CarMax Q1 EPS Tops, Margins Drop $230 Per Vehicle, Shares Slide 6%
KMX•CarMax posted Q1 adjusted EPS of $1.31 on $8.01 billion revenue but saw gross profit per used vehicle fall $230 to $2,177 and warned margins would remain under pressure. Shares fell 6% to breach the $50 level as options traders grew bearish with a 10-day put/call ratio of 1.47.
1. Q1 Financial Results
CarMax posted adjusted Q1 earnings of $1.31 per share on revenue of $8.01 billion, exceeding analyst expectations. However, gross profit per retail used vehicle declined by $230 to $2,177, reflecting price reductions across the portfolio.
2. Margin Warning
Management cautioned that lower vehicle margins will persist as the company prioritizes sales growth over profitability through continued pricing adjustments.
3. Stock Performance
Shares fell over 6% to breach the $50 level, marking the steepest daily drop since mid-April, after the stock was rejected by its 320-day moving average.
4. Options Sentiment
Options flow turned bearish with a 10-day put/call volume ratio of 1.47 (95th percentile) and a put/call open interest ratio of 1.23 (88th percentile), while implied volatility consistently outpaced expectations with a score of 88.
