CarMax, a leading seller of used cars, revealed a sharp decline in fiscal second-quarter revenue compared to the previous year. Despite coming in slightly above estimates at $7.1 billion, the revenue was down 13.1% from the same period last year, according to FactSet.
The company’s total retail used-vehicle unit sales for the quarter fell by 7.4% compared to the year-earlier quarter, while comparable-store used-unit sales dropped by 9%. Additionally, the average retail selling price decreased by around $1,200 per unit, representing a 4% decline.
CarMax (ticker: KMX) reported earnings of 75 cents per share, down from 79 cents in the year-ago quarter.
According to CarMax’s earnings release, the second-quarter unit sales performance was adversely affected by challenges in vehicle affordability. The company attributed these challenges to prevailing inflationary pressures, higher interest rates, tightened lending standards, and persistently low consumer confidence.
In a positive move, CarMax announced its plans to resume share repurchases in the third quarter after a pause during the previous fiscal year.
As a result of these disappointing financials, shares of CarMax saw a significant decline of 11% in premarket trading, reaching a price of $70.65. However, it’s important to note that prior to this decline, the stock had experienced a considerable 30% gain throughout the year.
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