By MICHAEL FELBERBAUMAP Business Writer
RICHMOND, Va. (AP) - Car dealership chain CarMax Inc. said Friday that higher sales of used cars drove its first-quarter profit up more than 21 percent.
The results beat Wall Street expectations and its shares rose in morning trading.
The Richmond, Va.-based company, which runs more than 120 stores in 61 markets that mainly sell used cars and trucks, reported earnings of $146.7 million, or 64 cents per share, for the three-month period ended May 31, up from $120.7 million, or 52 cents per share, a year ago.
Revenue grew 19 percent to $3.31 billion.
Analysts polled by FactSet expected earnings of 58 cents per share on revenue of $3.17 billion.
Its shares rose 58 cents, or 1.3 percent, to $45.15 in morning trading Friday after rising as high as $48.19 earlier. That was near its 52-week high of $48.86.
Sales at stores open at least one year rose 17 percent. The figure is a key metric because it strips out the impact of newly opened and closed locations.
CarMax noted that it has benefited from a better consumer credit environment, with about 90 percent of its customers receiving a financing offer from one of its lenders.
Used vehicle unit sales rose 22 percent as the company's average selling price rose more than a percent to $19,540. Wholesale vehicle unit sales increased 6 percent during the quarter. New vehicle unit sales, which make up a smaller part of CarMax's business, fell 7.5 percent. Other revenue, which includes fees it receives from third-party lenders its customers use, increased more than 4 percent.
Its total gross profit - its profit after reconditioning and other costs - grew 17 percent during the quarter. Gross profit per used vehicle sold was essentially flat at $2,216 and wholesale gross profit per vehicle fell $1 to $980.
Income from CarMax's auto financing arm rose nearly 16 percent to $87 million in the quarter as it financed more of its customers' vehicles.
Expenses increased 14 percent to $290.2 million as the company's store base grew 12 percent and spent more on selling costs due to higher sales.
CarMax has been trying to lower expenses, and improve traffic, execution and gross margins to position it for future growth. For example, the company has improved its sale and appraisal rates and lowered the costs for reconditioning vehicles.
The company also said Friday it plans to open between 10 and 15 stores in each of the next two fiscal years. CarMax said it repurchased 2.9 million shares of stock for $124.6 million during the quarter.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.