Investing.com -- CarMax Inc. (NYSE: KMX) reported first-quarter earnings and revenue that exceeded analyst expectations, as the used-car retailer’s new four-pillar growth strategy showed early traction.

The company posted adjusted earnings per share of $1.31, beating the analyst consensus of $0.96 by $0.35. Revenue rose 6.2% to $8.0 billion, surpassing the $7.39 billion estimate and up from $7.5 billion in the prior-year quarter. Combined retail and wholesale unit sales increased 3.3% to 392,357 vehicles. Retail used unit sales increased slightly to 230,293, though comparable store used unit sales declined 0.8%. Gross profit per retail used unit fell $230 to $2,177 from last year’s record, reflecting pricing actions implemented to drive improved sales trends.

Shares rose 3.6% following the results.

"We are entering this fiscal year with a clear strategy that is driving early results," said Keith Barr, President and Chief Executive Officer. "We have identified four strategic pillars that will meaningfully improve how we operate at scale and support strong performance."

The company’s new strategy focuses on competitive pricing, seamless customer experience, maximizing transaction value, and cost reduction. CarMax reported progress on its cost-cutting initiative, with SG&A expenses declining 3.7% to $635.2 million. SG&A per total unit improved $118 to $1,619, representing a 6.8% improvement. The company remains on track to achieve targeted SG&A reductions of $200 million in exit rate savings by the end of fiscal 2027.

CarMax Auto Finance penetration expanded 150 basis points YoY to 43.3%, reflecting execution of the company’s full spectrum growth strategy. CAF income was $140.2 million, down 1.0% from the prior year, driven by a decline in auto loans outstanding following a $900 million non-prime securitization in the third quarter.

Wholesale unit sales increased 8.4% to 162,064, while gross profit per wholesale unit of $1,046 remained in line with the prior year. The company bought 322,000 vehicles from consumers and dealers, a decrease of 4.4% from last year.

Following the report, analysts at Vital Knowledge said it was "a strong showing for KMX’s new CEO," with evidence that the "turnaround initiatives are bearing fruit."