Despite “cash for clunkers” grabbing headlines earlier this year, the biggest used-car dealer in the U.S. reported strong earnings growth in the last three months.
The government's $4500 incentive for consumers to trade in gas guzzlers for new cars didn't deter CarMax, Inc (NYSE:KMX) customers.
Chief executive officer Tom Folliard pointed to a key measurement in the retail industry to note the progress.
“We are pleased to report our second consecutive quarter of comparable store used unit sales growth,” he said today, as the company released its third quarter results.
Comparable store sales were up 9 percent for the three months ending November 30. Sales have yet to fully recover, he noted.
“[W]hile sales and traffic appear to be gradually improving, they remain substantially below the levels of two years ago,” he said.
The nation’s economic troubles have given the company some challenges, especially in the timing of new store openings.
The company said today that three used car superstores built in fiscal 2009 won’t open until the first half of fiscal 2011.
The company said today it could pursue “opportunistic” real estate buys to support long-term store growth but did not plan to restart “at this time.” It currently has more than 100 stores nationwide
Meanwhile, on Wall Street, investors gave the company’s performance a thumbs-up.
Shares in the retailer were up more than 6 percent by the end of the trading day.