CarMax Shares Dive On Weak Q4 Print, But Retail Bets Trump Tariffs Will Rev Up Used Car Demand

CarMax Inc (KMX) shares fell 17% on Thursday after the used car retailer's fourth-quarter results largely missed expectations.

Adjusted profit was $0.64 per share for the quarter ended Feb. 28, below estimated $0.65 per share, according to Reuters/LSEG.

Revenue grew 6.7% to $6 billion, narrowly beating estimates of $5.9 billion. However, the number of cars sold, 301,811, was below analysts' expectations of 312,800.

CarMax is the largest used car retailer in the United States, operating online and through its over 250 centers nationwide.

Shares, which saw their worst decline since September 2022, were also weighed by the company's decision to remove timelines associated with certain long-term goals, "given the potential impact of broader macro factors."

President Donald Trump has raised tariffs on imports from all major countries. 

Although some of the levies have been paused and will likely be renegotiated, companies across industries are bracing for higher prices and disruptions in their supply chains.

On Stocktwits, retail sentiment held in the 'bullish' territory, and message volume jumped to 'extremely high' from a day earlier.

One user said that as automobile prices are expected to rise, a large portion of buyers might turn to used cars, thus benefiting CarMax.

Another user said the stock could go above $75 if major U.S. banks report strong results on Friday.

KMX shares closed at $66.45 on Thursday. They are down 18.7% year to date.

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