Retail giant CarMax Inc. for used vehicles said Thursday it sold fewer used vehicles in the second fiscal quarter as continued financial pressures on retailers in the used vehicle market continued.
CarMax reported trimmed net income of $125.9 million for the quarter ended August 31, a 56 percent year-over-year decline. The company’s net sales in the quarter were $8.1 billion, up 2 percent from the same period a year earlier.
It sold a total of 216,939 used vehicles in the quarter, down 6.4 percent from the same period a year earlier. Comparable used car sales fell by 8.3 percent. CarMax said vehicle affordability in the period resulted from increased inflationary pressures, rising interest rates and low consumer confidence, conditions that also plagued the retailer in the first quarter.
The company said it bought 342,731 vehicles from consumers and dealers, down 8.1 percent year-on-year. It said 322,543 of those vehicles were purchased from consumers, down 11.5 percent year-over-year. However, 20,188 vehicles were obtained through MaxOffer, the company’s digital dealer assessment tool. That’s an increase of 130.4 percent year-on-year and an 18 percent increase compared to the first quarter.
The company opened three new locations in Stockton, California, Wayne, NJ and East Meadow, NY in the quarter, as part of its plan to open 10 new locations in the US by fiscal year 2023.
“While this was a challenging quarter in the used auto industry, our continued progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” said CarMax CEO Bill Nash in a statement. declaration. “As we deal with the short-term pressures facing our industry, we are further sharpening our focus on driving additional operational efficiencies across our business.”
The results led to a strong sell-off of CarMax shares and weighed heavily on the shares of his peers, as well as automakers and suppliers. CarMax fell as much as 24 percent during midday trading, as did Carvana Co., while Sonic Automotive Inc. 16 percent plummeted.
CarMax closed in trading on Thursday 24.6 percent to $65.16.
Results from the company’s earnings report include:
Net profit second quarter: $125.9 million, compared to $285.3 million a year earlier.
Net sales Q2: $8.1 billion, up 2 percent from a year earlier.
Q2 used vehicles sold: 216,939, down 6.4 percent from 231,797 a year earlier.
CarMax is number 1 on car news’ list of the top 100 retailers by used vehicle sales, with retail sales of 924,338 used vehicles in 2021.
Bloomberg contributed to this report.