(Reuters) – CarMax on Thursday reported its first quarterly sales increase in more than two years, in an early sign that the used car market was rebounding from months of slump, sending the retailer’s shares up more than 6% before the bell.
The company also beat analysts’ expectations for third-quarter revenue and profit.
Used car retailers have grappled with sluggish sales in recent quarters as consumers opted for better deals on new vehicles equipped with improved features.
Their profit margin took a hit as they offered discounts to offload inventory bought at inflated prices during the pandemic’s supply crunch.
CarMax in June had also flagged inflationary pressures hitting consumers during the year, which impacted vehicle affordability.
Lower prices, however, have helped win back some consumers.
Richmond, Virginia-based CarMax reported profit of 81 cents per share for the quarter through Nov. 30, compared with average analyst expectation of 61 cents per share, according to data compiled by LSEG.
Its revenue increased 1.2% to $6.22 billion, also beating expectations of $6.04 billion, as retail and wholesale vehicle sales rose in the quarter.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shilpi Majumdar)
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