CarMax swings to 3Q loss as sales fall
Auto retailer CarMax Inc. says it swung to a $21.9 million loss in the third quarter due to slumping sales and loan loss write-downs in its auto finance arm.
The Richmond-based company says it lost 10 cents per share in the quarter that ended Nov. 30. The company reported earnings of $29.8 million, or 14 cents per share in the same quarter last year.
CarMax says it imposed a hiring freeze at the home office in Richmond and it will reduce store staffing by natural attrition.
Total sales fell 23 percent to $1.46 billion in the quarter, down from $1.89 billion a year ago. CarMax said Friday that same-store sales, or sales at stores open at least a year, tumbled 25 percent during the quarter.
The results were far short of Wall Street estimates. Analysts polled by Thomson Reuters expected earnings of 1 cent per share on revenue of $1.56 billion.
Reader Reactions
I beleive it is not just economy. Also the contributor to its problems may be its big size. Some times as a customer I felt like, right hand didn’t know what left hand was doing. I had the very bad experience with their warranty division. It took them almost one month to replace my Ford windstar transmission when it broke near Washington D.C. My van stayed with dealer in northern Virginia for almost a month (and I live in Richmond) while warranty staff was fighting with me and the dealer, because dealer was hesitant to buy and install a used transmission (my guess, may be a liability issue)and warranty agency wouldn’t pay for new transmission. Ultimately warranty agency sent a used transmission to the dealer to put in my van, which I had no choice but to accept it. Do you think anybody have this type of experience would ever buy again from this company? Now they may be wondering why the sales going down. I beleive, car buyers need more personal attention at local level compare to something bought from departmental stores. Let me add, warranty agency did a good job while replacing small parts in two different occasion. My only complain is, whatever they wanted to do, should have resolved in a short period of time, instead of taking such a long time and leaving me stranded without my van.
Advertisement