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CarMax Restarts Share Buyback After 5 Months

Auto dealer CarMax resumed its share repurchase program on Monday, five months after it was interrupted by Covid-19 in April.

Used-car retailer CarMax  (KMX) - Get CarMax Inc Report on Monday resumed its share-buyback program five months after it suspended the effort.

CarMax had paused the program in early April as consumer demand for cars deteriorated during the covid-19 pandemic.

The company halted the buyback as part of a number of steps it took to conserve cash, including furloughing staff and reducing inventory and marketing spending. 

At the time, CarMax said nearly half its stores were closed or had limited operations.

In a Securities and Exchange Commission filing on Monday, the Richmond, Va., company said that as of today, it restarted the buyback. CarMax currently has $1.51 billion remaining under the board's buyback authorization.

Last week the company reported that for the fiscal second quarter ended Aug. 31, earnings jumped 28% to $1.79 a share from $1.40 in the year-earlier period. Revenue increased 3.3% to $5.37 billion from $5.2 billion. 

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“Consumers want to customize their own journey, and CarMax gives its customers the option to seamlessly do as much, or as little, online and in-person as they want," President and Chief Executive Officer Bill Nash said in a statement with that report.

The company’s sales had declined almost 40% to $3.23 billion in the previous quarter, ended May 31.

The company said it returned to targeted inventory levels in September, according to The Wall Street Journal.

CarMax also resumed its store expansion, which was paused during the fiscal first quarter. 

"We are resuming new-store growth and anticipate opening between 8 and 10 stores in fiscal 2022," the car dealer said.

Shares of CarMax at last check were up 1.5% to $95.40.