carmax inc investors were enduring the worst day in more than 20 years on thursday after the usedcar retailer missed earnings expectations by a wide margin citing “affordability” challenges stemming from inflation and low consumer confidence the stock kmx tumbled 239 in midday trading on track for the biggest oneday percentage decline since its record 281 plunge on jan 20 2000 it was by far the worst performer in the sp 500 index spx on thursday and was headed for the lowest close since april 2020 “macro factors including vehicle affordability that stem from persistent and broad inflation climbing interest rates and low consumer confidence all led to a marketwide decline in used auto sales” said chief executive bill nash on a postearnings conference call with analysts according to a factset transcript net income for the quarter to aug 31 fell to 1259 million or 79 cents a share from 2853 million or 172 a share in the same period a year ago that was well below the factset consensus for earnings per share of 139 revenue increased 2 to 814 billion below the factset consensus of 854 billion meanwhile cost of revenue increased more than revenue rising 33 to 741 billion to knock gross margin down to 905 from 1021 ceo nash said he believed sales were hurt by a “shift” in what consumers prefer to spend their money on from large purchases to smaller discretionary items in response nash said the company continued to offer a higher mix of lowerpriced vehicles which also hurt margins total vehicle unit sales fell 103 to 376616 but the average price for a used vehicle increased 96 to 28657 and the average wholesalevehicle price jumped 17 to 10179 comparablestore used vehicle unit sales dropped 83 compared with the factset consensus for a 36 decline nash said the secondquarter started with a “lowsingledigit” percentage decline in comparablestore sales but then sales “fell sharply” at the beginning of july with august sales ending with a “midteens” percentage decline chief financial officer enrique mayormora said on the analyst call that the company “pulled additional levers” to align expenses with the lower sales levels “this included further reducing staffing through attrition in our stores and cecs customer experience centers pausing on a portion of the hiring and contractor utilization in our corporate offices as well as better aligning marketing spend to sales” mayormora said ceo nash ended the prepared remarks section of the call by assuring wall street that the challenges won’t last “as i close i want to reiterate that while the market conditions and consumer behaviors are challenging we believe that these pressures are transitory and that our foundation remains strong” carmax stock has plummeted 495 yeartodate while the spdr consumer discretionary select sector exchangetraded fund xly has slid 286 and sp 500 has shed 235