CarMax Inc. (KMX, Financial) released its second-quarter results before market opened on Sept. 24. The company’s earnings and revenue increased year-over-year and topped analysts’ expectations.
By the numbers
The used car retailer reported earnings of $1.40 per share, up 12.9% from the prior-year quarter. Net sales and operating income totaled $5.20 billion, up 9.1%. Analysts had projected earnings of $1.33 per share on $5.06 billion in revenue.
Reflecting on the quarter’s performance, the company’s president and CEO Bill Nash said, “CarMax posted solid second quarter results, and our double-digit increase in earnings per share reflected growth across our used, wholesale and CAF operations, along with ongoing share repurchases.”
Used and wholesale vehicle sales
Used car units sales popped up 2% in the second quarter. This included comparable store used unit sales growth of 3.2%, courtesy of robust conversion and solid growth in the online traffic.
Total wholesale vehicle units sold surged 4.7% from the prior year. CarMax cited a rise in its appraisal buy rate as a reason for the increase, which was only partly compensated for by lower appraisal traffic.
Expanding omnichannel facility
At present, roughly one-third of CarMax’s customers have access to its omnichannel facility, which integrates different methods of shopping. Looking ahead to the remainder of the year, the company will expand the omnichannel experience to the majority of its customers.
Last word
CarMax’s aggressive store expansion strategy has started paying off. Further, the company’s online traffic is also witnessing reasonable improvement. Other factors that aided CarMax’s performance included a conducive lending environment and efficient management of its in-store and online capabilities.
Disclosure: I do not hold any positions in the stocks mentioned.
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