Dec 22 (Reuters) – CarMax (KMX.N) reported an 86% quarterly profit drop on Thursday, with the largest U.S. used-car retailer warned as rising interest rates hurt consumer confidence. announced that it would cut costs and suspend share buybacks.
The company’s share price fell 11.5% ahead of Bell, and is on track to open trading at its lowest level in more than two-and-a-half years, ahead of others such as AutoNation Inc (AN.N) and Carvana Co (CVNA.N). Car retailers pulled down. ).
The auto retail industry has been bearing the brunt of consistent rate hikes and declining consumer confidence. Analysts warn more pain lies ahead if the surge in revenues suddenly stops.
Carmack said Thursday that “vehicle affordability issues will continue to impact third quarter sales as headwinds from broader inflationary pressures, rising interest rates and low consumer confidence continue. I believe that
The company said it slowed down its third-quarter vehicle purchases and cut marketing and capital expenditures to bolster profits, which fell short of analysts’ expectations for the third quarter.
CarMax reported net earnings per share of 24 cents for the quarter through November, compared to expectations of 70 cents, according to Refinitiv data.
Revenue of $6.51 billion was below the average analyst estimate of $7.29 billion.
Reported by Priyamvada C and Kannaki Deka, Bengaluru.Edited by Maju Samuel
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