Used car prices jump 40%: CarMax
CarMax sold 194,318 used vehicles during 4th quarter, down 5.2% from 204,928 a year ago
Inflation at 40-year high for fifth consecutive month
FOX Business' Cheryl Casone reports on the latest inflation data, which showed another jaw-dropping figure as the war between Russia and Ukraine sent oil and gas prices spiraling higher in March.
Inflation may have consumers re-thinking whether they need that used car.
CarMax experienced a slowdown in fourth-quarter used car sales volume as its average retail selling price jumped 39.7% year-over-year to $29,312, an increase of approximately $8,300 per unit.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KMX | CARMAX INC. | 74.24 | +0.72 | +0.99% |
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CarMax sold a total of 194,318 used vehicle units during the fourth quarter, down 5.2% from 204,928 used vehicle units a year ago. Comparable store sales for its used vehicles fell 6.5% year-over-year. Meanwhile, the company sold 149,095 wholesale vehicle units, up 43.8% from 103,676 wholesale vehicle units a year ago. The average wholesale selling price surged 85.2% year-over-year to $11,495, an increase of nearly $5,300 per unit.
"We believe a number of macro factors weighed on our fourth quarter unit sales performance, including declining consumer confidence, the omicron-fueled surge in COVID cases, vehicle affordability, and the lapping of stimulus benefits paid in the prior year period," CarMax said in its earnings release Tuesday.
CarMax sold a total of 194,318 used cars during the quarter, down 5.2% from 204,928 a year ago, while comparable store sales for its used cars fell 6.5% year-over-year. (Reuters/Mario Anzuoni )
Overall, CarMax's net earnings for the fourth quarter fell 22.8% year-over-year to $159.8 million, or 98 cents per share, while net revenue for the quarter rose 48.8% year-over-year to $7.7 billion.
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Looking ahead, CarMax has revised its five-year financial targets for vehicle sales and revenue introduced in May 2021. The company now anticipates selling between 2 million and 2.4 million vehicles through its combined retail and wholesale channels and generating between $33 billion and $45 billion in revenue by fiscal 2026.
The latest quarterly figures from CarMax come as inflation rose 8.5% year-over-year in March, the fastest pace since December 1981, when inflation hit 8.9%. Used car and truck prices, which have been a major component of the inflation increase, are still up 35.3% from the previous year, but actually declined by 1.8% in the one-month period between February and March.
Fox Business' Megan Henney contributed to this report