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CarMax spikes on record Q1

Published: 14:30 21 Jun 2013 BST

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CarMax's (NYSE:KMX) share price was well up Friday with the release of record results for the company's first fiscal quarter of 2013, due to strong growth in the used car seller's retail sales as well as an upswing from the company’s auto finance arm.

Net earnings for the three months that ended May 31 came in at $146.7 million from the $120.7 million recorded for the same quarter a year ago, a rise of more than 21 per cent, for earnings per diluted share of 64 cents, up from the year ago figure of 52 cents, a bump of 23 per cent.

Net sales and operating revenues for the Richmond, Virginia-based company for the quarter were recorded as $3.31 billion, up from $2.8 billion a year ago, an increase of 19 per cent year-on-year.

The results were up on analyst expectations, which called for earnings of 58 cents per share on anticipated revenue of $3.15 billion.

Total used unit sales rose 22 per cent, while used unit sales in comparable stores climbed 17 per cent. 

Total used vehicle sales rose more than 23 per cent to $2.7 billion, while new vehicle sales fell 5.5 per cent to $52.4 million. Wholesale vehicle sales rose almost 5 per cent to $490.7 million.

“The comparable store used unit growth was again driven by improved conversion, which we believe reflected continued improvements in execution in our stores and an attractive consumer credit environment,” according to a company statement released with the figures.

CarMax's auto finance arm brought in income of $87 million, up from the year ago equivalent of $75.2 million, an increase of 16 per cent.

“We are very pleased to report our strongest increase in comparable store used unit sales in several years,” said president and chief executive officer Tom Folliard. “Strong retail sales growth, together with continued contributions from CAF and wholesale drove all-time record quarterly revenues and earnings.”

Shares were up in pre-market trading on the NYSE with the stock gaining $3.90 to hit $48.47, a rise of almost 9 per cent.

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