KMX: Consumers Are Scrapping Discretionary Purchases

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Leading used car retailer CarMax (KMX) reported 3Q22 earnings for the period ended August 31 Thursday morning. Used vehicle sales units declined 6.4% year over year to 216,939 after consumers couldn’t get their hands on enough cars during the pandemic. KMX’s margins were also squeezed resulting in a 54% decline in EPS to 79 cents. The stock is currently down more than 20%. (As an aside the average selling price for used vehicles was $28,657 compared to $28,844 in the previous quarter supporting my contention that inflation in the real world – as measured by market prices – is stabilizing and rolling over despite the August CPI Report).

Combined with Federal Express’s (FDX) results last week and the Fed’s vise grip on inflation I am even more convinced the next leg down is upon us. We’ll get more data this afternoon when Nike (NKE) and Micron (MU) report.

#earnings for the week https://t.co/lObOE0dgsr $BBBY $CCL $MU $NKE $RAD $JBL $KMX $SNX $CBRL $BB $PAYX $UNFI $HEPS $DAVA $CTAS $THO $PRGS $AYTU $MTN $CNXC $NEOG $STEM $CALM $CGNT $EPAC $NAPA $JEF $WOR $CMTL $IPW $ISR $MLKN $LILM $FERG $CIR $NBTX pic.twitter.com/7h3E15uHug
— Earnings Whispers (@eWhispers) September 24, 2022