Skip links

CarMax record Q1 illustrates used-car market strength

A big jump in vehicle sales helped propel used-vehicle retailing giant CarMax Inc. to record profits in its fiscal first quarter ended May 31.

The nation’s largest used-vehicle retailer reported Friday that net income rose 12 percent to $266.7 million, a first-quarter record. Net sales and operating revenues jumped 12 percent to $5.37 billion.

“CarMax had an outstanding first quarter,” CarMax CEO Bill Nash said in a statement. “I’m proud of our team and its commitment to delivering an exceptional experience to both our retail and wholesale customers, which drove our strong growth in sales, gross profit and earnings.”

CarMax stock closed Friday up 3.18 percent to $85.64.

CarMax retailed 224,268 used vehicles, a 13 percent spike, during its first quarter. Same-store used-vehicle sales rose 9.5 percent compared with a dip of 2.3 percent in the year-ago period. Wholesale-vehicle sales increased 6.6 percent to 120,768.

Per-vehicle profits were stable with used-vehicle retail gross profit per unit remaining at $2,215. The company’s average used-vehicle sales price dropped slightly to $20,050.

CarMax’s auto finance income also rose 0.3 percent to $116 million.

The Richmond, Va., company said that this month it launched omnichannel capability — or the offering of a seamless buying experience to consumers whether they are online or in the store — to most of its Florida dealerships. It also opened a customer experience center in Atlanta, one of three that are planned.

CarMax said its omnichannel capabilities are slated to be available to most of its customers by the end of its 2020 fiscal year, or early 2021. Those omnichannel efforts include online pricing estimates and appraisals, vehicle home deliveries and expedited pickups at stores.

During its first quarter, CarMax opened stores in Waco, Texas; McAllen, Texas; and Memphis, Tenn. It plans to open 14 more stores by the end of May 2020, including four in television markets new to the retailer — Lubbock, Texas; Palm Desert, Calif.; Gulfport, Miss.; and Fort Wayne, Ind. The other stores will be expansions in existing markets.