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“We believe vehicle affordability challenges continued to impact our third quarter unit sales performance, with ongoing headwinds due to widespread inflationary pressures, higher interest rates, tightened lending standards and low consumer confidence,” CarMax (NYSE:KMX) said.
The company last year paused some hiring and reduced its selling general and administrative expenses as it looked to offset waning demand for used vehicles.
However, the company said on Thursday it resumed its share repurchase program during the quarter after pausing it last year.
Demand for used vehicles had risen in the pandemic but fell significantly over the past few quarters after consumers were faced with higher interest rates.
Additionally, higher inventory levels of used vehicles had led to retailers selling vehicles for heavy discounts, in some cases even lower than the prices they were acquired at.
The company posted a quarterly profit of $82 million, or 52 cents per share, for the quarter ended Nov. 30, compared with $37.6 million, or 24 cents per share, a year ago.
Analysts on average had expected a profit of 43 cents per share, according to LSEG data.
However, revenue fell 5.5% to $6.15 billion, below estimates of $6.29 billion.
