CarMax Overcomes Historic Challenges to Stay Profitable in Q1
Investors were not expecting to hear much good news from CarMax's (NYSE: KMX) fiscal 2021 first-quarter earnings report. That period covers March, April, and May -- three months capturing the most intense impact to date from the COVID-19 pandemic that kept most of its automotive lots shuttered.
It wasn't a surprise, then, to see sales and profitability collapse in Q1. But the leading used car retailer revealed some encouraging metrics in this report, too. Let's take a look.
With over 80% of the selling days in the quarter impacted by social distancing mandates, CarMax's business was stressed, to say the least. Used car volumes dove 40% as customer traffic slumped and most of the company's lots either closed or switched to limited capacity. The chain also saw its wholesale business shrink by 48%. That division endured a similar traffic decline, but that factor was amplified by huge swings in the appraisal value of used cars.
Source Fool.com
