A view of the CarMax dealership on April 10, 2025 in Santa Rosa, California.
Justin Sullivan | Getty Images
shares of carmax Shares fell 9% Wednesday after the company beat Wall Street’s quarterly profit expectations and its new CEO detailed the company’s high-level turnaround strategy.
Here are the company’s first fiscal quarter results compared to average estimates compiled by LSEG:
Earnings per share: $1.31 vs. 95 cents expected Earnings: $8.01 billion vs. $7.42 billion expected
Despite the strong performance, questions remain about the company’s ability to grow as planned and reduce costs in the face of challenging market conditions. The used car retailer reported margin pressure and lower gross profit per retail used car.
CarMax’s gross profit was $854.4 million, down 4.4% compared to the first quarter of last year. The company said retail used vehicle gross profit decreased 9.5%, with retail gross profit per used vehicle of $2,177, down $230 from last year’s all-time high. Net revenue increased 6.2% compared to approximately $7.6 billion in the same period last year.
CarMax’s net income was $185.6 million, down 11.8% from $210.4 million in the year-ago period.
CarMax’s stock is still up about 25% this year, including an increase of about 16% since former CarMax CEO Keith Barr. InterContinental Hotels Groupbegan leading the company on March 16th.
Barr said he would release details of his plan in late fall, which is expected to take several years to implement, but said his leadership is “very confident” in it.
“Our new strategy focuses on superior service, easy experiences, added value and lean operations, all of which will once again drive sustainable long-term growth and create value for our shareholders,” he said in an interview with CNBC.
CarMax and Carvana will share stock in 2026.
Barr said he spent his first three months at CarMax better learning the auto business, understanding the company’s operations and determining areas of potential growth and cost savings, all while aiming to streamline the car-buying process for customers.
“There’s definitely a huge growth opportunity here by having a truly integrated, growth-oriented strategy that leverages technology, leverages scale, leverages stores, and also delivers sustainable growth,” he said.
His first quick changes included tweaks to CarMax’s website, including displaying monthly payment amounts. Implement artificial intelligence call agent service. And we’re making the customer experience more streamlined from online to in-store.
Barr was brought in after the company’s stock price fell sharply and pressured former CEO Bill Nash to resign in November.
the stock of CarMax’s largest competitor; Carvanawhich also fell more than 7% in intraday trading on Wednesday, coincided with the online auto retailer’s announcement of plans for a new franchise. Stellantis store. Carvana’s plans include using franchise stores to service vehicles and offer test drives, but it will still sell vehicles only online, even if customers are in-store.
Barr declined to comment on Carvana’s plans, but said CarMax has found that the majority of its used-car customers still want to visit stores and see the cars they plan to buy before making a purchase.
