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Shares of the company tumbled 11.5% before the bell and were on
track to open at more than two-and-a-half year low, dragging
down other auto retailers such as AutoNation Inc and Carvana Co
.
The auto retail industry has been facing the brunt of consistent
rate hikes and weakening consumer confidence. Analysts have been
warning that more pain is ahead as a period of bumper earnings
comes to an abrupt halt.
"We believe vehicle affordability challenges continued to impact
our third-quarter unit sales performance, as headwinds remain
due to widespread inflationary pressures, climbing interest
rates, and low consumer confidence," CarMax said on Thursday.
The company said it slowed car buying in the quarter, adding it
was also reducing marketing and capital expenditures to shore up
profits, which missed analysts' expectations in the third
quarter.
CarMax reported net income of 24 cents per share for the quarter
through November, compared with expectations of 70 cents, as per
Refinitiv data.
Revenue was $6.51 billion and came in below the average analyst
estimate of $7.29 billion.
(Reporting by Priyamvada C and Kannaki Deka in Bengaluru;
Editing by Maju Samuel)
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