CarMax to Slow Expansion After June/July Decline
Used vehicle retailer CarMax Inc. said Wednesday that its same-store used-unit sales fell 17 percent in the months of June and July as high gas prices drove customers away from vehicle purchases.
RICHMOND, Va. (AP) — Used vehicle retailer CarMax Inc. said Wednesday that its same-store used-unit sales fell 17 percent in the months of June and July as high gas prices drove customers away from vehicle purchases.
CarMax originally withdrew its fiscal-year sales and earnings guidance in June, after posting a steep drop in sales beginning Memorial Day weekend. From the Memorial Day weekend through the end of May, CarMax said its same-store sales — or sales at stores open at least a year — fell 5 percent.
Sales continued to fall in June and July, resulting in an average drop of 17 percent for the two months, the company said.
As a result, CarMax said it reduced its used vehicle inventory by about 9,500 units during those two months and adjusted the vehicle mix to reflect changes in consumer preferences.
The company said it also has worked to lower its variable store staffing levels, mainly through scheduling and attrition, is re-evaluating all open positions and is continuing to focus on controlling overhead expenses.
CarMax said it also plans to temporarily slow its store growth and push back some store openings to the next fiscal year.
"While this is clearly a difficult environment for us, we remain confident in our superior consumer offer and our long-term growth opportunity," Chief Executive Tom Folliard said in a news release.
The company said at its annual meeting in June that it planned to new stores and expand even amid difficult economic environment. At the time, CarMax said it expected to increase its number of stores to between 200 and 300 stores within 10 years and expand outside its current markets. The company currently operates 98 locations.
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