June 17 - CarMax reported first-quarter results that exceeded analysts' revenue expectations, driven by firmer used-vehicle pricing and an uptick in wholesale demand. The Richmond, Virginia-based auto retailer saw its shares climb by more than 5% in premarket trading after the figures were released.
Quarterly revenue increased 6.2% to $8.01 billion from a year earlier, topping the average analyst projection of $7.4 billion, according to data compiled by LSEG. The company posted a first-quarter profit of $185.6 million, or $1.31 per share, down from $210.4 million, or $1.38 per share, in the same quarter a year ago.
On the pricing front, average used-vehicle prices rose 4.5% year-over-year to $27,288 in the quarter. That lift in average selling prices contributed to the top-line gain even as margins showed signs of pressure.
CarMax reported its retail gross profit per used vehicle fell to $2,177 in the quarter, compared with $2,407 a year earlier. Wholesale gross profit per unit was essentially flat at $1,046, compared with $1,047 a year earlier.
The company and the broader used-car sector remain caught between two forces highlighted in the results. Affordability concerns have weighed on retail demand, pressuring margin performance at the point of sale. At the same time, the rise in new-vehicle prices attributed to higher U.S. tariffs is expected to steer some buyers toward pre-owned vehicles, supporting demand for used inventory.
Investors reacted positively to the revenue beat and the pricing environment that lifted average transaction prices, reflecting a market that is still finding balance between retail affordability pressures and wholesale demand dynamics.
Financial snapshot
- Revenue: $8.01 billion, up 6.2% year-over-year
- Average used-vehicle price: $27,288, up 4.5% year-over-year
- Retail gross profit per used vehicle: $2,177 (down from $2,407 a year earlier)
- Wholesale gross profit per unit: $1,046 (versus $1,047 a year earlier)
- Net income: $185.6 million, or $1.31 per share (versus $210.4 million, or $1.38 per share, a year earlier)
Market context
The results underscore a dynamic where higher average prices for used vehicles are supporting revenue even as retail profitability per unit has declined. Wholesale gross profit remained effectively flat year-over-year, indicating limited improvement in that channel's per-unit margin during the quarter.
CarMax's performance illustrates how shifts in pricing and supply-demand balances across retail and wholesale channels are playing out for large used-car retailers. The company's top-line outperformance versus LSEG consensus highlights the extent to which price moves can influence revenue even when per-unit retail profit compresses.