Q4 Financial Results Overview: CarMax (NYSE:KMX) Leads Among Vehicle Retailers

Q4 Vehicle Retailer Earnings Recap

As the excitement of earnings season winds down, let's revisit some of the standout—and less impressive—performances from the fourth quarter among vehicle retailers. We begin our review with CarMax (NYSE:KMX).

Industry Overview

Purchasing a car is a major financial commitment, often second only to buying a home. To attract buyers, both new and used car retailers focus on offering variety, convenience, and excellent service. While online platforms are increasingly important for research, the car sales industry remains highly fragmented and local due to the size of the purchase and the challenges of transporting vehicles long distances. Ultimately, many people depend on cars for daily life, and auto retailers are keenly aware of this essential need.

Q4 Performance Highlights

The five vehicle retailers we monitor experienced a sluggish fourth quarter, with group revenues generally matching analyst forecasts.

Despite meeting expectations, these companies have seen their stock prices struggle, declining an average of 7.7% since their latest earnings announcements.

Top Q4 Performer: CarMax (NYSE:KMX)

CarMax, recognized for its transparent sales process and customer-first philosophy, is the largest automotive retailer in the U.S., offering a broad selection of vehicles.

In Q4, CarMax posted $5.79 billion in revenue, a 6.9% decrease from the previous year, but still surpassing analyst estimates by 3.3%. The company also outperformed expectations for both earnings per share and EBITDA, making it a standout quarter.

David McCreight, serving as Interim President and CEO, commented, “I am privileged to lead CarMax during this pivotal time. Our robust physical and digital platforms, strong national reputation, and award-winning culture give us significant strengths. However, recent results show that change is necessary for CarMax to move forward.”

Although CarMax delivered the largest beat against analyst expectations, its revenue growth lagged behind its peers. The stock has risen 3.5% since the earnings release and is currently trading at $42.50.

Lithia Motors (NYSE:LAD)

Lithia Motors, with a strong footprint in the Western United States, offers a wide selection of new and pre-owned vehicles, including trucks, SUVs, and luxury models from various brands.

For Q4, Lithia reported $9.20 billion in revenue, unchanged from the prior year and slightly below analyst projections by 0.6%. While the company outperformed on EBITDA, it missed significantly on earnings per share, resulting in a mixed quarter.

Despite a relatively solid performance compared to competitors, Lithia’s shares have dropped 13.8% since the report, now trading at $281.47.

Weakest Q4: Camping World (NYSE:CWH)

Established in 1966 as a single RV dealership, Camping World now sells recreational vehicles, boats, and a variety of outdoor gear.

The company reported $1.17 billion in revenue for the quarter, a 2.6% decrease year-over-year, but still 1.2% above analyst expectations. However, Camping World missed significantly on both EBITDA and gross margin estimates, making for a disappointing quarter.

As anticipated, the stock has fallen 20.7% since the results and is currently priced at $8.61.

AutoNation (NYSE:AN)

AutoNation operates one of the largest dealership networks in the U.S., with over 300 locations primarily in the Sunbelt region, selling new and used vehicles, parts, and services across multiple brands.

In Q4, AutoNation generated $6.93 billion in revenue, down 3.9% from the previous year and 3.6% below analyst expectations. The company also missed on EBITDA and revenue estimates, marking a softer quarter overall.

AutoNation had the largest shortfall relative to analyst forecasts among its peers. Its stock has declined 3.6% since the earnings release and is now at $196.62.

Penske Automotive Group (NYSE:PAG)

Penske Automotive Group operates a global network of automotive and commercial truck dealerships across the U.S., UK, Canada, Germany, Italy, Japan, and Australia, offering new and used vehicles, service, parts, and financing.

Penske reported $7.77 billion in revenue for Q4, flat year-over-year but 2.2% above analyst expectations. Despite this, the company missed significantly on both EBITDA and earnings per share, resulting in a slower quarter.

Penske achieved the fastest revenue growth among its peers, but its stock is down 4.1% since the earnings report, currently trading at $157.70.

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The StockStory analyst team, comprised of experienced professional investors, leverages data-driven analysis and automation to deliver timely, high-quality market insights.