CarMax Reports Quarterly Results

CarMax, Inc. (NYSE:KMX) today reported results for the second quarter ended August 31, 2012.

• Net sales and operating revenues increased 7% to $2.76 billion from $2.59 billion in the second quarter of last year.
• Used unit sales in comparable stores increased 5% for the quarter.
• Total used unit sales rose 8% in the second quarter.
• Total wholesale unit sales declined 2% in the second quarter.
• CarMax Auto Finance (CAF) income increased 19% to $75.7 million from $63.8 million in the prior year quarter.
• Net earnings were $111.6 million, or $0.48 per diluted share, compared with $111.2 million, or $0.48 per diluted share, in the second quarter of fiscal 2012.

Second Quarter Business Performance Review

“We are pleased with our improved retail sales in the second quarter, as used unit comps strengthened and we continued to open new stores,” said Tom Folliard, president and chief executive officer. “Net earnings were flat, as the contributions from the growth in retail sales and CAF income were offset by higher SG&A costs, which were pressured by the ramp in our store growth rate, and the tough comparisons in our wholesale operations.”

Sales . Used vehicle sales improved, with total used units climbing 8% and comparable store used units up 5%. The comparable store used unit growth was driven by improved conversion, which was supported by better credit offers and continued strong in-store execution. The used vehicle average selling price was similar to the prior year’s quarter.

Wholesale vehicle unit sales declined 2% compared with last year’s quarter, following increases of 23% and 20% in the second quarters of the two previous fiscal years. Appraisal traffic in the current quarter was higher than in the prior year period; however, the appraisal buy rate was lower, which we believe reflected the effect of moderating wholesale vehicle valuations.

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