CarMax's stock jumps after profit beat expectations, while sales fell short

Shares of CarMax Inc. (KMX) rallied 5.2% toward a three-month high in premarket trading Thursday, after the used car seller reported fiscal third-quarter profit that beat expectations, overshadowing a sales miss as vehicles sold and average prices fell. Net income for the quarter to Nov. 30 jumped to $82.0 million, or 52 cents a share, from $37.6 million, or 24 cents a share, in the year-ago period. That beat the FactSet consensus for earnings per share of 42 cents. Sales fell 5.5% to $6.15 billion, below the FactSet consensus of $6.29 billion, as same-store sales declined 4.1% to miss expectations of a 0.4% increase. Unit sales of used vehicles were down 2.9% to 174,766 vehicles, while average selling prices dropped 4.6% to $27,228. "We believe vehicle affordability challenges continued to impact our third quarter unit sales performance, with ongoing headwinds due to widespread inflationary pressures, higher interest rates, tightened lending standards and low consumer confidence," the company said in a statement. The stock has rallied 22.7% year to date through Wednesday, while the S&P 500 has advanced 22.4%.

-Tomi Kilgore

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12-21-23 0659ET

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