Economy
CarMax Beat On Earnings, But It Didn’t Do It By Selling Cars
Despite challenging economic conditions marked by inflationary pressures, higher interest rates and weak consumer confidence, CarMax, Inc KMX, the nation’s largest used car retailer, reported a surprising first-quarter fiscal 2024 earnings beat, sparking an over 8% run on shares to the upside.By The Numbers: The Richmond, Virginia-based used car retailer issued earnings of $1.16 per share, which beat a Street estimate of 79 cents, on revenues of $7.69 billion, ahead of the $7.53 billion consensus estimate. Despite the beat, the used car market remains far from stable.CarMax CEO William Nash said in a call with analysts, “The overall used market obviously is still depressed.” The company saw an 11.3% year-over-year slip in the number of used cars sold through combined retail and wholesale channels, selling a total of 378,972 units.Read Also: Coinbase Wins Supreme Court Ruling As CEO Armstrong Continues Share LiquidationAs such, it saw its retail used car revenues fall 14.4% compared to the same quarter last year, with retail used gross profit declining 8.7%, reflecting the 11.3% decline in retail unit sales.The problem goes beyond CarMax.Data issued by Cox Automotive for May shows a 3.4% dip in total used-vehicle sales to 3.1 million units compared to the same month last year. Used vehicle sales for 2023 are forecasted to be nearly flat compared to 2022, at 36.2 million.”The retail used-vehicle story is still being influenced by inventory, which is near the lowest point in our data set, which goes back to 2019,” said Chris Frey, senior manager of Economic and Industry Insights at Cox Automotive.High-interest rates and elevated retail prices are hurting demand. “Wholesale prices have been coming down in recent months, which likely means lower retail prices are on the horizon,” Frey added.CarMax’s adjusted earnings per share beat was bolstered by cost-cutting measures, not sales performance. CarMax had $935.55 million in cash and equivalents as of May 31, and an available $2.45 billion for repurchases under the outstanding authorization.The company is bracing for a “used-vehicle recession,” according to Reuters, and has had to rethink its strategy, as Nash said, “We believe these steps will enable us to come out of this cycle leaner and more effective, while also positioning us for future growth.”Looking ahead, CarMax plans to open five new locations in the full year 2024.Read Next: Musk Vs. Zuckerberg: ChatGPT Predicts The Winner Of A Billionaire UFC ShowdownPhoto: Shutterstock
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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