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CarMax Stock Sinks As Affordability Challenges Hurt Demand

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CarMax Stock Sinks As Affordability Challenges Hurt Demand

(CTN News) – CarMax (KMX) shares plunged Thursday after the company reported weaker-than-expected quarterly results due to a slowdown in demand for used cars in the United States.

It was reported that the company’s earnings per share (EPS) decreased to $0.32 in the fourth quarter of fiscal 2024 from $0.44 a year earlier, significantly lower than what analysts had expected. Despite the decline in revenue, the company managed to meet its forecasts by pulling in $5.63 billion, up 1.7%.

Despite an increase in retail vehicle units by 1.3%, revenues were down by 0.7% to $4.5 billion, which was lower than the year before.

Unit sales of wholesale vehicles dropped by 4.0%, and CarMax revenue dropped by 5.5% to $974.3 million for a total decline of 4.0%. As a result, the average retail selling price of wholesale vehicles declined by $250, while the average retail selling price of retail vehicles dropped by $600.

According to the company, sales were negatively affected by “vehicle affordability challenges.” It also stated that the company was facing “ongoing headwinds resulting from widespread inflationary pressures, higher interest rates, tightened lending standards, and low consumer confidence.”

It was announced previously that CarMax’s goal was to sell over 2 million vehicles a year by 2026, and that this would be achieved by mid-century.

However, while it was sticking to its goal, the company moved the time frame for achieving the goal out to the years 2026 to 2030 while remaining steadfast on its goal.

In this regard, CarMax explained that the reason for the decline was due to “uncertainty in the timing of the market recovery and the fact that we are continuing to focus on profitable market share growth.”.

Announcing these developments, CarMax shares were down 11.6% at $70.10 as of 12:07 p.m. Eastern Time on Thursday, marking the company’s first time in negative territory since 2024.


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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