The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how vehicle retailer stocks fared in Q2, starting with Camping World (NYSE:CWH).
Buying a vehicle is a big decision and usually the second-largest purchase behind a home for many people, so retailers that sell new and used cars try to offer selection, convenience, and customer service to shoppers. While there is online competition, especially for research and discovery, the vehicle sales market is still very fragmented and localized given the magnitude of the purchase and the logistical costs associated with moving cars over long distances. At the end of the day, a large swath of the population relies on cars to get from point A to point B, and vehicle sellers are acutely aware of this need.
The 4 vehicle retailer stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.5%.
While some vehicle retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.1% since the latest earnings results.
Best Q2: Camping World (NYSE:CWH)
Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Camping World reported revenues of $1.98 billion, up 9.4% year on year. This print exceeded analysts’ expectations by 5.2%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Marcus Lemonis, Chairman and Chief Executive Officer of CWH stated, “I am unbelievably pleased with our Company’s financial performance in the quarter, driven by volume, margin performance and aggressive cost controls. We continue to surgically manage our inventory to find volume and gross profit opportunities leveraging our new and used supply chains, our contract manufacturing relationships, our sophisticated data analytics, and the strength of our balance sheet to put the right inventory on the ground at the right time and the right price. Our nimbleness is a true testament to the differentiation and durability of our model.”
Camping World achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 1.2% since reporting and currently trades at $17.85.
Is now the time to buy Camping World? Access our full analysis of the earnings results here, it’s free.
CarMax (NYSE:KMX)
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.
CarMax reported revenues of $7.55 billion, up 6.1% year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.9% since reporting. It currently trades at $61.20.
Is now the time to buy CarMax? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: America's Car-Mart (NASDAQ:CRMT)
With a strong presence in the Southern and Central US, America’s Car-Mart (NASDAQ:CRMT) sells used cars to budget-conscious consumers.
America's Car-Mart reported revenues of $341.3 million, down 1.5% year on year, falling short of analysts’ expectations by 5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
America's Car-Mart delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 17.1% since the results and currently trades at $36.90.
Read our full analysis of America's Car-Mart’s results here.
Lithia (NYSE:LAD)
With a strong presence in the Western US, Lithia Motors (NYSE:LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.
Lithia reported revenues of $9.58 billion, up 3.8% year on year. This number came in 2% below analysts' expectations. Zooming out, it was actually a strong quarter as it logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
The stock is up 12.3% since reporting and currently trades at $344.86.
Read our full, actionable report on Lithia here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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