For its first quarter ended May 31, used car retailer CarMax (NYSE:KMX) reported earnings of $39.8 million, or $0.37 per share, up 12.7% from $35.3 million, or $0.33 per share, a year ago. Excluding a one-time gain, the company's earnings were just $0.34 per share. Not that Fools are overly concerned with what analysts are expecting, but I think it's worth noting that CarMax missed their estimates of $0.36 per share even after lowering expectations last month to a range of $0.35 to $0.36 per share.

Sales, however, came in just ahead of expectations, accelerating 19% to $1.58 billion from $1.33 billion in last year's quarter. However, that was largely the result of momentum from the end of the fourth quarter. CarMax was still cruising in March, but began slowing down in April, slowing even further in May.

For the second quarter, as it stands now, CarMax would have to come in at the upper end of its expectations of $0.29 to $0.34 per share to avoid disappointing the Street once again. If its results fall to the low end, they would be just a penny ahead of last year's results, which were somewhat disappointing in my own view.

CarMax is a bit more optimistic about its longer-term sales growth expectations. The company said it expects revenue to nearly double to between $10 billion and $12 billion by fiscal 2010. It plans to accomplish this feat by expanding its store base by 15% to 20% each year. That pace seems ambitious even for CarMax, which has always been aggressive in adding to its plethora of locations. New locations will continue to boost the company's sales results, but may hamper earnings growth until those locations become fully productive.

Overall, I expect CarMax to perform well and reward long-term investors as it leverages its leadership position within the used car sales niche. However, as the company continues its aggressive expansion, investors will likely continue to be taken on a wild ride. It's up to those investors to decide if the destination justifies that potentially bumpy road.

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Fool contributor Mike Cianciolo welcomes feedback and doesn't own shares of CarMax.