CarMax delays vehicle sales goal after missing Q4 results, shares tumble By Reuters

By Nathan Gomes

(Reuters) -Pre-owned autos retailer CarMax (NYSE:) missed analysts’ estimates for fourth-quarter outcomes on Thursday and mentioned it may not meet its long-term automobile gross sales goal, signaling a slower restoration within the used automobile market.

CarMax shares tumbled 8% and dragged down these of rivals Carvana and AutoNation (NYSE:) about 4% and a couple of%, respectively.

Whereas costs declined, greater rates of interest are pressuring shoppers on every little thing else they’re shopping for, comparable to meals and housing, CarMax’s CEO Invoice Nash mentioned on a post-earnings name.

The entire provide of unsold used autos on supplier tons throughout the USA rose 9%, to 2.27 million items in March from a yr in the past, in accordance with Cox Automotive.

CarMax delayed its objective to promote over 2 million mixed retail and wholesale items yearly to between 2026 and 2030, from its prior goal of 2026.

“Right this moment’s outcomes counsel that the restoration ramp is more likely to be rather a lot decrease than what some others have underwritten,” Truist Securities analyst Scot Ciccarelli mentioned.

CFRA Analysis analyst Garrett Nelson known as CarMax’s launch “disappointing”, including that “higher-for-longer” rates of interest had been more likely to proceed weighing on automobile gross sales volumes.

Used-car retailers boosted automobile inventories, anticipating sturdy demand in the course of the pandemic, amid decrease new-car provide.

Nevertheless, easing semiconductor constraints over the previous few years have led to raised provide of latest autos, in flip impacting used-car gross sales.

Final December, CarMax warned of a success to fourth-quarter profit-sharing income resulting from inflationary pressures its companions skilled.

Fourth-quarter internet revenue fell to $50.3 million, or 32 cents per share, in contrast with $69 million, or 44 cents per share a yr in the past. Analysts anticipated the corporate to publish a internet revenue of 49 cents per share, in accordance with LSEG information.

Gross sales of used autos fell marginally to about $4.49 billion, from $4.53 billion a yr in the past.

The agency’s total fourth-quarter internet income fell 1.7%, to $5.6 billion, beneath analysts’ estimate of $5.8 billion.