CarMax Inc. net earnings rose 16 percent to $169.7 million in its first fiscal quarter, from the year-earlier period, on higher retail and wholesale unit sales and income from its captive finance unit, the company said today.
Revenues at the nation’s largest used-vehicle retailer increased 13 percent to $3.75 billion in the quarter ending May 31.
CarMax’s retail used-vehicle sales grew 10 percent to 150,528 units. Wholesale unit sales also grew 10 percent, to 97,098.
The average retail selling price of a CarMax used vehicle climbed 3 percent in the quarter to $20,173, marking the first time it had exceeded $20,000.
CEO Tom Folliard attributed the increase to higher-than-typical used-vehicle prices at the wholesale, or auction, level this spring.
“I don’t like pricing going up. I’d rather have price go down,” Folliard said. “Our margins per car were flat so it was clearly a reflection of what the market was doing.”
CarMax Auto Finance income increased 9 percent to $94.6 million as a result of an increase in average managed receivables and partly offset by a lower total interest margin, the company said. Average managed receivables grew 20 percent to $7.39 billion.
The Richmond, Va., company opened four stores in the quarter, three of which were in markets new to CarMax.
CarMax entered the markets of Rochester, N.Y., Dothan, Ala., and Spokane, Wash., with one new store in each. Another store was added in the Harrisburg and Lancaster, Pa., area, a market where CarMax already was selling.
This month, the company opened its first store in the Madison, Wis., market. Folliard said a total of 13 store openings are planned for the fiscal year ending Feb. 28, 2015.