CarMax drops 9% after profit beat as margins shrink under new CEO
What's new: First-quarter revenue rose to $8.01 billion, but gross profit per used vehicle fell $230 from a year earlier.
CarMax shares fell 9% Wednesday after the used-car retailer topped Wall Street’s fiscal first-quarter estimates but posted weaker profitability in its core business. The company reported earnings of $1.31 a share on $8.01 billion in revenue, ahead of LSEG expectations of 95 cents and $7.42 billion. But total gross profit slipped 4.4% to $854.4 million, while gross profit per retail used vehicle dropped to $2,177 from last year’s record level. Net earnings fell 11.8% to $185.6 million. CEO Keith Barr, who took over on March 16, said a broader turnaround plan will come in late fall after early moves including website changes, an AI call agent and efforts to better connect online and in-store shopping.