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CarMax Shares Soar on Better-Than-Expected Q1 Results Despite Margin Pressures

The retailer posted $1.38 earnings per share on $7.55 billion in revenue fueled by a 9% rise in retail used-vehicle sales.

The newly opened CarMax store at 6101 S. Desert Blvd. in West El Paso is the company's second location in El Paso. It has space for about 200 vehicles.
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Overview

  • CarMax delivered Q1 earnings of $1.38 per share, surpassing consensus estimates of $1.21 on sales of $7.55 billion versus the $7.47 billion forecast.
  • Retail used unit sales climbed 9.0% year-over-year with comparable store sales up 8.1% and wholesale unit sales rising 1.2%.
  • The company repurchased $200 million of shares in the quarter and retains $1.74 billion in remaining buyback authorization.
  • Operating margin contracted to –0.8% and net income margin stood at 1.9% as higher loan loss provisions drove a 3.6% decline in CAF income.
  • Analysts warn that tariff headwinds and CarMax’s moderate valuation could temper the sustainability of its recent growth momentum.