Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: Shares of CarMax (NYSE:KMX) were up 9.7% as of 11:35 a.m. Thursday after the used car retailer announced better-than-expected fourth-quarter results.
Quarterly revenue climbed 14.2% year over year to $3.51 billion. For that, investors can thank a 12.4% increase in total used vehicle unit sales, driven by both the openings of 13 new stores during the fiscal year and comparable-store used unit sales growth of 7%. Meanwhile, net earnings grew 44.3% to $143.1 million. Keeping in mind CarMax repurchased 17.5 million shares at a cost of $912.8 million over the course of the year, fourth-quarter earnings per share rose 52.3% to $0.67.
Analysts, on average, would have settled for earnings of $0.60 per share on sales of $3.50 billion.
Why it's happening: CarMax credits its solid comparable-store sales growth to both increased traffic and improved conversion. CarMax CEO Tom Folliard elaborated, "In fiscal 2015, the continued strong performance of our used, wholesale and CAF [CarMax Auto Finance] operations, along with the growth of our store base and our ongoing share repurchase program, contributed to our record earnings per share."
CarMax also intends to continue that momentum going forward. At the end of the quarter, CarMax had $2.37 billion remaining under its current share repurchase authorization. And from its store count of 144 as of Feb. 28, CarMax outlined plans to open between 13 and 16 new stores in each of its next three fiscal years. Finally, during the current fiscal year, it plans to remodel approximately 15 older stores.
In the end, given CarMax's continued outperformance and ambitious plans for the future, it's no surprise investors are bidding up the stock today.