CarMax reported first-quarter net revenues of $8.01 billion, up 6.2% from a year earlier, as new CEO Keith Barr unveiled a four-pillar growth strategy for the used-vehicle retailer. Net earnings per diluted share came in at $1.31, down from $1.38 in the same period last year.
Analysts had penciled in 95 cents a share and $7.42 billion in revenue, according to CNBC.
Even so, gross profit slipped 4.4% to $854.4 million. On a per-unit basis, used vehicle retail gross profit came in at $2,177 — $230 below what CarMax has described as a record set in the year-ago period — as pricing moves aimed at lifting sales volume weighed on margins. Comparable store used unit sales fell 0.8%. Net earnings dropped 11.8% to $185.6 million.
Wholesale results were stronger. Wholesale unit sales rose 8.4% to 162,064, and wholesale gross profit climbed 8.3%. The company's CarMax Auto Finance unit posted income of $140.2 million, down 1% from the prior year, while its financing penetration rate expanded 150 basis points to 43.3% of units sold.
Selling, general, and administrative expenses fell 3.7% to $635.2 million, driven by lower compensation and benefits costs. The company said it remains on track to achieve $200 million in exit-rate SG&A savings by the end of fiscal year 2027.
Barr, who joined CarMax on March 16 after serving as CEO of InterContinental Hotels Group, outlined a strategy built around four pillars: Offering competitive pricing and greater inventory access, connecting digital and in-store experiences, growing profitability through its financing and extended protection plan businesses, and reducing costs through technology and operational efficiency. He said CarMax plans to host a detailed strategic update in late fall.
"We are entering this fiscal year with a clear strategy that is driving early results," Barr said in a statement. "Our goal is clear: deliver strong unit sales and earnings growth that enables us to consistently reward our shareholders."
During the quarter since taking charge, Barr focused on understanding CarMax's operations from the ground up; early moves out of that review included a website refresh, the rollout of an AI-powered call agent, and work to smooth the handoff between the company's digital and physical sales channels.
Wednesday's results sent CarMax shares down 9%, paring what had been a roughly 25% year-to-date advance that included gains of about 16% accumulated during Barr's tenure.
The company did not repurchase any shares during the quarter. As of May 31, 2026, $1.31 billion remained available under its buyback authorization.