CarMax profit tumbles amid slowing economy
Written on September 23, 2008
CarMax Inc (KMX.N: Quote, Profile, Research, Stock Buzz), the largest U.S. retailer of used cars, reported a 78 percent drop in quarterly profit and said economic uncertainty made it almost impossible to predict when the industry would recover.
Shares of the company fell nearly 4 percent.
“The slowdown in the economy and reductions in consumer spending power resulting from higher gasoline and food costs continued to create a difficult environment for our business,” CarMax Chief Executive Tom Folliard said on Monday.
“There is so much volatility in the marketplace right now,” Folliard said. “It’s almost impossible to predict the next six months or a year.”
Net income fell to $14 million, or 6 cents per share, in the second quarter ended August 31 from $65 million, or 29 cents per share, a year earlier.
Analysts on average had expected the Richmond, Virginia-based company to earn 10 cents per share.
Net revenue fell 13 percent to $1.84 billion.
The U.S http://us-no-fax-payday-loans.com. auto business has been hammered by a slowing economy and tighter consumer credit, as well as slumping demand for trucks and SUVs.
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