Key facts
- CarMax shares fell over 7.5% following the CEO's comments.
- CEO Keith Barr identified high costs and operational shortcomings as key issues.
- First-quarter profit decreased year-over-year to $185.6 million ($1.31 per share).
- Revenue rose 6.2% to $8.01 billion.
- Retail gross profit per used vehicle declined to $2,177 from $2,407.
CarMax shares experienced a significant decline of over 7.5% following comments from CEO Keith Barr regarding elevated costs and operational shortcomings. The used-car retailer's first-quarter financial results revealed a dip in profit, attributed to squeezed margins, despite a 6.2% increase in revenue to $8.01 billion. Barr noted that retail prices and selection need improvement while costs remain too high, and that the company's core operations were not sufficiently fast or efficient. He also highlighted the need for enhancement in the online-to-store buying experience and retail vehicle inventory. The company's retail gross profit per used vehicle decreased to $2,177 from $2,407 year-over-year, and wholesale gross profit per unit saw a slight reduction to $1,046 from $1,047. CarMax intends to continue cost-trimming measures and enhance its logistics network to improve margins.