CarMax, Inc. (NYSE:KMX) today reported record results for the first quarter ended May 31, 2014.
- Net sales and operating revenues increased 13.3% to $3.75 billion.
- Used unit sales in comparable stores increased 3.4%.
- Total used unit sales rose 9.8%.
- Total wholesale unit sales increased 9.9%.
- CarMax Auto Finance (CAF) income increased 8.7% to $94.6 million.
- Net earnings grew 15.7% to $169.7 million. Net earnings per diluted share rose 18.8% to $0.76.
“We had another great quarter, hitting an all-time record level of quarterly sales and earnings,” said Tom Folliard, president and chief executive officer. “The improvement was broad-based, with contributions from our retail and wholesale operations, as well as from CAF.”
First Quarter Business Performance Review
Sales . Total used vehicle unit sales grew 9.8% and comparable store used unit sales grew 3.4% versus the prior year’s first quarter. This growth was on top of increases of 22.1% in total used units and 16.7% in comparable store used units in last year’s first quarter. This year’s comparable store used unit sales growth was driven by improved customer traffic. The percentage of retail vehicles financed by third-party subprime providers (those who purchase financings at a discount), combined with those financed under the previously announced CAF loan origination test, declined from 21.3% in the first quarter of fiscal 2014 to 16.1% in this year’s first quarter.Wholesale vehicle unit sales grew 9.9% versus the first quarter of fiscal 2014. Wholesale unit sales benefited from increased appraisal traffic and a stronger wholesale vehicle buy rate, as well as the addition of new stores. Other sales and revenues increased 13.0% year-over-year. Extended protection plan revenues (which includes extended service plan (ESP) and guaranteed asset protection revenues) declined $0.9 million versus the prior year level reflecting an increase in the cancellation reserves for the underlying products and a modest reduction in the ESP penetration rate, partially offset by the growth in total retail sales. Net third-party finance fees improved $8.6 million versus last year’s first quarter primarily due to the reduction in the percentage of sales financed by third-party subprime providers.
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