CarMax's Stock Drops After Sales Miss Expectations

Shares of CarMax Inc. tumbled 5.5% in premarket trade Wednesday, after the used car seller reported disappointing fiscal second-quarter results. Net earnings for the quarter ended Aug. 31 were $162.4 million, or 84 cents a share, compared with $172.2 million, or 82 cents a share, in the same period a year ago. Earnings per share were reduced by 4 cents for the modification of equity awards held by the company's retired chief executive officer. The FactSet EPS consensus was 88 cents. Sales rose to $4.00 billion from $3.88 billion, but missed the FactSet consensus of $4.11 billion, while same-store used unit sales increased 3.1% as a decline in store traffic was offset by improved conversion rates. Used vehicle unit sales increased 7.0%, beating the FactSet consensus of 2.9%. The stock had gained 3.3% year to date through Tuesday, while the S&P 500 had advanced 4.7%.