(Reuters) – CarMax Inc on Friday posted a better-than-expected adjusted profit for the first quarter, benefiting from a series of cost cutting measures that were implemented to tackle a fall in demand for used cars.
Shares of the pre-owned car retailer were up about 8% before the bell.
“Our unit performance in used, wholesale and consumer and dealer buys all improved sequentially from the year-over-year trends in the second half of fiscal year 2023,” CEO Bill Nash said in a statement.
Until now, high used-car prices due to supply shortages have led to many consumers putting off purchases, forcing retailers such as CarMax and Carvana to cut costs and offload inventory at lower prices.
Auto retailer AutoNation, in April, missed Wall Street estimates for first-quarter revenue as higher new vehicle and after-sales demand was offset by weakness in used vehicle and customer financial service businesses.
On Friday, CarMax reported an adjusted profit of $1.16 per share, compared with average analysts’ expectation of 79 cents per share, as per Refinitiv data.
Net revenue came in at $7.69 billion, compared with analysts’ estimates of $7.53 billion.
(Reporting by Kannaki Deka and Nathan Gomes in Bengaluru; Editing by Shailesh Kuber)
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