CarMax, Inc. (NYSE:KMX) today reported record results for the first quarter ended May 31, 2013.
- Net sales and operating revenues increased 19% to $3.31 billion.
- Used unit sales in comparable stores increased 17%.
- Total used unit sales rose 22%.
- Total wholesale unit sales increased 6%.
- CarMax Auto Finance (CAF) income increased 16% to $87.0 million.
- Net earnings grew 21% to $146.7 million. Net earnings per diluted share rose 23% to $0.64.
“We are very pleased to report our strongest increase in comparable store used unit sales in several years,” said Tom Folliard, president and chief executive officer. “Strong retail sales growth, together with continued contributions from CAF and wholesale drove all-time record quarterly revenues and earnings.”
First Quarter Business Performance Review
Sales . Total used vehicle unit sales grew 22% and comparable store used units grew 17% versus the prior year’s first quarter. The comparable store used unit growth was again driven by improved conversion, which we believe reflected continued improvements in execution in our stores and an attractive consumer credit environment.Wholesale vehicle unit sales grew 6% compared with last year’s quarter. Wholesale unit sales benefited from the growth in our store base and a stronger appraisal buy rate. Other sales and revenues increased 6% compared with the prior year’s first quarter. Extended service plan (ESP) revenues increased 26%, reflecting the 22% increase in used unit sales and an increase in ESP penetration. Net third-party finance fees declined $11.9 million as the third-party subprime providers (those who purchase financings at a discount) originated 21% of used vehicle unit sales in the current quarter versus 16% in the prior year’s first quarter. We believe that more attractive offers by our third-party providers and a delay in the 2013 tax refund season contributed to the increase in subprime financings.