CarMax shares rise on earnings, revenue beat

Investing.com -- CarMax Inc. (NYSE: KMX) shares rose 4.4% in premarket trading after the used car retailer reported third-quarter earnings and revenue that topped analyst expectations, driven by increases in unit sales and strong margins.

The company posted earnings per share of $0.81 for the quarter ended November 30, beating the analyst consensus of $0.61 by 32.8%. Revenue rose 1.2% YoY to $6.22 billion, exceeding estimates of $6.04 billion.

CarMax (NYSE:KMX)'s retail used vehicle unit sales increased 5.4% to 184,243 units, with comparable store used unit sales up 4.3%. Wholesale vehicle unit sales grew 6.3% to 136,013.

"I am pleased with the positive momentum that we are driving across our diversified business model," said Bill Nash, president and CEO. "Our solid execution and a more stable environment for vehicle valuations enabled us to deliver robust EPS growth driven by increases in unit sales and buys, solid margins, growth in CAF income, and ongoing management of SG&A."

Total (EPA:TTEF) gross profit rose 10.6% to $677.6 million, supported by higher unit volumes and strong unit margin performance. Gross profit per retail used unit held steady at $2,306.

CarMax Auto Finance (CAF) income increased 7.6% to $159.9 million, benefiting from growth in CAF's net interest margin percentage and average managed receivables.

The company repurchased 1.5 million shares for $114.8 million during the quarter. As of November 30, CarMax had $2.04 billion remaining under its share repurchase authorization.