By Dhirendra Tripathi
Investing.com – CarMax stock (NYSE:KMX) jumped 5% in Wednesday’s premarket trading after another quarter of record revenue.
Used-car retailers like CarMax and Carvana (NYSE:CVNA) have had a string of record quarters for more than a year as a long waiting period for new cars, fueled by a global shortage of chips, has driven consumers to second-hand vehicles. As a result, dealers have bought more cars and sold them at even higher prices, which has also reflected in U.S. consumer prices being at a 39-year high.
Average selling prices for both retail and wholesale rose strongly, by about 31% and 58% on the year, respectively.
The company purchased 383,215 vehicles from consumers in the third quarter ended November 30, a 91% increase year-on-year.
CarMax sold 415,054 units through its combined retail and wholesale channels, more than 29% higher from the prior-year quarter.
The company said online was driving both sales and purchases of vehicles, a result of digital solutions facilitating quicker appraisals. Revenue from online transactions was around 30% of the total, a good 10-percentage point jump from a year earlier.
Selling, general and administrative expenses rose about 34%, owing to higher compensation to staff and spending on technology to cater to strong demand.
Third-quarter net revenue climbed over 64% to $8.5 billion. Adjusted net profit per share rose about 15% to $1.63 to beat estimates.