CarMax Reports First Quarterly Sales Increase in Over Two Years

(Reuters) – CarMax (NYSE: KMX) on Thursday reported its first quarterly sales increase in more than two years, signaling a potential rebound in the used car market after months of decline. This news led to a more than 6% rise in the retailer's shares before the market opened.

The company also exceeded analysts' expectations for third-quarter revenue and profit.

Used car retailers have faced sluggish sales lately as consumers turned to new vehicles with better features. This shift has affected profit margins, leading retailers to offer discounts to clear inventory purchased at inflated prices during the pandemic's supply crunch.

In June, CarMax highlighted inflationary pressures affecting consumer purchasing power, which impacted vehicle affordability. However, lower prices have attracted some customers back into the market.

Based in Richmond, Virginia, CarMax reported a profit of 81 cents per share for the quarter ending November 30, surpassing the average expectation of 61 cents per share, according to data compiled by LSEG. Its revenue increased by 1.2% to $6.22 billion, also beating expectations of $6.04 billion, as both retail and wholesale vehicle sales rose during the quarter.