By Gary S. Vasilash
This is the sort of thing that can cause someone—employee, investor—to gulp when they read it in relation to a company’s Q3 financials:
“We have taken deliberate steps to support our business for both the near-term and the long-term. We are managing our business prudently, and prioritizing initiatives that reduce costs, unlock operating efficiencies, profitably grow market share and create better experiences for our associates and customers.”
That’s Bill Nash, president and chief executive officer of CarMax, the largest retailer of used vehicles in the U.S.
He went on: “As the market leader, we have spent almost thirty years building a diversified business that can profitably navigate the ups and downs of the used car industry. We believe we are well positioned to effectively manage through this cycle.”
When someone notes they’ve been in this for decades and will consequently be able to handle what is occurring now, it is clear that it is tough.
In the case of CarMax, compared to Q3 last year:
- Net revenues down 23.7%
- Total retail used units sold down 20.8%
- Total wholesale units sold down 36.7%
And so on.
While it is fairly well known that there is an affordability problem in the new vehicle sales business, CarMax notes that vehicle affordability—as well as inflation, increasing interest rates and low consumer confidence—are having a negative impact on its business, as well.
Things may be improving. But probably not as quickly as buyers and sellers would like.