Shares of
CarMax
were tumbling Thursday after the user-car seller reported fiscal second-quarter revenue that declined sharply from a year earlier.
Revenue was $7.1 billion, down 13% from a year earlier, and slightly above the consensus call of $7.02 billion among analysts tracked by FactSet. Total retail used-vehicle unit sales fell 7.4% from the year-earlier quarter, while comparable-store used-unit sales fell 9%.
The average retail selling price also fell by about $1,200 per vehicle, or 4%, which aligns with comments made by CEO William Nash. He said on a call to discuss the results with investors that some buyers who would prefer to delay buying cars but have to make a purchase to replace a failing vehicle appear to be choosing less expensive models.
CarMax (ticker: KMX) posted earnings of 75 cents a share, down from 79 cents in the year-ago quarter.
“We believe vehicle affordability challenges continued to impact our second quarter unit sales performance, as headwinds remained due to widespread inflationary pressures, higher interest rates, tightened lending standards and prolonged low consumer confidence,” Carmax said in the earnings release.
The company said it intends to resume share repurchases in the third quarter after pausing them in the third quarter of the previous fiscal year.
Shares of CarMax were down 8.9% to $72.62, putting it on pace for its largest percent decrease since Sept. 29, 2022, when it dropped 25%, according to Dow Jones Market Data. It was also the worst performer in the
S&P 500.
This year, the stock has gained 19%.
Write to Emily Dattilo at [email protected]
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