Net income improved 21.8% to $220.9 million while diluted EPS grew 26.5% to $1.24, benefitting from a lower tax rate.
CarMax saw sales increases across all its segments. Total used unit sales rose 5.8% while wholesale unit sales grew 14.6%. Wholesale unit sales benefited from higher appraisal traffic and buy rate as well as a growth in the store base. CarMax Auto Finance income improved 1.6%.
Total gross profit increased 7.7% during the quarter versus the prior-year period. The company incurred higher expenses due to a growth in its store base and investments in its technology platforms and core strategic initiatives.
During the second quarter, CarMax opened three stores. The company added two stores in the existing television markets of New Mexico and Oklahoma, and entered the Georgia television market. During the 12 months ending August 31, 2019, CarMax plans to open 15 stores across various markets.
Earnings Preview: Higher costs might drive CarMax profits down