CarMax Stock Crashes Into Earnings: Why KMX Shares Are Diving Today

CarMax Inc KMX shares are trading lower Thursday after the company reported weak second-quarter financial results.

CarMax said second-quarter revenue increased 2% year-over-year to $8.1 billion, which missed average analyst estimates of $8.57 billion, according to Benzinga Pro. The company reported quarterly earnings of 79 cents per share, which is down from $1.72 per share year-over-year and well below average estimates of $1.39 per share. 

Total retail used units sold decreased 6.4%. Used unit sales in comparable stores were down 8.3%. Comparable store sales saw a low single-digit decline in June and then fell sharply through the end of the quarter. 

CarMax said the sharp declines were due to vehicle affordability challenges that stem from widespread inflationary pressures, as well as climbing interest rates and low consumer confidence. 

"While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share," said Bill Nash, president and CEO of CarMax.

CarMax opened three new retail locations during the second quarter. The company said it plans to open a total of 10 new locations in fiscal 2023.

"As we navigate the near-term pressures facing our industry, we are further sharpening our focus on driving additional operational efficiencies across our business," Nash added.

See Also: A Key Inflation Pressure Is Easing: Used Car Prices From These Firms Are The First To Crack

KMX Price Action: CarMax is making new 52-week lows on Thursday.  The stock was down 22.4% at $67.23 at time of publication.

Photo: vip869910 from Pixabay.