There is one school of thought in the used-car market forecasting an impending, drastic drop in used-car prices. But Tom Folliard, CarMax's president and chief executive officer, says he doesn't expect anything extremely volatile to result from the coming months. In fact, he expects things will likely roll out in a predictable manner.

When asked how the declines in used-car pricing were impacting the company’s business model during his company’s most recent quarterly earnings conference call, Folliard said the business was running as expected heading into the winter months.

“The fall is a time when we always see depreciation,” Folliard said. “We’ve had some anomalies going into the recession and coming out of the recession, but in a normal year, you expect some appreciation in January through the spring, and then you expect some depreciation throughout the rest of the year all the way through December.

“I think we’ve proven that we can manage in all kinds of different volatile environments, and this one is not as volatile as we’ve seen in the past. We view this as, I don’t want to say ‘business as usual,’ but it’s normal depreciation that we see during a third quarter,” Folliard continued, referring to the fiscal period ending Nov. 30. 

When asked about the situation with his company in regards to investor concern over dropping used-car prices, Folliard remained optimistic.

“Whatever the market delivers, we’ve done a pretty decent job of navigating through it,” Folliard said. “I’m always a believer that lower prices are better for the consumer, and we turn our inventory quick enough that we can manage the margins in a declining environment. But I’m also not a believer that we’re going to see this giant decline in car prices because there’s some tidal wave of supply coming our way. I think things tend to find a way to equal out.”

CarMax held the conference call after announcing its results for the fiscal third quarter (period ending Nov. 30) shortly before the holidays. Among the highlights, the company noted a substantial increase in its total used unit sales (14 percent year-over-year). CarMax also reported a 10-percent increase in total wholesale unit sales. Its net earnings of $130.0 million was a 22.2-percent increase. Net earnings per diluted share of $0.60 marked a 27.7-percent hike. 

“We had another great quarter,” Folliard said in the earnings release. “Continued strong performance in our used, wholesale and CAF operations, along with the growth of our store base and our ongoing share repurchase program, contributed to our record third quarter earnings per share.”