03:22 PM EDT, 06/20/2025 (MT Newswires) -- CarMax ( KMX ) reported a "solid" fiscal Q1, aided by pull-forward demand ahead of anticipated tariffs, though Truist Securities cautioned that questions remain about the sustainability of growth.

The used-car retailer posted earnings of $1.38 per share for the quarter ended May 31, up from $0.97 a year earlier and above the FactSet consensus of $1.19. Revenue rose 6.1% to $7.55 billion, also topping expectations of $7.51 billion.

Used unit comps rose 8.1% in the quarter, slightly above Truist's forecast and ahead of investor expectations. However, the firm said in a note Friday that demand may have been front-loaded due to consumer concerns over tariffs.

CarMax ( KMX ) now faces more difficult year-over-year comparisons in H2 and will need to accelerate its "core run rate" to meet consensus expectations, according to the brokerage.

Higher vehicle prices may also weigh on affordability and unit growth, especially as CarMax ( KMX ) continues to hold firm on retail gross profit per unit, the firm added. The company's competitive pricing positioning may be challenged, particularly as price perception on third-party platforms continues to skew below average, according to Truist's analysis.

Tariffs present a "mixed bag" for the company. While rising new car prices could drive consumers toward used options, those prices are also expected to increase, which could limit affordability, the brokerage said.

Truist reiterated a hold rating on CarMax ( KMX ) and raised its price target to $74 from $72.

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