CarMax First-Quarter Earnings Soar - TheStreet

CarMax First-Quarter Earnings Soar

Used-car dealership chain CarMax announces Wednesday that its first-quarter net earnings increased 252%.
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NEW YORK (TheStreet) -- Used-car dealership chain CarMax (KMX) - Get Report announced Wednesday that its first-quarter net earnings increased 252% to $101.1 million, or 44 cents a share, compared with $28.7 million, or 13 cents a share the same period last year, helped by the U.S. auto market recovery.

The outcome also included a 3 cents a share benefit pertaining to lower-than-expected loan losses.

Meanwhile, first-quarter net sales and operating revenues increased 23% to $2.26 billion, from $1.83 billion the previous year, while comparable store used unit sales increased 9% for the quarter. Analysts were, on average, expecting earnings of 33 cents a share on revenue of $2.09 billion.

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CarMax said the comparable sales figure increase reflects the gradual rebound in customer traffic, and also an easy year-over-year comparison.

CarMax adds that its buy rate has steadily strengthened over the last several quarters to slightly over 30% in the first quarter of this year.

"We believe this reflected favorable consumer response to our higher appraisal offers, which largely resulted from the strength of wholesale industry used vehicle pricing," the company explained.

CarMax stock was soaring 10.3% to $22.05 in pre-market trading.

-- Reported by Andrea Tse in New York

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