10:25 AM EDT, 09/26/2024 (MT Newswires) -- CarMax ( KMX ) on Thursday reported mixed fiscal second-quarter results, with earnings falling short of Wall Street's estimates and revenue topping expectations.

The company posted earnings of $0.85 a share for the quarter ended August, up from $0.75 the year before but fell shy of the Capital IQ-polled consensus of $0.86. Sales and operating revenue edged down 0.9% to $7.01 billion. The Street's view was for $6.83 billion.

"We are pleased with the continued improvement of the business in the second quarter, which reflects the positive impact of our durable actions," Chief Executive Bill Nash said in a statement. "We grew retail used unit sales, delivered strong margins, continued to manage (selling, general and administrative expenses), and drove double-digit earnings growth while managing through industry wide auto loan loss pressure."

Revenue from retail used-vehicle sales improved 1.5% to $5.68 billion, while wholesale revenue fell 13% to $1.15 billion. Comparable-store sales for used vehicles gained 4.3%, better than the 1.3% increase modeled by analysts.

Retail used unit sales rose 5.1% to 211,020 vehicles, despite lower average selling prices. Total wholesale vehicle volume dipped 0.3% to 141,458 units. Income in its auto financing segment slipped 14% to $115.6 million, due to an increase in the provision for loan losses, according to the company.

"We have been anticipating higher loss provisions for some time based on securitization trust trends and a higher unemployment rate," Wedbush Securities said in a client note.

CarMax ( KMX ) said it bought 300,000 vehicles from consumers and dealers in the quarter, up 2.9% from a year earlier, but down from the 314,000 cars purchased in the prior three-month period.

"Our diversified business model is well-positioned to drive future increases in sales and profitability as we further leverage our omni-channel capabilities," Nash said.

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