Used-car retailer CarMax said on Thursday that persistent affordability issues and worsening conditions in the used-car market had again hampered the number of vehicles it was able to sell in the third quarter.
CarMax’s net profit plummeted 86% to $37.6 million in the quarter ending November 30. Net revenues were down 24% to $6.5 billion.
Used vehicle sales for the quarter were 180,050 units, down approximately 21% from 227,424 units in the same period last year. Same-store used car sales were down 22%. CarMax said in its earnings call that “vehicle affordability issues will impact third quarter sales results as headwinds from broader inflationary pressures, rising interest rates and low consumer confidence continue. I keep giving,” he said.
The company said it has purchased 238,000 vehicles from consumers and dealers. This is a 40% decrease from last year’s record third quarter. This is due to the sharp market decline and the company’s choice to ‘intentionally delay purchases’. According to CarMax, 224,000 of these vehicles were purchased by consumers, down 42% year-over-year.
It says it has won 14,000 vehicles through MaxOffer, the company’s digital valuation tool for dealers. This is his 16% increase from the same period last year.
“In response to the ongoing pressures across the used car industry, we are taking prudent steps to support our business in the short and long term,” CarMax CEO Bill Nash said in a statement. taught,” he said. “We are carefully managing our business, reducing costs, unlocking operational efficiencies, profitably growing market share, and prioritizing initiatives that create a better experience for our employees and customers.”
The company said it had taken “prudent actions”, including reducing selling, general and administrative expenses, depending on conditions in the second-hand market. Increase the percentage of older retail vehicles sold. Carmax auto finance interest rate hike. Reduction in planned capital expenditures. It has “prudently managed” its capital structure, including a moratorium on share buybacks.
CarMax shares fell 8.8% to $54.21 in early trading on Thursday.