RICHMOND, Va. â€" The used car dealership chain CarMax Inc. reported a 4.8 percent profit increase for its fiscal second quarter on Wednesday as a shaky economy continued to push consumers toward previously owned cars and trucks.
Its overall revenue climbed 13 percent while revenue at its outlets open at least a year rose 4 percent even though last year's sales were boosted by the government's Cash for Clunkers rebate program.
The Richmond, Va.-based company said its net income rose to $107.9 million, or 48 cents per share, in the three months ended Aug. 31. That's up from $103 million, or 46 cents per share, a year ago.
Its revenue rose to $2.34 billion from $2.08 billion a year ago.
The results beat Wall Street estimates. Thomson Reuters says analysts it surveyed expected earnings of 40 cents per share on revenue of $2.27 billion.
CEO Tom Folliard said in a statement that CarMax dealerships had about the same amount of customer traffic as last year's second quarter despite Cash for Clunkers, but the sales force was able to convince more of those people to buy.
"We are especially pleased with the strength of our comparable store used unit sales where, despite our toughest comparison in recent quarters, we still delivered positive comps," Folliard said.
CarMax was able to boost gross profit per used vehicle by $85 to $2,205 as used car prices continued to remain strong. The company said the improvement came because it obtained more of its vehicles directly from consumers, more efficient reconditioning operations and wholesale used car prices that were above last year's numbers.
CarMax runs more than 100 stores that mainly sell used cars and trucks.
Its shares rose 18 cents to $24.30 in pre-market trading.
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