CarMax Q2 net income drops, sales fall

Used-vehicle retail giant CarMax Inc. said Thursday its net income and total revenue slipped in its second fiscal quarter, though it mostly maintained its profit margin on used vehicles.

CarMax reported net income of $118.6 million in the quarter ended Aug. 31, down 5.8 percent from the same time last year. The company's net revenue in the quarter was $7.1 billion, down 13 percent year over year. Its gross profit per retail used vehicle fell 1.4 percent to $2,251.

The company retailed 200,825 used vehicles in the quarter, down 7.4 percent from the year-earlier period. Same-store used-vehicle sales fell 9 percent. Vehicle affordability challenges including "widespread inflationary pressures, higher interest rates, tightened lending standards and prolonged low consumer confidence" hampered vehicle sales in the quarter, CarMax said in its earnings release.

"We continue to drive sequential improvements in our business despite persistent widespread pressures across the used-car industry," CarMax CEO Bill Nash said in a statement. "Through deliberate steps we are taking to control what we can, we delivered strong retail and wholesale gross profit per unit, reduced SG&A, and stabilized [CarMax Auto Finance]'s net interest margin."

CarMax shares were down 13 percent to $69 at the market close on Thursday.

Results from the company's earnings report include:
Q2 net income: $118.6 million, down 5.8 percent from the year-earlier period.
Q2 net revenue: $7.1 billion, down 13 percent.
Q2 retail vehicles sold: 200,825, down 7.4 percent.