CarMax reports flat quarterly profits as wholesale prices fall
RICHMOND, Va. (Reuters) -- CarMax Inc., a retailer of new and used cars, posted flat quarterly profits as sales at its wholesale unit fell and costs jumped.
Net income during the second fiscal quarter was $111.6 million, or 48 cents per share, compared with $111.2 million, or 48 cents per share, a year earlier.
Revenue jumped 7 percent to $2.76 billion.
The largest retailer of used cars in the United States has been grappling with lower used-vehicle supply and increasing competition from new car dealers.
CarMax said it continued to buy fewer cars from people visiting its stores for the second consecutive quarter.
Wholesale car pricing, which has buoyed performance in the past, has now declined for two straight quarters.
Wholesale unit sales fell 2 percent to 82,771. Sales at the business unit had risen 23 percent a year earlier.
The company, which competes with America's Car-Mart, said general costs rose 11 percent as it opened three new stores in the quarter.
CarMax, which began as a unit of the now-bankrupt Circuit City Stores, said it plans to open a total of 10 stores in the current fiscal year.
Analysts on average expected earnings of 52 cents per share, excluding items, on revenue of $2.75 billion, according to Thomson Reuters.
CarMax ranks No. 77 on the Automotive News list of the top 125 U.S. dealership groups with new-vehicle sales of 8,231 units in 2011.Contact Automotive News