CarMax Finance Number pointed to improved securitization demand, with three asset-backed securities issuances oversubscribed by 1.4x. This financing strength could give CarMax greater operational flexibility in upcoming quarters. For CarMax's fiscal fourth quarter ended Feb. 29, revenue declined 1.7% year over year to $5.63 billion. On the bottom line, that translated to net earnings of $50.3 million, or $0.32 per share, down 27.3% from $0.44 per share in the same year-ago period. Analysts, on average, were modeling earnings of $0.46 per share on revenue closer to $5.81 billion. Historically, the automotive industry is highly cyclical and sensitive to economic shifts. The current situation echoes demand-side contractions seen during the 2008-2010 Great Recession, which saw drastic drops in auto sales due to credit freezes and economic uncertainty. Similarly, the early 1980s recession, driven by high interest rates and oil shocks, also severely impacted auto sales. While the specific catalysts differ, the underlying theme of affordability challenges and constrained consumer demand remains a recurring threat to the sector. CarMax Finance Number highlighted digital loan application adoption now exceeding 65% of total originations. Operational efficiency gains can provide margin expansion opportunities that investors typically reward.
