CarMax Shares Climb, Earnings Fall
June 21, 2009 by Stephen Kersey
Filed under Business
At face value, the fiscal first quarter report for CarMax looks negative. Profit was down, revenue was down and sales were down. But in the end, Wall Street saw the report as good news.
In the first quarter of 2009, CarMax profited $28.7 million. Last year, CarMax posted a profit of $29.6 million. That drop in year-over-year profit was almost 3%.
Car sales were down a total of 17% — 13% for used cars and 42% for new cars. The drop in sales isn’t a surprise considering that the national economic crisis has left few people with disposable income.
Despite that news, CarMax soared from $13.09 to $15.31 — a jump of about 17%. Many experts believed that CarMax’s numbers would be much worse and that they’d barely post a profit. By posting a relatively healthy profit, the auto retailer was able to improve confidence among investors.
CarMax was founded in 1993 and is already the largest seller of used cars in the United States. The company has approximately 100 locations in the U.S.
CarMax (Image: Flickr)
