Why CarMax stock is down 11.7% for the week

According to Standard & Poor's Global Market Intelligence( S&P Global Market Intelligence)As of Thursday's closing bell, the data provided byCarMax (New York Stock Exchange)Stock Code(KMX)'s shares fell 11.71 TP3T this week after the used-car retailer announced disappointing quarterly results and postponed a key long-term auto sales goal.

About CarMax's Disappointing Quarterly Performance

For the fourth quarter ended February 29, CarMax's revenues fell 1.71 TP3T year-over-year to $5.63 billion. Net income was $50.3 million, or $0.32 per share, down 27.31 TP3T from the year-ago quarter's EPS of $0.44. Analysts on average were looking for EPS of $0.46 on revenues of nearly $5.81 billion.

Retail used car sales were up 1.31 TP3T year-over-year, and used car comparable storefront sales were up a modest 0.11 TP3T. wholesale units were down 41 TP3T.

During the quarter, CarMax purchased 234,000 vehicles from consumers and dealers, down 10.8% from the historically strong fourth quarter of last year. 213,000 vehicles were purchased by consumers (down 14.1% from the same quarter last year), while the number of vehicles purchased by CarMax from dealers increased 44.8% from the previous year's fourth quarter to 21,000 vehicles. CarMax purchased 213,000 vehicles from consumers (down 14.11 TP3T year-over-year), while CarMax purchased 44.81 TP3T more vehicles from dealerships than in the fourth quarter of last year, reaching 21,000 vehicles.

Meanwhile, CarMax Auto Finance's (CAF) revenues increased 18.91 TP3T year-over-year to $147.3 million, thanks to the company's tightening of lending standards and lowering of loan loss reserves.

CarMax chief executive officer Bill Nash said he was "encouraged" by the company's performance at the end of the fiscal year, emphasizing the company's growth in used car sales and comparable sales side noodles.

What's next for CarMax investors?

"Our focus and progress has put us on a stronger footing than ever before and we are well prepared for the future," added Nash.

On a subsequent conference call, Nash explained that even as car prices have fallen, persistently high interest rates have put pressure on consumers to pay for other expenses such as food and housing. The fallout from that pressure on CarMax's business is clear.

As a result, CarMax has deferred to fiscal 2026 to fiscal 2030 its previously established goal of annual retail and wholesale sales of more than 2 million carriers. Previously, CarMax had hoped to achieve this goal by fiscal 2026.

That's not to say that CarMax is a failing business. But it was a progressively disappointing quarter, during which a key long-term goal was postponed. So it's not surprising that CarMax's stock price has fallen.

Should you invest $1,000 in CarMax now?

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Steve Symington does not own any of the shares listed above.The Motley Fool holds a recommendation for CarMax.The Motley Fool has a disclosure policy.

Why CarMax Stock Is Down 11.71 TP3T This Week was originally published by The Motley Fool.