent to
$467.8 million while prices declined marginally. Revenue at the
segment had risen 32 percent and 52 percent in the first quarter
of the two previous fiscal years.
CarMax's near-term earnings growth outlook is lackluster and
may even disappoint, analyst Balter said and cut his price
target on the stock to $30 from $34.
The company benefited during the recession as cash-strapped
consumers looked for bargains, but warned last year that
increased competition from new car dealers may slow growth.
CarMax, which competes with America's Car-Mart,
said selling, general and administrative costs rose 5 percent,
partly because of two new stores it opened during the quarter.
The Richmond, Virginia-based company said on a call with
analysts that it expects costs to rise further as it plans to
open ten stores in fiscal 2013. It has opened two of these
stores in the current quarter.
Total retail sales of new vehicles fell 13 percent to 2,107
units in the quarter ended May 31, compared with a 14 percent
growth in the year-ago period.
The company earned 52 cents per share on revenue of $2.77
billion for the quarter ended May 31. Analysts were expecting a
profit of 53 cents per share on revenue of $2.82 billion,
according to Thomson Reuters I/B/E/S.
Shares of the company, which has a market value of about $6
billion, were down 7 percent at $25.98 on the New York Stock
Exchange on Thursday.