CarMax, Inc. ( KMX ) shares are trading higher after the company reported third-quarter earnings results.

Quarterly sales of $6.223 billion beat the street view of $6.042 billion. The company reported earnings per share of 81 cents, beating the analyst consensus estimate of 64 cents.

CarMax Auto Finance income was $159.9 million, an increase of 7.6% year over year, driven by an improvement in CAF’s net interest margin percentage and higher average managed receivables.

The provision for loan losses was consistent with expectations set at the end of the second quarter of this year.

Retail used unit sales rose by 5.4% Y/Y, comparable store used unit sales increased by 4.3% Y/Y and wholesale units increased 6.3% Y/Y.

Gross profit per retail used unit was $2,306 (flat Y/Y), and gross profit per wholesale unit was $1,015 (up $54 per unit Y/Y). The Extended Protection Plan margin increased by $53 per retail unit to $573.

In the third quarter of fiscal year 2025, the company repurchased 1.5 million shares of common stock for $114.8 million. As of November 30, 2024, the company had $2.04 billion remaining available for repurchase under the outstanding authorization.

The company exited the quarter with cash and equivalents worth $271.9 million. Restricted cash from collections on auto loans receivable totaled $541.15 million. Inventories at quarter-end was $3.665 billion.

Bill Nash, president and chief executive officer, said, ”Our solid execution and a more stable environment for vehicle valuations enabled us to deliver robust EPS growth driven by increases in unit sales and buys, solid margins, growth in CAF income, and ongoing management of SG&A.” 

During the third quarter of fiscal 2025, the company opened one new store in Alliance, Texas.

Investors can gain exposure to the stock via Valued Advisers Trust Kovitz Core Equity ETF and Invesco Bloomberg Analyst Rating Improvers ETF ( UPGD ) .

Price Action: KMX shares are trading higher by 6.44% to $86.66 premarket at last check Thursday.

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