CarMax stock plummets after missed Wall Street’s expectations

DETROIT — Shares of CarMax were down by more than 20% in early trading Thursday after the used auto retailer missed Wall Street’s quarterly earnings and revenue expectations.

CarMax shares were trading early Thursday under $45 — the stock’s lowest price since March 2020, when the coronavirus pandemic closed down U.S. auto production and many retailers. The stock is down around 46% this year, with a less than $6.7 billion market cap. 

The company’s results included earnings per share of 99 cents and revenue of roughly $6.6 billion, down 6% from a year earlier. Analysts surveyed by LSEG had expected earnings per share of $1.05 and revenue of $7.01 billion.

CarMax CEO Bill Nash described the company’s second fiscal quarter that ended Aug. 31 as “challenging” in the company’s quarterly release.

Other key results, such as sales and net income, were also down compared with a year earlier. The company’s overall vehicle sales fell 4.1% compared with the same period a year earlier, assisting in a roughly 28% decline in net income to $95.4 million.

Shares of other car retailers were also down after CarMax’s results, as many investors and Wall Street analysts watch the company’s performance as an early barometer ahead of other quarterly reporting.

Shares of Group 1 Automotive, Penske Automotive Group, Sonic Automotive and Lithia Motors were all down roughly 2% or less. AutoNation’s stock was off roughly 4%, as was Carvana‘s stock.