Why CarMax Stock Popped 10.9% in June

The used-car retailer is enjoying strong demand for its services.

Joe Tenebruso
Joe Tenebruso
Jul 4, 2019 at 12:28PM
Consumer Goods

What happened

Shares of CarMax (NYSE:KMX) rose more than 10% last month, according to data provided by S&P Global Market Intelligence, following its first-quarter earnings release.

So what

The auto dealer saw revenue rise 12% year over year to $5.37 billion. Earnings per share, meanwhile, leapt 19.5% to $1.59. Both figures were well above Wall Street's estimates for revenue of $5.18 billion and EPS of $1.49.

Used-unit sales in comparable stores rose an impressive 9.5%, driven in part by strong web traffic growth. The company said customer experience initiatives, a robust lending environment, and a shift in the timing of customer tax refunds into the first quarter also contributed to the gains.

"CarMax had an outstanding first quarter," CEO Bill Nash said in a press release. "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."

A car-buying agreement, a pen, and a car keychain.

Image source: Getty Images.

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Now what

CarMax expects to open 14 new stores over the next year. The company also plans to make its omnichannel experience -- which combines online shopping with in-store service options -- available to the majority of customers by the end of fiscal 2020.

"We believe that no other company is in a better position to deliver this omnichannel experience efficiently and profitably," Nash said. "This is truly an unmatched experience that we are confident is the future of car buying."