tumbled Wednesday after the companyposted disappointing first-quarter earnings and said it will suspendearnings guidance for the next year.
The auto retailer said first-quarter profit fell to $29.6 million,or 13 cents a share, from $65.4 million, or 30 cents a share, in theyear-ago quarter. Analysts expected CarMax to notch a profit of 22cents a share, according to Thomson Reuters.
CarMax said that sales rose to $2.21 billion from $2.15 billion ayear ago, led by a 6% increase in used vehicle revenues. However, WallStreet expected the company to report revenue of $2.27 billion.Revenue from CarMax's auto finance arm plummeted to $9.8 million from$37.1 million
Additionally, the company said that wholesale industry prices forSUVs and trucks declined nearly 25% during the quarter, approximatelyfour times the normal depreciation expected over this period and wellin excess of the depreciation expected over a full year.
"The slowdown in the economy, the dramatic rise in gasoline andfood costs and the related impact on consumer spending adverselyaffected our first quarter performance," said Tom Folliard, presidentand CEO of CarMax. "This is the most rapid depreciation of any vehiclesegment that we have experienced in our 15 years."
CarMax added it was suspending guidance for fiscal 2009. "As aresult of the combination of the uncertain economic conditions, risingfuel and food costs and weak consumer sentiment, exacerbated by therapid depreciation in SUVs and trucks, we are temporarily suspendingguidance on comparable store sales and earnings for fiscal 2009,"Folliard said.
Shares of CarMax were dropping $2.41, or 13.1%, to $15.93. Amongrelated stocks,
was slumping 4.7% to $12.89, and
Penske Automotive Group
slid 5% to $15.85.