“Look how they massacred my boy.” -CarMax Investors

CarMax just got yeeted into the junkyard after dropping a Q2 earnings report that looked like it was written on the back of a repair estimate. Shares tanked more than 20% after the used car retailer missed both top and bottom lines, turning in an EPS of 99 cents vs. the $1.05 Wall Street was hoping for, and revenue of $6.6B compared to the $7.02B consensus. Say it with me now: damn that’s bad.

And just like the time I tried to watch the new Wicked movie with my wife, it somehow gets worse. This is CarMax’s lowest stock price since March 2020… right back to the “please don’t cough on me at Walmart” era. Yes, that happy little fox from the CarMax ads is now sniffing around stock levels we haven’t seen since the depths of the pandemic crash.

CEO Bill Nash (not the NBA Hall of Famer, unfortunately) called the quarter “challenging.” That’s one way to describe a three-month stretch where every single month was worse than the one before it. Total retail used vehicle unit sales were down 5.4% year-over-year. Comparable store sales dropped 6.3%. Net income fell 28% to just $95.4 million. And wholesale sales? Yeah, they were also down. The company blamed everything from consumer pullbacks to fleet depreciation and good ole fashioned economic angst (when all else fails, “blame the economy,” it works most of the time).

Now here’s where things get really sus: CarMax didn’t even issue guidance. They straight-up pulled a “no comment.” Translation: “This might get worse and we don’t want to be on record saying something dumb.” Nash did say they’re trying to claw back $150 million in SG&A costs over the next 18 months… which sounds proactive until you realize that’s about the same amount they missed on revenue this quarter alone.

(Source: Marketwatch)

Oh, and it wasn’t just CarMax that got smoked. Carvana, AutoNation, Sonic Automotive, Group 1 Automotive (heck, probably the guy selling a 2011 Jeep Liberty on Facebook Marketplace) all caught a stray from the fallout. When the biggest name in used cars belly-flops this hard, nobody gets out clean.

Still, it’s not all doom and gloom. Unless you’re long KMX. Then yeah, it’s pretty gloomy. But in the spirit of finding something (anything) to cling to: they did manage to open three new locations in Q2. So… there’s that.

And hey, at least you didn’t buy the dip back in July… right?

…RIGHT?

At the time of publishing this article, Stocks.News holds positions in Meta as mentioned in the article.