Core Insights - CarMax reported disappointing earnings, with revenue and vehicle sales falling short of analyst expectations, leading to a nearly 20% drop in stock price, reaching levels not seen since March 2020 [1] - The CEO indicated that performance worsened month by month during the quarter, highlighting a significant increase in loan loss provisions by 26% compared to the same quarter last year, indicating deteriorating loan quality [1][1] - The auto delinquency rate in the industry is currently at 2.54%, raising concerns about consumer strength and potential future delinquency rates reminiscent of the 2008-2009 financial crisis [1][1] Company Performance - CarMax's vehicle sales, both retail and wholesale, declined, contributing to the overall poor performance in key metrics [1] - The increase in loan loss provisions suggests a growing concern regarding delinquencies and defaults, particularly for loans issued in 2022 and 2023 [1][1] Industry Context - Despite CarMax's struggles, auto suppliers have performed well since early April, particularly after tariff announcements, as they have successfully passed on costs to automakers [1] - Stocks of auto suppliers such as Viston, Magna, BorgWarner, and Lear have outperformed major indices like the Dow Jones Industrial Average and S&P 500 over the past six months [1][1]