Shares of CarMax (NYSE: KMX) rallied as much as 13% early Thursday, then settled to close up 5.2% after the used-vehicle retailer announced better-than-expected quarterly earnings. CarMax also resumed its share repurchase program.
On one hand, for its fiscal third quarter ended Nov. 30, Carmax's revenue declined 5.5% year over year to $6.15 billion, technically missing analysts' consensus estimates for sales of $6.3 billion. On the other hand, Carmax's net earnings more than doubled on a year-over-year basis to $82 million, or $0.52 per share, trouncing Wall Street's estimates for earnings of $0.41 per share.
Carmax has strived in recent quarters to maximize its profitability by reducing SG (sales, general, and administrative) expenses, improving its credit mix within the Carmax Auto Finance (CAF) division, and maintaining a strong gross profit per vehicle sold.
Source Fool.com