CarMax Inc. Shares Doing Poorly; Peer Group Catches Cold

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CarMax Inc.'s
KMX
big losses Tuesday stemming from tighter lending standards dragged down a host of other auto retailers as investors feared contagion. CarMax, the big daddy of used car retailers with a market cap of $11.62 billion, said second-quarter same-store sales growth slowed to 0.2 percent from 15.9 percent a year earlier. RBC Capital Markets analyst Scot Ciccarelli said subprime financing has been a "major driver" of same-store sales growth for Carmax recently. Slower growth in the category will hurt same-store sales. The percentage of CarMax vehicles financed by third-party subprime lenders fell to 13.8 percent in the recent period, from more than 18 percent a year earlier, the company said. Those catching a cold among auto retailers Tuesday included Lentuo International Inc.
LAS
, off more than 7 percent; Asbury Automotive Group Inc.
ABG
down 3 percent and Lithia Motors Inc.
LAD
down nearly 4 percent. Penske Automotive Group Inc.
PAG
and AutoNation Inc.
AN
each fell more than 2 percent. PAG LAD GPI SAH AN ABG LAS
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Posted In: Analyst ColorEarningsNewsIntraday UpdateAnalyst Ratings
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