An 11% drop in gasoline prices and a 0.4 % drop in used vehicle prices in July could drive the sales of used cars. Moreover, since gas prices still remain elevated and the cost of electric vehicles has increased significantly year-over-year, demand for used electric cars is soaring, with consumers looking for saving opportunities amid concerns over a potential recession.
Popular used vehicles retailer CarMax (KMX) doesn’t look well-positioned to capitalize on the industry tailwinds given its weak financials. While KMX’s net revenues increased year-over-year in its fiscal first quarter of 2023 (ended May 31, 2022), its gross profit, net earnings, and earnings per share have all declined from the year-ago levels.
