This year has seen the automotive industry face higher interest rates, elevated fuel prices and growing consumer caution, according to the report.
These challenges have intensified at a time when CarMax has been pursuing a turnaround plan since a February leadership change in which Keith Barr became the company’s new CEO, the report said.
So far this year, CarMax shares have risen 48%, outpacing the S&P 500’s increase of 13%, per the report.
Over the same period, the shares of AutoNation, Asbury Automotive Group, Carvana and Group 1 Automotive have declined 19%, 20%, 23% and 36%, respectively, according to the report.
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During Tuesday’s earnings call, analysts will be looking for information about how CarMax is executing on its plan and whether the current macro environment is leading buyers on a budget to buy used cars instead of new ones or not buy any big-ticket items at all, per the report.
When CarMax announced in February that it appointed Barr as CEO, the company said Barr had experience driving “transformational growth and operational excellence” across large, consumer-oriented businesses.
During CarMax’s most recent earnings call, which was held in June, Barr said the used car dealer’s net revenues increased 6.2% to $8 billion and that the firm needed to improve its digital car shopping experience to continue that trajectory.
Barr said CarMax’s digital car shopping experience was too complex, was not seamlessly connected to the firm’s in-person experience and did not make it as easy for the customer as it should.
“We know exactly what needs to change, and we’re moving forward with urgency,” Barr said during the call.
On Sept. 21, CarMax said it laid off about 4% of its corporate staff, or 145 employees, as part of “running leaner.”
“These changes will help us move faster and create better alignment across teams,” a CarMax spokesperson told Bloomberg at the time.
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