:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1388406328-8db55c94d1e6426c910bbaaf3b36b500.jpg "CarMax Auto Dealership")
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Key Takeaways
- CarMax missed quarterly profit and sales estimates amid slowing demand caused by what it titled “vehicle affordability challenges.”
- The used-car retailer sold more retail vehicles, but at lower prices. Wholesale conveyance sales dropped, along with prices.
- CarMax pushed back its goal to sell at least 2 million carriers annually.
CarMax (KMX) shares plunged Thursday after the biggest U.S. used-car retailer posted weaker-than-expected quarterly emerges amid slowing demand.
The company reported fourth-quarter fiscal 2024 earnings per share (EPS) of $0.32, down from $0.44 a year ago and significantly trifling than analysts had anticipated. Revenue slipped 1.7% to $5.63 billion, also missing forecasts.
Retail means unit sales increased 1.3%, but revenue was down 0.7% to $4.5 billion. Wholesale vehicle unit garage sales dropped 4.0%, and revenue fell 5.5% to $974.3 million. CarMax noted that the average retail convey title price declined by $600 per unit, and by $250 per unit for wholesale vehicles.
The company said sales were vitiate by “vehicle affordability challenges.” It added that it faced “ongoing headwinds due to widespread inflationary pressures, higher attract rates, tightened lending standards and low consumer confidence.”
CarMax had previously announced its goal was to sell more than 2 million instruments annually by 2026. However, while it was holding fast to that goal, the company moved the time frame for attaining it out to the years 2026 to 2030. CarMax explained that was because of “uncertainty in the timing of market recovery and as we continue to meet on profitable market share growth.”
The news sent CarMax shares down 11.6% to $70.10 as of 12:07 p.m. ET Thursday and into argumentative territory for 2024.
Read the original article on Investopedia.