CarMax reported its first-quarter fiscal 2027 results, with total net revenues increasing by 6.2% to $8.01 billion, surpassing analyst expectations of $7.4 billion. This revenue growth was supported by an average retail selling price increase of approximately $1,200 per unit, or 4.5%, pushing the average used-vehicle price to $27,288.
Despite the revenue beat, the company's profitability declined. Gross profit per retail used unit fell by $230 to $2,177, reflecting strategic pricing actions aimed at boosting sales trends. Total gross profit was $854.4 million, a 4.4% decrease from the previous year, and net income contracted to $185.6 million, or $1.31 per share, down from $210.4 million, or $1.38 per share, in the prior year.
Retail used unit sales increased slightly to 230,293 units, while comparable store used unit sales decreased by 0.8%, outperforming the anticipated 2% decline. Combined retail and wholesale used vehicle unit sales increased by 3.3% to 392,357 units. The company also made progress on cost reductions, with SG&A expenses decreasing by 3.7% to $635.2 million, and SG&A per total unit improving by 6.8% to $1,619.
New CEO Keith Barr introduced a four-pillar strategic framework focused on delivering strong unit and earnings growth. The plan includes competitive pricing, enhancing customer interactions, expanding profitability metrics, and restructuring the company's cost base. CarMax aims for $200 million in exit rate SG&A savings by the end of fiscal year 2027.
