CarMax (KMX 71.30, +2.46) has jumped 3.6% after beating second quarter expectations. Today's advance has lifted the stock to its best level since the middle of 2015 when CarMax was backing off its record high of $75.40 that was notched in April 2015.
The used car dealer reported above-consensus second quarter earnings of $0.98 per share on a 9.7% year-over-year increase in revenue to $4.39 billion, which also exceeded estimates.
Total used unit sales increased 11.1% year-over-year while used unit sales in comparable stores grew 5.3% year-over-year. The comparable sales growth rate was fueled by improved conversion. The company attributed the improvement to its digital initiatives and stronger execution by store teams. Six stores in Houston were closed for the bulk of the final week of the quarter, modestly pressuring the comparable sales growth rate.
Wholesale unit sales ticked up 0.4% year-over-year thanks to growth in the company's store base and higher appraisal buy rate. These factors were partially offset by a decline in appraisal traffic.
The average selling price of used vehicles ticked up 0.7% year-over-year to $19,667 while the average selling price of wholesale vehicles fell 3.2% year-over-year to $4,957. Gross margin improved to 13.77% from 13.64% one year ago.
The company opened three stores during the quarter, entering a new television market in Salisbury, MD and adding two stores in existing markets in San Francisco, CA and Hartford, CT.