CarMax Soars as Earnings, Revenues Top Analyst Estimates
CarMax Inc., the biggest U.S. auto dealer by market valuation, soared the most in five years after its fiscal first-quarter earnings and revenue topped analyst estimates as increased customer traffic boosted vehicle sales, reported Bloomberg.
Shares of CarMax jumped more than 16 percent to $52.75 at the close in New York, the biggest gain since June 19, 2009. CarMax had declined 3.7 percent this year through yesterday.
Net income for the three months ended May 31 rose 16 percent to $169.7 million, or 76 cents a share, the Richmond, Virginia-based company said in a statement. Analysts had estimated 67 cents, on average. Revenue advanced 13 percent to $3.75 billion, compared with a $3.59 billion projection from analysts.
Demand for autos has risen with an improving job market, more housing starts and low interest rates. That drove the annualized pace for new light-vehicles sales, adjusted for seasonal trends, to 16.8 million last month, the fastest rate since February 2007, according to Autodata Corp. CarMax said comparable-store sales rose 3.4 percent, with used-vehicle revenues advancing 13 percent and new-model revenue jumping 33 percent. CarMax operates 136 used-car superstores in 68 markets.
CarMax’s financing unit saw income rise 8.7 percent to $94.6 million during the period, as the company continues testing a subprime loan program. Some $20.5 million, or 0.8 percent of retail unit sales, were originated through that program during the period, according to the statement.
More Industry

Nebraska Rooftop Changes Hands
The Gregg Young Automotive Group has sold its second dealership to Janssen Auto Group, both in Plattsmouth, Neb.
Read More →
Penske Auto Group Deal a Record
The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.
Read More →
War Toll a Damper on Used Auto Prices
Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.
Read More →
Bridge the Maintenance Gap
With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.
Read More →
California Store Has New Owner
The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.
Read More →
BMW Plant Pursues Cleaner Energy
BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.
Read More →
Auto Affordability Inches Up
The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.
Read More →
Ohio Auto Group Under New Ownership
After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.
Read More →
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →