CarMax’s used-vehicle unit sales in its fiscal third quarter were down 1.2 percent against comparable stores in the year-ago period.
But pre-tax earnings and earnings per share for the retailer were up, something president chief executive Bill Nash called a “testament to the strength of our diversified business model,” in a news release recapping CarMax’s quarterly performance for the period ending Nov. 30.
In a summary of the quarterly results, which were announced on Dec. 21, CarMax said pulled in net sales and operating revenue of $4.30 billion in its Q3, a 4.6-percent year-over-year gain.
Net earnings were at $190.3 million, up 27.9 percent. Net earnings per diluted share came in at $1.09, up 34.6 percent.
CarMax notes that its net earnings “benefited from a decrease in the effective tax rate to 23.2 percent from 33.9 percent in the prior year’s third quarter, primarily reflecting the effect of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”).”
Continuing on with some of the highlights of the period, CarMax increased its total used vehicle unit sales by 2.3 percent, moving 173,476 cars for the quarter. The aforementioned dip in comparable store used unit sales was due largely to softer store traffic, a trend partially balanced by better conversion.
A year ago, CarMax saw a lift in comparable store used unit sales helped by its six stores in the Houston area, following Hurricane Harvey. The company said that “excluding these stores from the calculation, our current quarter comparable store used unit sales would have grown by 2.3 percent.”
Elsewhere, CarMax saw a 10-percent hike in total wholesale unit sales, as it moved 110,403 of these vehicles for the quarter.
Income for the CarMax Auto Finance unit came in at $109.7 million, a 6.7-percent uptick.
“We are pleased to report solid growth in both pretax earnings and earnings per share, despite having soft comparable store used unit sales this quarter,” Nash, the CEO, said in a news release. “This is a testament to the strength of our diversified business model.
“We are also excited to introduce our omni-channel experience in Atlanta, where consumers can now customize their car buying experience, whether they want to buy a car completely from home, in-store or, most importantly, through a seamlessly integrated combination of online and in-store experiences,” he said.
That initial launch of the new CarMax buying experience in Atlanta was announced on Dec. 4. CarMax said at the time it plans on eventually making it available nationally to most customers by early 2020.
“We’re delivering on an unmet customer need for a car buying experience that is flexible, convenient, and fully personalized, with the ability for customers to get help when and how they want,” Nash said in a news release when the omni-channel experience was announced.
“The Atlanta launch is only the beginning. We plan to continuously improve the new omni-channel offering and scale nationwide. We anticipate having this new buying experience available to the majority of our customers by February 2020.”
Through the omni-channel offering, consumers are able to conduct their entire purchase from home — taking care of things like finance, appraisal and paperwork without going to the store.
CarMax will deliver to home or work and lets the consumer test-drive before the purchase is complete. Customers are not required to buy before the car is delivered.
They can also choose to utilize the in-store pickup after completing the majority of the deal online.
Shoppers can reserve a car for seven days; and if they buy, they can return it within seven days for a full refund.