Carmax tumbles on worse-than-expected earnings and sinking used car sales

Shares of CarMax sank more than 13% in premarket trading following the company’s second-quarter earnings report.

The used vehicle retailer posted adjusted earnings per share of $0.64, missing Wall Street estimates of $1.04 per share by 38%. CarMax’s sales came in at $6.59 billion, a 6% drop from the same period last year and also below the analyst consensus of $7.01 billion.

CarMax sold 5.4% fewer used vehicles to retail customers, with retail unit sales coming in at 199,729. Its average selling price for the vehicles dipped 1% to $25,993.

CarMax’s sales are still ahead of rival Carvana, though the latter has been working diligently to close the gap. Despite selling fewer cars, Carvana’s market cap is more than 10x CarMax’s. CarMax’s report also weighed on Carvana in the premarket Thursday, with the stock down more than 3%.