CarMax reports steep second-quarter earnings decline, missing Wall Street expectations

CarMax (KMX) announced Thursday that it suffered massive losses in the second quarter and failed to meet Wall Street’s expectations.

The Richmond, Virginia-based used-car dealership has been hit by high inflation and rising interest rates, which have hurt its competitors and markets across industries.

“Consumer confidence, certainly during the quarter, [was at an] All-time low in recent history… even lower than the peak of the pandemic. So I think consumers are prioritizing their spending a little differently,” Chief Executive Bill Nash told analysts on a conference call.

The company reported gross profit of $737 million, down 9.6% year over year. CarMax said its retail sales fell 6.4% in the most recent quarter, while unit sales were down 15%. The company also said its wholesale vehicle margin fell 26% year over year.

Nash said CarMax was still able to increase its market share. “We remain on track to achieve our long-term strategy and goals,” he said.

With consumer demand shrinking, the company says it has prioritized smaller, more budget-friendly vehicles to serve the market.

CarMax shares fell Thursday, closing at $65.16, down $21.26, or 24.6%. It was the largest one-day drop in 22 years.

Shares in auto dealer Carvana and automakers Ford and General Motors also posted sharp falls.

https://www.ibtimes.com.au/carmax-reports-steep-drop-q2-profits-misses-wall-street-expectations-1838961?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution CarMax reports steep second-quarter earnings decline, missing Wall Street expectations

Fry Electronics Team

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