08:42 AM EDT, 06/21/2024 (MT Newswires) -- CarMax ( KMX ) on Friday reported better-than-expected fiscal first-quarter results, but macroeconomic challenges continued to have an impact on the used-vehicle retailer's sales.

The company posted earnings of $0.97 a share for the quarter ended May 31, down from $1.44 the year before, but higher than the Capital IQ-polled consensus of $0.95. Sales and operating revenue decreased 7.5% to $7.11 billion, but topped the Street's view for $7.09 billion.

"I am encouraged by the trends we saw in the first quarter including continued year-over-year price declines, improvements in vehicle value stability, and ongoing growth in upper funnel demand," Chief Executive Bill Nash said in a statement. "We delivered strong retail, wholesale and (extended protection plans) gross profit per unit."

Revenue from retail used-vehicle sales totaled $5.68 billion, down from $6 billion, while wholesale revenue dropped 17% to $1.26 billion. Comparable-store sales in the retail unit slipped 3.8%, more than the 3.4% decrease modeled by analysts.

Retail used unit sales slid 3.1% to 211,132 vehicles, despite lower average selling prices. Headwinds related to inflation, high interest rates and stricter lending standards continued to pose challenges to vehicle affordability, according to the company. Total wholesale vehicle unit sales fell 8.3% to 147,685.

CarMax ( KMX ) bought 314,000 vehicles in the first quarter, down 8.6% from the year before, but higher than the 234,000 cars purchased in the prior three-month period. The company obtained 279,000 vehicles from customers and 35,000 from dealers. Income in its auto financing segment rose 7% to $147 million, driven by average managed receivables and net interest margin percentage.

"As [CarMax ( KMX ) auto finance] advances to a full-spectrum credit model, we launched our first non-prime asset-backed securitization deal early in the second quarter as part of the expansion of our securitization program that will enable incremental growth in finance income," according to Nash.

Selling, general and administrative expenses widened to $638.6 million from $559.8 million year-over-year.

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