By Connor Hart

CarMax's turnaround is starting to take shape, but the used-car retailer still has a lot of work to do to reach its full potential.

Chief Executive Keith Barr, who stepped into the top role in March, said on a call with analysts Wednesday that the company's core operations aren't fast and efficient enough, and that its costs remain too high.

At the same time, he said CarMax's digital experience is too complex and unconnected to the company's in-person experience, which itself has problems. The good news, though, is that all of these pain points are addressable.

"We know exactly what needs to change, and we are moving forward with urgency," Barr said.

CarMax will work to implement its turnaround strategies over the coming months, such as ensuring its cars remain priced competitively, working to improve digital capabilities and in-store experiences, growing profitability and cutting costs.

The company's turnaround plans came as it sold more vehicles during the recent quarter. The increase was largely driven by lower prices, though, which pressured margins and resulted in lower profit.

Investors seemed unsure of whether to rally behind or be weary of CarMax's turnaround. Shares seesawed in premarket trading and were recently trading 6.3% lower, at $48.85.

The stock has lost nearly a quarter of its value over the past year, as CarMax has faced stagnant sales and rising competition. The company has been under pressure to improve results, having previously added two members to its board in April following talks with activist investor Starboard Value.

For its three months ended May 31, the company posted a profit of $185.6 million, down from a profit of $210.4 million a year earlier. Quarterly earnings of $1.31 a share topped the 91 cents a share that analysts polled by FactSet had expected.

Net sales and operating revenues climbed 6.2% to $8.01 billion, ahead of Wall Street models for $7.42 billion.

Combined retail and wholesale unit sales came in at 392,357, up 3.3% from a year ago, as sales of used retail units increased slightly, the company said. Comparable sales slipped 0.8%, not as steep as the 2% decline that analysts had forecast.

CarMax said last quarter it would pause its share buybacks to preserve cash for its turnaround plan.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

June 17, 2026 10:02 ET (14:02 GMT)

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