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The Board of Directors of CarMax, Inc. (KMX - Analyst Report) approved an extension of its existing share repurchase program to $500 million from $300 million due to its confidence in the business and ability to deliver its growth objectives. The extended authorization will expire on Dec 31, 2014.

On Oct 17, 2012, CarMax’ board authorized the repurchase of up to $300 million of its common stock, which was supposed to expire on Dec 31, 2013. As of Nov 30, 2012, the company has repurchased 1.7 million shares of its common stock for an average price of $34.53, leaving $239.8 million available for repurchase.

CarMax saw a 13.9% rise in earnings per share to 41 cents in the third quarter of fiscal 2013 ended on Nov 30, 2012 from 36 cents in the year-ago quarter. The EPS surpassed the Zacks Consensus Estimate by 2 cents. Net income escalated 15.3% to $94.7 million from $82.1 million in the year-ago quarter.

Net sales and operating revenues for the quarter climbed 15.1% to $2.60 billion, beating the Zacks Consensus Estimate of $2.46 billion. Revenues from used vehicle sales improved 17.1% to $2.1 billion due to higher unit sales. Unit sales went up 16.3% to 105,815 units and average selling price marginally increased to $19,344.

However, revenues from new vehicle sales declined 0.7% to $45.7 million, due to a 0.8% fall in sales volume to 1,705 vehicles. Average selling price inched up to $26,681.

CarMax is one of the largest retailers of used vehicles. The company pioneered the used car superstore concept with the inauguration of its first store in 1993. It operated around 117 used car superstores in 58 markets as of December 20, 2012.

CarMax benefits from its focus on the used-vehicle market, which will help it outgrow its peers. Moreover, the company’s inventories are closely aligned with sales trends, which optimize gross profit per vehicle sold while offering great value to customers. Currently, it retains a Zacks Rank #2 (Buy).

Besides CarMax, other stocks in the auto retailers industry that are currently performing well include AutoNation Inc. (AN - Analyst Report), Lithia Motors  Inc. (LAD - Snapshot Report) and Rush Enterprises, Inc. (RUSHA - Snapshot Report). All these companies carry a Zacks Rank #1 (Strong Buy).

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