CarMax (KMX) posted weaker-than-expected fourth quarter earnings Tuesday as retail used car sales declined amid surging prices, waning consumer confidence and the expirations of Covid benefits from the federal government.
Carmax said profits for the three months ending in February were pegged at 98 cents per share, down 22.8% from the same period last year and firmly south of the Street consensus forecast of $1.25 per share. Group revenues, CarMax said, surged 49.2% to $7.7 billion, topping analysts' estimates of a $7.5 billion tally, thanks in part to record price increases for retail and wholesale cars.
Wholesale sales were up 43.8% to a record 149,095 vehicles, CarMax said, with average prices rising 85.2%, or nearly $5,300 per unit, from last year. Retail used unit sales, however, fell 5.2%, with average prices rising $8,300 per unit.
"While the fourth quarter was adversely affected by macro factors, our retail market share growth for the year was the highest it’s been during my tenure as CEO and is a reflection of our ability to deliver the most customer-centric experience in the industry," said CEO Bill Nash.
“The roll out and rapid adoption of our online instant appraisal offer has solidified our position as the nation’s largest buyer of vehicles from consumers, nearly doubling our fiscal 2022 inventory self sufficiency and propelling our wholesale business to new heights," he added. "We continue to expand the availability of our end-to-end, unaided online experience, and we expect to have this capability available to 100% of customers by the end of our first quarter."
Carmax shares were marked 5.78% lower in early trading following the earnings release to change hands at $97.320 each, a move that would extend the stock's year-to-date decline to around 23.4%.
