Why Did CarMax Stock Tumble 24% Today?
Synopsis
Total vehicle sales of the company fell 4.1% year-over-year in the second quarter to 338,031 units, dragging revenue by 6% to $6.59 billion.
Shares of CarMax (KMX) slumped 24% on Thursday morning after the company’s second-quarter earnings fell below Wall Street expectations, sparking a downgrade by Wedbush.
Total vehicle sales for the company declined 4.1% year-over-year in the quarter to 338,031 units, resulting in a 6% decrease in revenue to $6.59 billion, which fell short of the estimated $7.02 billion. Net earnings per share came in at $0.64, down from $0.85 in the corresponding quarter of 2024.
CEO Bill Nash admitted that the quarter was “challenging,” but said the company remains confident in its long-term strategy. Wedbush subsequently downgraded CarMax to ‘Neutral’ from ‘Outperform’ and revised the price target to $54, down from $84.
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