CarMax (KMX.US) stock plunged over nearly 25.0% after the auto retailer posted disappointing quarterly figures as “affordability challenges” had a negative impact on sales.
Company earned 79 cents per share in the second quarter, which represents a 54% decline compared to the same period last year and well below market expectations of $1.39 per share. Revenue increased 1% to $8.1 billion, also missing analysts' projections of $8.54 billion.
Retail vehicle sales fell 6.4% to 216,939 units, while used unit sales in comparable stores were down 8.3%.
CarMax plans to open 10 new stores in its 2023 fiscal year.
“As we navigate the near-term pressures facing our industry, we are further sharpening our focus on driving additional operational efficiencies across our business. We will also remain focused on continuing our work to achieve our long-term goals, including further improving our omnichannel experience for our customers and associates through enhancing the seamlessness of our online and in-store offerings and growing our diversified business model,” CarMax said in a statement.
Auto research firm Cox Automotive, which monitors U.S. vehicle market trends, yesterday lowered its outlook for new and used vehicle sales due to deteriorating sentiment among potential buyers, while Moody's downgraded the global Automotive industry to "negative" from "stable" earlier in the day, therefore CarMax investors should be ready for more pain to come.
CarMax (KMX.US) shares tumbled 25% to $66.24 to hit a more than two-year low and are heading towards key support at $63.20, which coincides with 78.6% Fibonacci retracement of the upward wav launched in March 2020. Should break lower occur, downward move may deepen towards pandemic lows around $37.90. Source: xStation5
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