CarMax Inc., the major national car seller, shows higher sales and profit for its latest quarter. CarMax has a chain of more than 222 retail stores. The company sells, finances and services used and new cars. CarMax’s target market is 0-10-year-old used cars. Used-vehicle sales account for about 85% of the revenue. The company said car sales picked up in the summer months of July and August. Auto sales have risen in the past few months as COVID-19 restrictions have eased. As a result, customers have felt confident to resume their normal spending habits. In turn, CarMax adjusted to the reality of the pandemic cutting back on its operations to reduce costs.
A second-quarter profit of $296.7 million, or $1.79 a share compared to a profit of $233.6 million, or $1.40 a share, in the same three-month period a year earlier. An expected profit of $1.10 a share, analysts polled by FactSet expected. Reports indicate CarMax’s revenue was $5.37 billion, up from $5.2 billion in last year’s second quarter.
Negative Comparable Sales, Positive Comparable Used-Car Sales
In June, the company says it experienced negative comparable sales for used cars in June. Furthermore, the positive comparable used-car sales in July and August offset the previous negative sales. Overall, same-store CarMax sales of used cars grew by 1.2% year over year in the second quarter. Compared with last year’s second quarter, wholesale car sales were up by 5.1%.
Omnichannel Update Selling Vehicles Online, in the Store, and “Something In Between”
CarMax management said their Omnichannel rollout is complete. However, it will require ongoing investment. Now, the company has the ability to sell vehicles completely online, completely in-store, and something in between. CarMax is of the opinion their Omnichannel rollout is superior to an online-only or in-store only concept. They believe it increases the addressable market they cater to with expected future revenue growth.