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The Stock of Carmax Fell 6.5% Following Earnings Due to Industry Pressures

September 28, 2023
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CarMax Inc. (NYSE: KMX) witnessed a decline of 6.5% in its premarket trading on Thursday, in response to the used car retailer's second-quarter earnings report, which reflected a decrease in profits compared to the prior year, amid sustained challenges within the sector.

For the quarter ending on August 31, the Richmond, Virginia-based CarMax reported a net income of $118.6 million, equivalent to 75 cents per share. This represented a decline from the $125.9 million, or 79 cents per share, recorded in the corresponding period the previous year. Concurrently, the company's sales amounted to $7.074 billion, down from the $8.145 billion reported in the prior year. The FactSet consensus had anticipated earnings per share (EPS) of 75 cents and sales totaling $7.024 billion.

Despite the persistent and widespread challenges affecting the used car industry, CarMax's CEO, Bill Nash, conveyed optimism, stating, "We continue to drive sequential improvements in our business."

Furthermore, the company's combined retail and wholesale used vehicle unit sales experienced a 9% decrease, amounting to 342,662 units. Online retail sales accounted for 14% of total retail unit sales, reflecting an increase from the 11% recorded in the same period the previous year.

Year-to-date, CarMax's stock has displayed a 31% gain, in contrast to the 11.3% increase in the S&P 500 index. (Additional details to follow)

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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