CarMax Inc. (KMX) shares plummeted 5.03% in pre-market trading on Wednesday, following the release of its fiscal first-quarter earnings report which showed a decline in profit despite higher sales.

The used-car retailer reported a net income of $185.6 million for the quarter ended May 31, down from $210.4 million a year earlier. Earnings per share fell 5.1% to $1.31, though this topped analyst expectations. The company attributed the profit decline to price cuts implemented to stimulate sales, which led to a 4.4% drop in total gross profit to $854.4 million.

Adding to investor concerns, new CEO Keith Barr, who assumed the role in March, provided candid remarks on a call with analysts, stating that "our core operations are not yet fast and efficient enough" and that "our costs remain too high." He outlined a four-pillar turnaround strategy aimed at improving operations, pricing, digital capabilities, and cost structure, but acknowledged significant challenges that need to be addressed.