CarMax Reports a Significant Q3 Miss

CarMax (NYSE:KMX) reported its Q3 results, which were significantly worse than expected, with unit comps of -21% (compared to a predicted -20%), leading to a miss on earnings per share ($0.24 instead of the expected $0.73). Revenue was $6.5 billion, significantly missing the Street estimate of $7.34 billion.

The company is struggling due to weak overall demand in the industry (-7% unit sales in the quarter) and is losing market share because it is not reducing prices as much as its competitors, who are trying to quickly decrease their inventory in a declining market. Despite an easier comparison, the situation does not seem to be improving, with comps remaining at -21% in December.