CarMax Inc., the nation’s largest used-vehicle retailer, today said net profit in the March-May quarter rose 21 percent to $146.7 million, as used-car unit sales and finance income rose.
Revenue rose 19 percent to a record $3.31 billion in the period, the company’s fiscal first quarter.
“Strong retail sales growth, together with continued contributions from CarMax Auto Finance and wholesale, drove all-time record quarterly revenues and earnings,” CEO Tom Folliard said in a statement.
Used-vehicle sales rose 22 percent to 137,154 units. Used-vehicle revenues rose 23 percent to $2.7 billion, and gross profit rose 22 percent to $303.9 million.
Gross profit on vehicles that were wholesaled to auctions rose 6 percent to $86.5 million, as the number of units wholesaled rose a like 6 percent to 88,356.
CarMax credited a growth in its store base — the company has added 13 stores since the year-earlier period — and a stronger appraisal buy rate for higher sales of wholesale vehicle units.
During a conference call, Folliard said cars that are 5 years old and older represent 20 percent of the company’s sales. He also noted that SUVs and pickups are 25 percent of sales, a consistent number.
Folliard also pointed out that the sales growth might be originating from the company’s Web site, which saw a 28 percent increase in traffic. More and more, he said, CarMax customers are heading to the Web to research vehicles before coming into stores. About 20 percent of CarMax’s Web traffic is coming from mobile devices, Folliard said.
CarMax said a 26 percent increase in revenues from its extended service plan was due to both increased overall unit sales and a higher percentage of its customers electing to purchase the plans.
Income from CarMax’s finance operations increased 16 percent to $87 million, reflecting a 21 percent increase in average managed receivables to $6.15 billion. The company has recently done more business in auto finance.
During the three-month period just ended, the company opened one store in each of three new markets: Harrisonburg, Va.; Savannah, Ga.; and Columbus, Ga. This month, the company opened its fifth store in the Houston area.
In midday trading Friday, CarMax stock was down about 3 percent, trading at $43.07 a share, while most major indices were little changed.