(Reuters) – CarMax reported an about 33% dip in its first-quarter profit on Friday, as lower margins from vehicles sold continued to impact the used-vehicle industry.
The company reported a net income of $152.4 million or 97 cents per share in the quarter ended May 31, compared with $228.3 million or 144 cents per share a year ago.
Pre-owned vehicle retailers have had a bumpy ride with profitability worsening over the last few years as new vehicle availability improved.
Better offers and trade-in deals on new vehicles have also kept potential buyers at bay from considering used vehicles.
Used vehicle dealers have been forced to sell cars at heavily discounted rates, a stark difference to the pricing power they commanded during the pandemic, when new vehicle supply was skewed.
CarMax’s overall revenues during the quarter fell to $7.11 billion compared with $7.69 billion a year earlier.
(Reporting by Nathan Gomes and Abhinav Parmar in Bengaluru; Editing by Mrigank Dhaniwala)
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