December 16, 2024

CarMax Results Boosted by Improved Retail Unit Sales

business people have a meeting about company statistics
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Key Takeaways

  • CarMax posted an increase in retail unit sales in the second quarter, and earnings and revenue came in above estimates.
  • Comparable store unit sales increased 4.3% year-over-year.
  • CEO Bill Nash noted the positive results came even as the industry faced “auto loan loss pressure.”

CarMax ( KMX ) shares drove higher Thursday after the biggest U.S. used car retailer posted better-than-anticipated results on higher retail vehicle sales.

The company reported fiscal 2025 second-quarter earnings per share (EPS) of $0.85, $0.02 more than the estimate by analysts surveyed by Visible Alpha. Although revenue slipped 0.9% year-over-year to $7.01 billion, that also exceeded forecasts.

Retail Used Unit Sales Jump 5.1%

Retail used unit sales increased 5.1% to 211,020, while wholesale vehicle sales declined 0.3% to 141,458. Comparable store unit sales gained 4.3%.

Gross profit per retail unit was $2,269 and $975 per wholesale unit. Both were in line with last year’s second quarter.

The company bought 300,000 vehicles in the period, a 2.9% increase, driven by a 61.4% jump in purchases from dealers. Purchases from consumers dropped 1.2%.

CEO Says Managing Through ‘Auto Loan Loss Pressure’

Chief Executive Officer (CEO) Bill Nash explained that CarMax was pleased with the “continued improvement of the business” while managing through “industry-wide auto loan loss pressure.”

CarMax shares advanced about 6% in late-morning trading Thursday to move into positive territory for 2024.

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