MW CarMax sees used-car prices rise for first time in more than 2 years

By Tomi Kilgore

CarMax saw the fastest growth in the number of used vehicles sold in more than three years, but the stock falls after a profit miss

Shares of CarMax Inc. were headed for a sharp pullback in early Thursday trading, after the used-car retailer reported fiscal fourth-quarter profit and sales that disappointed Wall Street.

On the bright side, CarMax said the growth in the number of vehicles sold was at the fastest pace in more than three years. The average price for a car rose, snapping an eight-quarter streak of declines.

The stock $(KMX)$ dropped 8.2% in premarket trading. That followed a 9.2% surge Wednesday amid a broad-market rally after President Donald Trump's tariff "pause" announcement.

CarMax shares had held up relatively well in the face of tariffs, on the expectation that higher prices on new vehicles, even for those assembled in the U.S., would help boost demand for used cars, which have seen prices fall for two years.

The company's latest quarterly results opened a window into what the new tariff paradigm could mean for the used-car market.

For the quarter to Feb. 28, CarMax said the average selling price for used cars was $26,133, up 0.6% from the same period a year ago.

The last quarter the company saw prices increase was the quarter that ended Nov. 30, 2022, when the average price was $28,530. Even with the latest increase, the price has declined 8.4%.

CarMax also reported used-vehicle unit sales of 182,655 for the latest quarter, which was 6.2% more than last year. That was the fastest growth since the quarter that ended in November 2021.

Meanwhile, the company disappointed with its bottom-line results.

Net income for the latest quarter rose to $89.9 million, or 58 cents a share, from $50.3 million, or 32 cents a share, a year ago.

The average analyst EPS estimate compiled by FactSet was 66 cents.

Gross profit per used vehicle edged up 3% to $2,322, beating expectations of $2,295.

Revenue grew 6.7% to $6.0 billion, to match the FactSet consensus, as used-vehicle sales increased 7.5% to $4.84 billion, just shy of expectations of $4.87 billion.

And comparable-store sales, or sales of stores open at least 14 months, rose 5.1% but missed the FactSet consensus of 6.4%.

CarMax's stock has slipped 2.1% year-to-date through Wednesday, while the S&P 500 index SPX has lost 7.2%.

-Tomi Kilgore

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April 10, 2025 08:25 ET (12:25 GMT)

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