CarMax stock suffering biggest selloff

'Affordability' challenges from higher loan rates and rising used-car 

prices led to a sharp drop in unit sales, starting in July and through 

August. CarMax Inc. investors were enduring the worst day in more 

than 20 years on Thursday, after the used-car retailer missed earnings 

expectations by a wide margin, citing "affordability" challenges 

stemming from inflation and low consumer confidence. The stock 

(KMX) tumbled 23.9% in midday trading, on track for the biggest one-day 

percentage decline since its record 28.1% plunge on Jan. 20, 2000. It 

was by far the worst performer in the S&P 500 index on Thursday, and 

was headed for the lowest close since April 2020. "Macro factors, 

including vehicle affordability that stem from persistent and broad inflation, 

climbing interest rates and low consumer confidence all led to a marketwide

decline in used auto sales," said Chief Executive Bill Nash on a post-earnings

conference call with analysts, according to a FactSet transcript. Net income

for the quarter to Aug. 31 fell to $125.9 million, or 79 cents a share, from 

$285.3 million, or $1.72 a share, in the same period a year ago. That was 

well below the FactSet consensus for earnings per share of $1.39. 

Revenue increased 2% to $8.14 billion, below the FactSet consensus of 

$8.54 billion. Meanwhile, cost of revenue increased more than revenue,

rising 3.3% to $7.41 billion to knock gross margin down to 9.05% from 10.21%.