It’s been less than a year since CarMax (NYSE: KMX) took its digital buying platform completely online, but shareholders are already seeing benefits from the move. The used car retailer on Thursday announced record sales through late August, including in the e-commerce channel.CarMax’s results weren’t all positive, though, as increasing costs reduced profitability.
But the chain is still finding plenty of resources to fund its new store launches as it works to build on its market-share lead in this fragmented industry.
Let’s take a closer look at the summer operating trends as reported in the company’s second-quarter earnings, released Thursday.
CarMax reported sales wins, especially in e-commerceSales volumes landed at 420,000, up 20% compared to a year ago. That prior-year period was depressed thanks to the pandemic, but CarMax also set a Q2 record in its retail segment and an all-time quarterly record in wholesale sales. Both increases also came with higher average selling prices, which contributed to a 49% overall sales spike in the quarter. Most investors who follow the stock were expecting more modest revenue growth.
The digital selling platform had an especially strong quarter. Car shoppers embraced CarMax’s online appraisal product for their trade-ins, and online transactions jumped to 28% of the total business, up from 18% a year ago. That figure has room to grow over time as CarMax makes the online buying process more convenient