Key Takeaways
- CarMax reported better-than-expected third-quarter results as lower prices helped boost demand.
- Retail unit sales gained 5.4% year-over-year, and wholesale sales grew 6.3%.
- CEO Bill Nash said used vehicle valuations have become more stable.
CarMax (KMX) shares jumped Thursday when the biggest U.S. used car retailer reported its first quarterly sales increase in two years as lower prices brought out buyers.
CarMax posted a 1.2% year-over-year gain in third-quarter revenue to $6.22 billion, and earnings per share (EPS) of $0.81. Both were above Visible Alpha estimates.
Retail unit sales rose 5.4% to 184,243, with same-store sales adding 4.3%. Retail unit revenue grew 1.2% to $4.89 billion as an $1,100 drop in the average selling price boosted demand.
Wholesale vehicle sales added 6.3% to 136,013, and wholesale revenue rose 0.3% to $1.17 billion. That also benefitted from lower prices, with the average sale price down $500.
CarMax also bought 270,000 vehicles from consumers and dealers, a 7.9% hike from a year ago.
CEO Says Results Helped by ‘More Stable Environment’
Chief Executive Officer (CEO) Bill Nash said the results were helped by “a more stable environment for vehicle valuations.”
Shares of CarMax recently rose more than 4% to $84.77. They are up about 10% year-to-date.
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