CarMax (KMX) reported declining earnings and revenue for its fiscal second quarter early Thursday as demand for used cars slowed. CarMax stock tumbled.

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CarMax Earnings

Estimates: Analysts expected CarMax earnings to slide 5% to 75 cents a share, according to FactSet, though some forecasts called for 78 cents. Revenue was seen falling 14% year over year, to $7.024 billion.

Results: CarMax earnings per share fell 5% to 75 cents, in line with views. Revenue slid 13% to $7.07 billion, slightly above estimates. This marks the seventh straight quarter of earnings declines, as well as the fourth consecutive quarter of falling revenue.

Retail used unit sales fell 7.4% while comparable store used unit sales declined 9%. The average retail selling price for used cars was $27,500, down 4%.

In CarMax’s auto finance division, earnings also fell. But online sales and revenue rose. SG&A expenses decreased 12.1%, which the company tied to ongoing cost and efficiency efforts.

For Q2, CarMax reported retail gross profit per used car at $2,251, in line with the year-ago quarter.

“We continue to drive sequential improvements in our business despite persistent widespread pressures across the used car industry,” CEO Bill Nash said in an earnings release.

The release tied Q2 results to “affordability challenges,” which weighed on demand for used cars. Management tied the issue of unaffordable vehicles to “widespread inflationary pressures, higher interest rates, tightened lending standards, and prolonged low consumer confidence.”

CarMax said it will resume stock buybacks in the current third quarter after halting them a year earlier.

CarMax Stock

Shares of the No. 1 used car retailer fell more than 10% in Thursday’s stock market action, undercutting the 200-day moving average and recent lows.

CarMax stock is forming a flat base with an 87.50 buy point, according to MarketSmith chart analysis. The base has formed around the 50-day moving average. KMX stock hit a three-month low in early June.

Online-only rival Carvana (CVNA) dropped 3.6% Thursday. CVNA stock had popped 3.3% on Wednesday, snapping seven straight days of declines. Carvana stock briefly broke out earlier in September.

Used Cars Out of Reach For Many

Used-car retailers face challenging industry and macroeconomic conditions.

Steep interest rates have made vehicles unaffordable for many consumers. Retailers have also struggled to unload used cars, forcing them to lower prices below the cost of purchase, which hit profits.

Now, the longer the autoworkers’ strike drags on, the greater the risk to already sky-high prices for new and used vehicles, analysts say.

“With potential new car production slowing, used car values have nowhere to go but up,” Ivan Drury, Edmunds’ director of insights, told CNBC.

Still, CarMax continues to see business trends improve on the back of cost cuts. The company says it is the nation’s largest retailer of used cars.

After Thursday’s dive, CarMax stock is now up 18% year to date.

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