CarMax (KMX 67.75, -0.72) is down 1.1% despite reporting in-line earnings.
The used vehicle dealer reported in-line third quarter earnings of $0.81 per share on an 11.0% year-over-year increase in revenue to $4.11 billion, which was a bit ahead of expectations.
Comparable store used unit sales increased 2.7% year-over-year while total used vehicle unit sales rose 8.2% to 169,648. The increase in comparable store sales was driven by higher conversion rates that were partially offset by lower store traffic. The company noted that sales in hurricane-affected markets fueled the increase in sales.
Used vehicle sales grew 10.8% year-over-year to $3.43 billion while Wholesale vehicle sales rose 13.2% year-over-year to $552.80 million.
Other sales grew 5.1% to $128.70 million. The increase took place due to higher extended protection plan revenues that were partially offset by lower net third-party finance fees.
Total gross profit grew 7.2% to $539.20 million with used vehicle gross profit growing 7.9% thanks to an 8.2% increase in total used unit sales. Wholesale vehicle gross profit grew 13.1% thanks to a 9.1% increase in Wholesale unit sales.
CarMax Auto Finance reported a 15.1% year-over-year increase in income to $102.80 million Growth in average managed receivables and a decline in the provision for loan losses were partially offset by lower total interest margin percentage.
The company opened five stores during the quarter, entering a new television market in Tyler, Texas.