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Carmax stock plunges following earnings miss

Shares of Carmax dipped sharply after the company missed second-quarter earnings expectations.

Video Transcript

DAVE BRIGGS: Used car seller CarMax, symbol KMX, which is a trending ticker right now on Yahoo Finance, shares reversing sharply on a steep drop in profit, more than 50%, as sales rose just 2%. Overall, prices for used cars and trucks fell slightly in August, but are still up 7.8% over the prior year. CarMax CEO Bill Nash saying of today's numbers, quote, "I just think consumers are prioritizing their spending a little differently," adding, "I think it's just a continuation of the deterioration of the overall consumer."

Not good news for that sector. CarMax shares down pretty steep today, as you can see there, and on pace for its worst day since 2020. They are now down nearly 50% year to date. You know, it sounds like one of those bellwether descriptions of their quarter that it's just the macro environment. Not necessarily anything going wrong at CarMax, but what we're seeing in the broader economy, Rachelle.

RACHELLE AKUFFO: And it's interesting because we've talked about what we've been seeing with used car prices being at their high, but in the report, they were saying that when you look at some of these higher average selling prices, that still didn't help to offset-- it basically barely offset what they were seeing in terms of a decline in unit sales. So that strong growth, those strong prices still not enough to really offset some of these headwinds that CarMax is facing and, obviously, the broader car industry, as they're also trying to get things like supply chain kinks worked out as well.