CarMax's stock drops 9% after it misses analyst estimates for net income and revenue

By Steve Gelsi

Car seller cites economic uncertainty as it extends its long-term sales target of 2 million units a year

CarMax Inc.'s stock fell 9% Thursday after the car retailer missed analyst estimates for fourth-quarter net income and revenue, as it bought fewer cars from customers and dealers.

Richmond, Va.-based CarMax (KMX) said it's seeing "uncertainty in the timing of market recovery" as well as "volatility" in vehicle sales, as it extended its goal to reach 2 million vehicle sales to 2030 from 2026.

CarMax's net income for the three months ended Feb. 29 fell to $50.3 million, or 32 cents a share, from $69 million, or 44 cents a share, in the year-ago quarter.

CarMax missed the FactSet consensus estimate of 46 cents a share.

Sales for the quarter dropped to $5.63 billion from $5.72 billion in the year-ago period and fell short of the analyst consensus estimate of $5.78 billion.

CarMax said it bought 234,000 vehicles from consumers and dealers, down 10.8% from the year-ago quarter.

The company also delayed its goal of selling more than 2 million combined retail and wholesale units annually. The expects to hit that goal by 2030.

Earlier, the company had targeted selling between 2 million and 2.4 million vehicles by fiscal 2026.

For its fiscal 2024 ending on Feb. 29, CarMax sold 765,572 vehicles, down 5.2% and 546,331 wholesale vehicles, down 6.6%. Combined total vehicle sales for fiscal 2024 were 1.31 million.

"We are encouraged by the performance of the business" with growth in total used unit sales, and "strong" retail and wholesale gross profit, said Chief Executive Bill Nash.

Prior to Wednesday's trades, CarMax's stock was up by 3.3% in 2024, compared to an 8.2% jump by the S&P 500. SPX

-Steve Gelsi

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04-11-24 1631ET

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