(Reuters) – Pre-owned car retailer CarMax Inc on Tuesday posted fourth-quarter profit above analysts’ estimates, helped by cost cuts implemented in the quarter that offset a hit from cooling demand.
Shares of the company were up by 6.65% at $70.24 in premarket trade.
CarMax had in December implemented a series of measures to help cut costs, such as slowing down on acquiring cars for its inventory, trimming marketing and capital expenses, and lowering staffing “from an attrition basis” and pausing hiring for its corporate office.
“Our deliberate steps to navigate the pressures facing the used car industry are driving sequential improvements in our business,” CEO William Nash said on Tuesday.
Demand for used cars was dented over the past year due to higher borrowing costs and soaring commodity and gasoline prices.
CarMax’s adjusted fourth-quarter profit came in at 44 cents per share, ahead of Refinitiv IBES estimates of 24 cents per share.
Its quarterly revenue came in at $5.72 billion, down 25.6% from a year earlier.
(Reporting by Nathan Gomes in Bengaluru; Editing by Pooja Desai)
