Cramer says ‘do not sell’ CarMax stock after its Q1 earnings

CarMax Inc (NYSE: KMX) is up 10% on Friday after reporting strong results for its first financial quarter as demand for used cars started to show signs of recovery.

CarMax Q1 financial highlights

• Earned $158.6 million versus the year ago $252.3 million
• Per-share earnings also declined from $1.56 to $1.44
• Adjusted EPS printed at $1.16 as per the press release
• Total sales climbed 17.4% year-on-year to $7.69 billion
• Consensus was $79 cents a share on $7.50 billion revenue

Retail and wholesale combined unit sales were down over 11% in the recent quarter. Still, famed investor Jim Cramer said today on CNBC’s “Squawk on the Street”:

Jim Cramer shares his view on CarMax stock

Other notable figures in the earnings report include average price for used vehicles that came in down 5.5%. CarMax currently has authorisation for $2.45 billion worth of stock repurchase.  

The Richmond-headquartered company bought a total of 343,000 vehicles in the first quarter – a 5.0% year-on-year decline but a material improvement sequentially. Cramer added:

Versus its year-to-date low, CarMax stock is up more than 50% at writing.