Carmax used-car sales disappoint in third quarter

Used car retailer CarMax recorded a disappointing third quarter as vehicle sales at stores open at least a year fell despite a strong period for the overall U.S. auto business.

Discouraged investors drove CarMax (KMX) shares down 8% in pre-market trading Friday to $52.55.

The number of used vehicles sold at stores open at least a year fell 0.8% in the quarter ended Nov. 30, compared to the same period a year earlier. Overall used vehicle sales rose 3.2% because of new stores.

The company's total revenue rose 4.1% to $3.54 billion, but net earnings declined 1.4% to $128.2 million.

“We had a challenging sales quarter, which together with higher advertising expenses, contributed to the year-over-year decline in third quarter net earnings," CarMax CEO Tom Folliard said. "However, we continued to grow both total revenues and EPS, reflecting the contributions from new stores and continued share repurchase activity."

CarMax earnings per share for the quarter was 64 cents, missing analyst expectations of 68 cents, according to Zacks.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.

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