CarMax stock sinks after big profit miss, as 'affordability challenges' lead to sharp sales decline
Shares of CarMax Inc. tumbled 9.7% toward a more than two-year low in premarket trading Thursday, after the used vehicle retailer reported fiscal second-quarter profit that fell well below expectations, as "affordability challenges" led to sales falling "sharply" in the final months of the quarter. Net income for the quarter to Aug. 31 fell to $125.9 million, or 79 cents a share, from $285.3 million, or $1.72 a share, in the year-ago period. The FactSet consensus for earnings per share was $1.39. Sales increased 2.0% to $8.14 billion, below the FactSet consensus of $8.54 billion, as vehicle unit sales fell 10.3% to 376,616 but average used vehicle prices increased 9.6% to $28,657 and average wholesale vehicle prices jumped 17.0% to $10,179. Comparable-store used vehicle unit sales dropped 8.3%, compared with the FactSet consensus for a 3.6% decline. "We believe a number of macroeconomic factors impacted our second quarter unit sales performance, such as vehicle affordability challenges that stem from widespread inflationary pressures, as well as climbing interest rates and low consumer confidence," the company said in a statement. The stock has tumbled 33.6% year to date through Wednesday, while the S&P 500 has dropped 22.0%.
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