The largest U.S. secondhand car retailer CarMax (NYSE:KMX) Inc. released better-than-expected fiscal fourth-quarter earnings reports on Thursday, given the improvement in the second-hand car sales in the third quarter for the first time.
The consumption environment during recession promoted CarMax’s sales growth, because consumers are looking for bargains. However, the growing secondhand car prices, less supply of used cars and the constantly growing competitiveness of the new car retailers reduce the CarMax sales growth.
In the fourth quarter, CarMax grew secondhand car sales by 6 percent to 10,5769 million units, of which the wholesale vehicle sales grew by 13 percent to 7.3897 million. CarMax also said its second-hand car same store sales increased 4 percent in the fourth quarter, of which the wholesale vehicle sales rose 18 percent.
The data show that CarMax grew net profit to $95 million, or earnings per share of 41 cents, compared with $88.8 million, or earnings per share of 39 cents in the same period last year. The company’s revenues increased 10 percent to $2.48 billion. The market analysts on average had projected the company’s quarterly earnings per share would reach 40 cents on revenue of $2.41 billion.
Opposite to the increase in earnings, CarMax stock price declined 4.84 percent, or $1.69, to close at $33.23 per share in Thursday’s regular trading. CarMax stock price fell slightly by 0.24 percent, or $0.08 in the after-hours.