Used-car dealer CarMax
A quick look at the quarter
CarMax reported operating revenue of $2.59 billion, good for more than 11% growth. A 23% surge in wholesale-unit sales was reflected in the gross profit, which increased by 2% to $354.3 million. Peers AutoNation
However, softened consumer traffic caused by weak economic conditions hit the used-car dealer's comparable-store sales, which decreased by 2%.
Already running more than 105 stores, CarMax has opened one store in the second quarter and plans to open two more in fiscal 2012, and six in the first half of fiscal 2013. The continued rise in the number of stores should also contribute to sales growth.
The Foolish bottom line
Even in a depressed automotive market, CarMax has managed to show positive growth in both its top and bottom line. The decline in same-store sales is mainly due to low consumer confidence and softened consumer traffic. I believe that as consumer spending improves, revenues should strengthen further. It looks to me as if the sell-off was a bit of an overreaction.