CarMax reported its fiscal first-quarter earnings, indicating profit was negatively impacted by price reductions implemented to stimulate sales. Despite this, the company's total revenue increased by 6.1% year over year, reaching $8.01 billion, which surpassed consensus estimates by $580 million. GAAP EPS also exceeded expectations by $0.37. This marks the first earnings report under new CEO Keith Barr.
Key trends in CarMax's vehicle sales showed flat retail unit sales, while wholesale sales grew by 8.4%. Comparable store retail unit sales experienced a slight decline. The company highlighted its strong digital and omni-channel presence, with 84% of retail sales involving digital capabilities; 70% were omni-channel, and 14% were purely online sales.
This Q1 performance follows a strategic shift to reduce prices and increase marketing spend, which had previously led to a net loss of $120.7 million in the fourth fiscal quarter, contrasting with a profit of $89.9 million in the prior year's same quarter. The average selling price for CarMax in Q4 FY2026 was $26,019, down 0.4% year-over-year. Average used-vehicle gross profit per retail unit in Q4 was $2,115, a decrease of $207 per unit, or about 9%, from a year ago, reflecting the price cuts. Analysts view these results as CarMax being in the early stages of its turnaround strategy, with continued pressure on profitability as the company prioritizes sales volume over gross profit per unit.
