CarMax (KMX) said Friday its profit climbed 12% in the third quarter, as the used car seller posted double-digit revenue growth.
But shares tumbled 9.7% to $47.89 in early morning trading after the company just missed Wall Street estimates.
CarMax’s net income rose to $106.5 million, or 47 cents a share, from $94.7 million, or 41 cents a share, in the same period last year. Revenue jumped 13% to $2.94 billion, and gross margin narrowed to 13% from 13.3%.
Analysts were looking for EPS of 48 cents and revenue of $2.89 billion.
CarMax, the nation’s largest seller of used vehicles, has benefited from growing demand for used cars due to the slow economic recovery. It said the number of cars it sold grew 15%, or 10% on a same-store basis, in the latest period.
The company’s finance unit logged an $83.9 million profit, up 16%, as loan originations continued to rise.
On Friday, the Richmond, Va.-based CarMax unveiled a one-year, $70 million plan to explore giving loans directly to subprime borrowers who normally would be financed by third-party providers.