CarMax (KMX) shares fell sharply lower Thursday after the vehicle-buying website posted weaker-than-expected second quarter earnings amid a slump in overall sales that suggests weakening in the used car market.
CarMax said earnings for the three months ending in August were pegged at 79 cents per share, a 54% slump from the same period last year and well shy of the Street consensus forecast of $1.39 per share. Group revenues, CarMax said, rose 1% to $8.1 billion, against missing analysts’ estimates of an $8.54 billion tally.
Retail vehicle sales were down 6.4% to 216,939 units, the company said, while used unit sales in comparable stores were down 8.3%.
“While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” said CEO Bill Nash.
“As we navigate the near-term pressures facing our industry, we are further sharpening our focus on driving additional operational efficiencies across our business,” he added. “We will also remain focused on continuing our work to achieve our long-term goals, including further improving our omnichannel experience for our customers and associates through enhancing the seamlessness of our online and in-store offerings and growing our diversified business model.”
CarMax shares were marked 10.55% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $77.30 each, a move that would extend the stock’s year-to-date decline to around 40.6%.