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What's happening?
Shares of CarMax (KMX 2.67%) jumped more than 10% early Friday after the used car retailer announced better-than-expected fiscal third quarter results.
Why it's happening
Quarterly operating revenue rose 15.8% to $3.41 billion, helped by a 14% increase in total unit sales. That includes a 10% increase in total wholesale unit sales, and 7.4% growth in used unit sales for comparable locations. CarMax has opened 12 new stores through the first nine months of this fiscal year.
Meanwhile, net earnings increased 22.2% to $130 million, and 27.7% on a diluted per share basis to $0.60. The latter figure was bolstered by CarMax's decision to repurchase 6.2 million shares of common stock during the quarter for $327.2 million. As of Nov. 30, CarMax had $2.58 billion remaining under its current repurchase authorization.
Analysts, on average, were only modeling earnings and revenue of $0.54 per share and $3.25 billion, respectively.
Going forward, CarMax also stated it intends to open 13 new stores in fiscal year 2015, and between 10-15 during each of the following two fiscal years. All things considered, from solid growth across all fronts, to CarMax's share repurchases and future plans, investors are understandably happy with these results.
