American consumers had more than holiday shopping on their mind during the third quarter as evidenced by record sales results from CarMax. The nation’s largest seller of used cars with 103 superstores nationwide said its same-store sales increased 16% during then third quarter ended November 30. Total sales increased by 23% to slightly more than $2.1 billion and earnings per share of 36 cents were two cents better than analysts forecast.
The quarterly comp gain was the company’s strongest in several years and driven by several factors, according to president and CEO Tom Folliard.
“The increase in used unit sales was fueled by both a continued rebound in customer traffic and an improvement in sales conversion. We believe a portion of the rise in sales conversion reflected improvements in consumer credit availability,” Folliard said.
The dynamics of automotive retailing are no doubt different than conventional retail channels, but any retailer who reports a double-digit comp gain in the current economic climate is worth taking note of, especially when improved credit availability is cited as a contributing factor.