On the Dash:
- CarMax shares fell 20% to $45.60, their lowest close since March 2020, after missing Wall Street’s earnings and revenue expectations.
- Quarterly revenue dropped 6% to $6.6 billion and net income fell 28% to $95.4 million, with vehicle sales down 4.1%.
- CEO Bill Nash cited challenging market conditions and inventory depreciation, while rival auto retailers also saw stock declines following the report.
Shares of CarMax plunged 20% in trading Thursday after the used auto retailer reported weaker-than-expected quarterly results, driving the stock to its lowest close in more than five years. CarMax shares ended the day at $45.60, their lowest level since March 2020 when the pandemic shut down U.S. auto production and dealerships.
The Richmond, Virginia-based company has lost approximately 44% of its value so far this year, resulting in a market capitalization of $6.84 billion.
CarMax reported quarterly revenue of $6.6 billion, down 6% from a year earlier, with adjusted earnings per share of 99 cents. Both measures missed Wall Street estimates, which had projected earnings of $1.05 a share and $7.01 billion in revenue, according to data provider LSEG. Vehicle sales fell 4.1% from last year, while net income dropped nearly 28% to $95.4 million.
CEO Bill Nash described the company’s fiscal second quarter, which ended Aug. 31, as “challenging.” He pointed to shifting market conditions, a sales pull-ahead earlier this year due to tariff concerns, and inventory depreciation as factors weighing on results. Still, he noted that CarMax entered the current quarter with improved inventory and pricing.
The disappointing results rippled across the auto retail sector. Shares of Group 1 Automotive, AutoNation, Sonic Automotive, and Lithia Motors all fell Thursday, losing between 2% and 6%. Investors and analysts often track CarMax’s performance as an early indicator ahead of other companies’ quarterly earnings.
CarMax shares had not traded this low since the early days of the COVID-19 pandemic, underscoring the mounting pressures facing the used car market despite elevated consumer demand in recent years.
