CarMax announced on February 12 that Keith Barr, the former chief executive of InterContinental Hotels Group, will become the company’s President and Chief Executive Officer effective March 16. Interim CEO David McCreight will return to his role as an independent director on the board.
Barr’s tenure at IHG, from July 2017 to July 2023, was marked by a focus on digital transformation and a consumer‑centric approach. CarMax is currently executing a turnaround plan that emphasizes cost discipline, pricing adjustments, and a stronger omnichannel customer experience, and Barr’s background is seen as a fit for these priorities.
In its most recent quarterly report, CarMax reported net sales of $5.8 billion, a 6.9% decline from the prior year, and net earnings of $62.2 million, a 50.4% drop. Earnings per diluted share were $0.43, beating the consensus estimate of $0.32. The beat was largely driven by disciplined cost management and a focus on higher‑margin retail used‑vehicle sales, which helped offset the sales decline.
CarMax’s turnaround strategy includes a $150 million reduction in SG&A expenses and a pricing strategy aimed at making average selling prices more attractive to consumers. Interim CEO David McCreight noted that the company’s average selling prices have drifted upward and are less attractive, and that the firm will work to shrink the gap between its offering and the marketplace.
Investors reacted negatively to the announcement, citing skepticism about appointing an outsider from the hospitality industry and concerns about the company’s ongoing business challenges. The market’s reaction reflects uncertainty about CarMax’s ability to reverse the downturn and compete with online retailers.
Tom Folliard, interim executive chair of the board, praised Barr’s decades of leadership experience and his proven ability to enhance the customer experience, lead digital transformations, build brand loyalty, and integrate online and physical properties. William Nash, former CEO, highlighted the company’s focus on driving sales, gaining market share, and delivering significant year‑over‑year earnings growth for years to come.
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