CarMax Hit the Gas Pedal This Quarter With Earnings Nearly 17% Higher
CarMax, Inc. (KMX) - Get Report shares are going vroom, vroom Friday morning, Sept. 22, after the used-car retailer posted earnings that beat Wall Street expectations.
Earnings per share reached $0.98, rising 16.7% since this time last year and exceeding the analyst prediction of 95 cents. CarMax saw net sales grow by 9.7% to $4.39 billion, and comp sales increased by 5.3%.
Total sales grew even higher: 11.1%. Before the bell Friday, shares were already seeing a uptick of 1.5%. The average used car sales price the quarter ending Aug. 31 was $19,667, slightly pricier than the $19,530 from last year.
"The comparable store sales performance reflected continued solid improvement in conversion resulting from strong execution by our store teams and our digital initiatives," the company said in the earnings release.
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Revenue totaled $4.39 billion, up from the $4 billion reported last year and higher than analyst predictions of $4.26 billion. CarMax also reported a gross profit increase of 10.8%, and even higher for used vehicle gross profit: 12%.
Between January 2016 and 2017, CarMax shares catapulted 43%, before dipping slightly in April.
In addition to used cars, Richmond, Va.-based car dealer is also offers financing to consumers and sells wholesale vehicles at auctions. It boasts a vast collection of proprietary data, amassed through over 180 million digital interactions a year and 65 million in-store contacts. This data, as TheStreet reported in January, allows customers to find the right vehicle faster.
Six CarMax stores in Houston closed toward the end of the quarter because of Hurricane Harvey, but this had only a "modest adverse effect" on comp sales.
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