Carvana, still eyeing massive growth, climbs on earnings beat

Used car retailer Carvana reported its second-quarter earnings after the bell on Wednesday, and the company’s ambitious growth plan is still hitting the gas.

Carvana reported earnings per share of $1.28 on revenue of $4.84 billion and profit of $308 million, beating expectations on every metric. Analysts polled by FactSet expected earnings of $1.17 per share on revenue of $4.58 billion and profit of $267 million.

Carvana shares climbed over 11% in after-hours trading.

The second quarter was the first to feel the effect of tariffs, which experts have expected to ultimately boost used car sales, due to the new vehicle price hike. Carvana sold 143,280 retail units on the quarter, up 41% from last year’s 101,440 units. Wall Street expected more than 142,300 used retail sales.

Rapid expansion is Carvana’s goal: last quarter, the retailer said it’s aiming to sell 3 million retail units annually within 5 to 10 years. That’s more than 5x the figure Wall Street expects Carvana to reach this year (about 566,000 units). To achieve its lofty target, Carvana will need to maintain annual sales growth of between 18% and 43%, implying significant expansion of its market share.

Carvana’s retail success gets it closer to its rival CarMax, which sells significantly more used vehicles to customers despite having a market share of more than $60 billion less than Carvana’s. CarMax sold more than 230,000 retail units in its first quarter, which ended in May.