Market Overview

CarMax, Inc Shares Doing Poorly; Peer Group Catches Cold


CarMax, Inc's (NYSE: 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 $11.52 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 (NYSE: LAS), off more than 6 percent; Asbury Automotive Group, Inc. (NYSE: ABG) down 3 percent and Lithia Motors Inc (NYSE: LAD) down nearly 4 percent.

Penske Automotive Group, Inc. (NYSE: PAG) and AutoNation, Inc. (NYSE: AN) each fell more than 2 percent.


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Posted-In: RBC Capital Markets Scot CiccarelliAnalyst Color Earnings News Intraday Update Movers

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