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Key Takeaways
- CarMax missed quarterly profit and sales estimates amid slowing demand caused by what it called “vehicle affordability challenges.”
- The used-car retailer sold more retail vehicles, but at lower prices. Wholesale vehicle sales dropped, along with prices.
- CarMax pushed back its goal to sell at least 2 million vehicles annually.
CarMax (KMX) shares plunged Thursday after the biggest U.S. used-car retailer posted weaker-than-expected quarterly results 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 less than analysts had anticipated. Revenue slipped 1.7% to $5.63 billion, also missing forecasts.
Retail vehicle unit sales increased 1.3%, but revenue was down 0.7% to $4.5 billion. Wholesale vehicle unit sales dropped 4.0%, and revenue fell 5.5% to $974.3 million. CarMax noted that the average retail selling price declined by $600 per unit, and by $250 per unit for wholesale vehicles.
The company said sales were hurt by “vehicle affordability challenges.” It added that it faced “ongoing headwinds due to widespread inflationary pressures, higher interest rates, tightened lending standards and low consumer confidence.”
CarMax had previously announced its goal was to sell more than 2 million vehicles annually by 2026. However, while it was holding fast to that goal, the company moved the time frame for achieving 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 focus 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 negative territory for 2024.