CarMax posts loss on weak used-car demand
CarMax reported a quarterly loss after being hit by a goodwill impairment charge and continued pressure from weak used-car demand and shrinking margins.
The company posted a net loss of $120.7 million, or 85 cents per share, compared with a profit of $89.9 million a year earlier. On an adjusted basis, earnings fell sharply to 34 cents per share from 64 cents last year. Revenue also slipped 1% to $5.95 billion, News.Az reports, citing Reuters.
A key drag on results was a $141.3 million non-cash goodwill impairment charge, which the company linked to a decline in its share price and weaker financial performance outlook.
Operationally, profitability per vehicle also weakened. Retail gross profit per used vehicle fell to $2,115 from $2,322 a year earlier, while wholesale profit per unit dropped to $940 from $1,045, as the company reduced prices to stimulate demand.
CarMax said the used-car market continues to face pressure from softer consumer demand and broader economic uncertainty, including cost pressures that are affecting household spending decisions.
New CEO Keith Barr said the company is moving “with urgency” to improve efficiency and rebuild sales momentum as it adapts to a more challenging market environment.
Shares of CarMax fell in premarket trading following the results, reflecting investor concerns about profitability and the pace of recovery in the used-car sector.
News.Az
By Aysel Mammadzada
