A view of a CarMax dealership on April 10, 2025, in Santa Rosa, California.
Justin Sullivan | Getty Images
Shares of CarMax fell 9% on Wednesday after the company beat Wall Street expectations for quarterly earnings and its new CEO detailed a high-level strategy to turn the company around.
Here’s how the company performed in its first fiscal quarter, compared to average ratings compiled by LSEG:
- Earnings per share: $1.31 vs. 95 cents expected
- Net worth: $8.01 billion compared to $7.42 billion expected
Despite the hit, questions remain about the company’s ability to grow and cut costs under the plan as it faces tough market conditions. The used car dealer reported margin pressure and a decline in gross profit per used car.
CarMax’s net profit was $854.4 million, down 4.4% compared to last year’s first fiscal quarter. Used car gross profit fell 9.5% and retail gross profit per used unit was $2,177, down $230 from last year’s record, the company said. Its net profit was up 6.2% compared to nearly $7.6 billion a year ago.
CarMax reported net income of $185.6 million, down 11.8% from $210.4 million in the same period last year.
Shares of CarMax are still up about 25% this year, including a rise of about 16% since Keith Barr, the former CEO of InterContinental Hotels Grouphe started leading the company on March 16.
Barr said he would release more details of his plan – which is expected to take several years to implement – in late fall, but noted that leadership is “highly optimistic about it.”
“Our new strategy is focused on offering the best, the simplest experience, adding value, operating less, all of which, in turn, will promote long-term sustainable growth, which will create value for our shareholders,” he told CNBC during an interview.
CarMax and Carvana partners in 2026.
Barr said he spent his first three months at CarMax learning the car business better, understanding the company’s operations and determining areas of potential growth and cost reductions, while aiming to streamline the car buying process for customers.
“There’s certainly a significant growth opportunity here by having a really integrated, growth-oriented strategy that leverages technology, leverages our scale, leverages our stores, that will provide continued growth,” he said.
His first immediate changes included making changes to the CarMax website, such as showing monthly payments; using a call intelligence agent service; and trying to improve the customer experience from online to store.
Barr was brought in following a sharp drop in the stock that led to pressure for former CEO Bill Nash to step down in November.
Shares of major competitor CarMax, Carvanaand fell more than 7% during midday trading on Wednesday, which coincided with the online car retailer unveiling plans for its new franchise. Stellantis shops. Carvana’s plan includes using franchise stores to service cars and offer test drives, but it will still only sell its cars online, even to in-store customers.
Barr declined to comment on Carvana’s plans, but said CarMax has found that most of its used car customers still like to visit dealerships and see the car they plan to buy before doing so.
