CarMax Inc (NYSE:KMX) fell almost 9% in pre-market trading as the vehicle retailer missed fourth-quarter expectations and cautioned on the current trading environment.
Revenue fell 1.7% to US$5.6 billion over the final quarter, CarMax reported, below Wall Street expectations of US$5.8 billion.
A 27% drop in per-share earnings to US$0.32 also sat below analysts’ estimates of US$0.49.
“We believe vehicle affordability challenges continued to impact our fourth quarter unit sales performance,” CarMax said in a statement.
Ongoing headwinds including “widespread inflationary pressures, higher interest rates, tightened lending standards and low consumer confidence,” were cited.
Used-car retailers have faced blows recently after cars bought at inflated prices due to supply shortages during the pandemic have receded in value.
Over the year, net earnings fell by 1.1% to just over US$479 million on a 10.6% fall in revenue to US$26.5 billion.
Targets to sell two million vehicles annually were pushed back to between 2026 and 2030, with CarMax previously aiming for the milestone by 2026.
“We intend to update the timeframe to achieve this goal when we have greater visibility into the industry’s pace of recovery,” CarMax added.
Shares fell 8% to US$72.9 in pre-market trading.