Diamonds and Dogs
Car sales strong at CarMax (KMX). The online car retailer is up 5% to new all-time highs following earnings. The company easily beat expectations as revenues rose 12% to $5.37 billion. Unit sales in comparable stores increased 9.5%, reflecting strong conversion and solid growth in web traffic as they roll out their omni-channel shopping to more locations. Total used unit sales rose 13%, and total wholesale unit sales increased 6.6% with the average selling price for used vehicles came in at $20,050.
Canopy Growth (CGC) loses more money. The world's biggest cannabis company is down 8% near five month lows following lackluster earnings. Sales rose 312% to $94.1 million, but the company missed estimates as they lost $98 million. Profit margins declined as expansion costs increase 426%. The company believes the quarter represents a trough for margins. Canopy Growth expects margins to improve next year and report EBITDA earnings in 2021. English translation is they will report positive earnings, but only because they will still exclude certain costs. As one of the highest cost producers, Canopy Growth has an uphill battle to growth and make money at the same time.