The Richmond, Virginia-based company said it expects to sell over 2 million combined retail and wholesale units annually between 2026 and 2030, compared to its previous target of achieving that goal by 2026.
"We believe vehicle affordability challenges continued to impact our fourth quarter unit sales performance, with ongoing headwinds due to widespread inflationary pressures," CarMax said.
The company's results dragged shares of other auto retailers such as Carvana and AutoNation down by about 3.4% and 1.6%, respectively, in trading before the bell.
CarMax and other used-car retailers had bought more vehicles at inflated car prices amid a skewed supply of new cars during the pandemic.
However, improved supply of new vehicles forced used-car retailers to cut spending and offer heavy discounts. In some cases, this led to the vehicles costing less than the price they were acquired for.
Additionally, attractive leasing options and trade-in deals on new vehicles lured some buyers towards those models.
Last December, CarMax had warned of a hit to its profit-sharing revenue in the fourth quarter due to the inflationary pressures its partners experienced.
Fourth-quarter net income fell to $50.3 million, or 32 cents per share, compared with $69 million, or 44 cents per share a year ago. Analysts expected the company to post a net income of 49 cents per share, according to LSEG data.
Sales of used vehicles fell marginally to about $4.49 billion, from $4.53 billion a year ago.
However, sales from its advertising and subscription unit, which includes revenues from Edmunds, its auto consultancy business, rose about 9%.
The firm's overall fourth-quarter net revenue fell 1.7%, to $5.6 billion, below analysts' estimate of $5.8 billion.
(Reporting by Nathan Gomes in Bengaluru; Editing by Pooja Desai)
