CarMax Stock Hits 52-Week Low After Q2 Earnings - Here's Why - CarMax (NYSE:KMX)

Core Insights - CarMax Inc reported weaker-than-expected second-quarter results, with earnings per share of 64 cents, missing the analyst consensus estimate of $1.09 [1] - Quarterly sales totaled $6.594 billion, down 6% year over year, and also missed the expected $7.024 billion [1] Financial Performance - CarMax Auto Finance (CAF) reported income of $102.6 million, a decline of 11.2%, due to higher loan loss provisions despite gains in net interest margins [2] - Total gross profit was $717.7 million, down 5.6% compared to the previous year's second quarter [5] - Quarterly SG&A expenses decreased by 1.6% to $601.1 million compared to the prior-year quarter [6] Sales and Unit Performance - Combined retail and wholesale used vehicle unit sales fell 4.1% to 338,031 [2] - Retail used vehicle unit sales declined 5.4% to 199,729, with comparable store used unit sales down 6.3% [3] - Wholesale vehicle unit sales slipped 2.2% to 138,302, with wholesale revenues edging down 0.4% [3] Margins and Other Metrics - Unit margins remained solid, with gross profit of $2,216 per retail used unit and $993 per wholesale unit [5] - Extended Protection Plans generated a margin of $576 per retail unit, roughly matching last year's second quarter [5] Strategic Developments - The company opened three new store locations and a stand-alone reconditioning/auction center in Virginia [5][6] - CarMax aims to achieve at least $150 million in incremental SG&A reductions over the next 18 months [6] Cash Flow and Stock Performance - CarMax exited the quarter with cash and equivalents worth $1.16 billion and generated $1.085 billion in operating cash flow for the six months ended August 31 [7] - The stock price fell 12.04% to $50.18 during premarket trading, breaching its 52-week low of $54.53 [7]