Shares of CarMax Inc. KMX rallied 4.0% in premarket trading Tuesday, after the used car seller reported fiscal fourth-quarter profit that was more than double what was expected even as revenue that fell well short of expectations citing “vehicle affordability challenges.” Net income for the quarter to Feb. 28 fell to $69.0 million, or 44 cents a share, from $159.8 million, or 98 cents a share, in the year-ago period. That beat the FactSet consensus of 20 cents. Revenue declined 25.6% to $5.72 billion, which missed the FactSet consensus of $6.11 billion, as used vehicle sales fell 21.1% to $4.53 billion and wholesale vehicle sales dropped 41.6% to $1.03 billion. Same-store sales were down 14.1%, compared with expectations of an 11.9% decline. Retail gross profit per used vehicle rose $82, or 3.7%, to $2,277. “We believe vehicle affordability challenges continued to impact our fourth quarter unit sales performance, as headwinds remained due to widespread inflationary pressures, climbing interest rates, tightening lending standards and prolonged low consumer confidence,” the company said. CarMax’s stock has rallied 8.2% year to date through Monday, while the S&P 500 SPX has gained 7.0%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.