Used vehicle retail giant CarMax Inc. said Thursday that it sold fewer used vehicles in its fiscal second quarter as ongoing economic pressures affecting retailers in the used vehicle market persisted.
CarMax reported diluted net income of $125.9 million in the quarter ended Aug. 31, down 56 percent from a year earlier. The company’s net revenue for the quarter was $8.1 billion, up 2 percent from the same period last year.
It traded a total of 216,939 used vehicles in the quarter, down 6.4 percent from the same period last year. Sales of comparable used cars fell 8.3 percent. CarMax said the affordable car challenges in the period stemmed from more inflationary pressures, rising interest rates and low consumer confidence, conditions that also hit the retailer in its first quarter.
The company said it bought 342,731 vehicles from consumers and dealers, down 8.1 percent year-over-year. It said 322,543 of those vehicles were purchased from consumers, down 11.5 percent year-on-year. However, 20,188 vehicles were acquired through MaxOffer, the company’s digital valuation tool for dealers. This is an increase of 130.4 percent compared to the previous year and an increase of 18 percent compared to the first quarter.
The company opened three new locations in Stockton, Calif., Wayne, NJ, and East Meadow, NY, in the quarter, part of its plan to open 10 new locations in the U.S. by fiscal 2023.
“While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” CarMax CEO Bill Nash said in a statement. “As we navigate the pressures facing our industry in the near term, we are further sharpening our focus on creating additional operational efficiencies across our business.”
CarMax stock fell 24 percent to $65.67 at noon trade on Thursday.
Results from the company’s earnings report include:
2nd quarter net earnings: $125.9 million compared to $285.3 million the previous year.
2nd quarter net revenue: $8.1 billion, an increase of 2 percent over the previous year.
Q2 used retail cars sold: 216,939, down 6.4 percent from 231,797 a year earlier.
CarMax ranks No. 1 on car news’ list of the top 100 dealers ranked by used vehicle sales with retail sales of 924,338 used vehicles in 2021.