CarMax had a rough quarter as sales slowed

Prominent used cars seller CarMax’s second quarter revenue plummeted 6% from last year to $6.6 billion and below Wall Street expectations of $7.01 billion. Its stock plunged 20% after the report on Thursday.

Vehicle sales slipped 4.1% from the same period in 2024, and net income dropped 28% to $95.4 million. CEO Bill Nash described the quarter as challenging, noting that sales weakened progressively each month.

The decline reflects softer demand, tariff-related pullback, and inventory depreciation in auto sellers. Consumers flocked to retailers in the first quarter, anticipating that President Donald Trump’s tariff hikes would increase auto prices. As it came into effect, the demand has also slowed.

CarMax purchased 2.4% fewer cars from dealers and consumers in Q2. Its stock is down ~44% so far this year. The company plans to cut at least $150 million in expenses over the next 18 months to offset the challenges.

The disappointing results also dragged down shares of other auto retailers, like Group 1 Automotive, AutoNation, Sonic Automotive, and Lithia Motors, between 2% and 6%.