Used car retailer CarMax's first-quarter profit falls

FILE PHOTO: CarMax logo is seen in this illustration taken June 27, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) - CarMax reported an about 33% dip in its first-quarter profit on Friday, as lower margins from vehicles sold continued to impact the used-vehicle industry.

The company reported a net income of $152.4 million or 97 cents per share in the quarter ended May 31, compared with $228.3 million or 144 cents per share a year ago.

Pre-owned vehicle retailers have had a bumpy ride with profitability worsening over the last few years as new vehicle availability improved.

Better offers and trade-in deals on new vehicles have also kept potential buyers at bay from considering used vehicles.

Used vehicle dealers have been forced to sell cars at heavily discounted rates, a stark difference to the pricing power they commanded during the pandemic, when new vehicle supply was skewed.

CarMax's overall revenues during the quarter fell to $7.11 billion compared with $7.69 billion a year earlier.

(Reporting by Nathan Gomes and Abhinav Parmar in Bengaluru; Editing by Mrigank Dhaniwala)