CarMax Missed Sales Targets, Says Earnings Report

The CarMax (KMX) stock took a dive today after its earnings report was released, down 11.2% to $70.42 a share.

Analysts expect CarMax to continue to fall over the next few days as the company adjusts its earnings expectations for the next quarter and the rest of the year.

The used car sales company  reported that it missed its earnings targets for the fiscal 4^th quarter and that it would have to set back the deadline for when it expected to sell two million cars in a year.

For the 4^th quarter, CarMax reported $5.62 billion in revenue and a gain of 32 cents per share. These numbers are below expectations, which had placed revenue at $5.78 billion and had expected the share price to increase by 46 cents a share.

Over the last month, CarMax stock has fluctuated between $79 and $87 a share. Today marks the lowest the stock has gone since January.

Why Did CarMax Miss Targets?

Where does the retailer place the blame for the lower than expected quarterly revenue? A press release from the company says that the problem is vehicle affordability. They also said that inflation is causing undue pressure and making for a difficult environment in which to sell durable goods. Lending standards are tight, and consumer confidence has dropped, says the report, and the data for 2024 backs up these claims.

The company had previously claimed it would be selling two million units each year by 2026. Now, they have dialed back that prediction and claim that they will be hitting that sales milestone somewhere between 2026 and 2030. The company is working hard to increase their market share and to make sure that the next earnings report paints a positive picture for them.

The stock price drop for Thursday is a massive one, and it is the largest single-day drop CarMax has experienced since back in fall of 2023.