CarMax Inc, the largest used-car retailer in the United States, reported a lower-than-expected quarterly profit and said car loan providers tightened credit terms late in the quarter.
CarMax shares fell more than 9 percent in early trading.
Continue Reading Below
Shares of auto retailers have risen this year as easier access to credit encouraged customers to buy more cars.
CarMax, which also has a financing business, said it would roll out a pilot project this quarter for lending to subprime borrowers with poor credit history.
The company said it would lend about $70 million through the program over the next 12 months.
CarMax's net income rose to $106.5 million, or 47 cents per share, in the third quarter ended Nov. 30 from $94.7 million, or 41 cents per share, a year earlier.
Analysts on average expected 48 cents per share, according to Thomson Reuters I/B/E/S.
Revenue increased 13 percent to $2.94 billion, above the average analyst estimate of $2.89 billion.
CarMax shares were down 9.2 percent at $48.19 in early trading on the New York Stock Exchange on Friday. They have risen about 41 percent this year to Thursday's close.