CarMax, a used car dealership, experienced a sharp decline in its shares by almost 12% after reporting a decrease in fiscal second-quarter earnings. The company attributed this decline to weakening demand for used cars and a decrease in vehicle purchases by consumers and dealers. CarMax revealed that it bought 14.9% fewer vehicles compared to the previous year due to market depreciation affecting sales volume. The disappointing earnings report highlighted the challenges faced by the used car industry.
In other news, chipmaker Micron saw its shares fall by 3.4% before the bell after releasing a weaker-than-expected earnings forecast. The company estimated a fiscal first-quarter loss of $1.07 per share, which was worse than analysts’ expectations of a loss of 95 cents. Despite this, Micron’s fiscal fourth-quarter results exceeded expectations, with a narrower-than-expected loss and better-than-expected revenue. The market’s reaction to Micron’s forecast reflects concerns about the chip industry’s profitability amid ongoing supply chain disruptions.
Meanwhile, GameStop, the meme stock that gained popularity earlier this year, experienced a nearly 8% rally after appointing billionaire activist investor Ryan Cohen as its CEO. This move follows the firing of the previous CEO, Matthew Furlong, three months ago. GameStop’s decision to bring in Cohen as CEO signals its commitment to executing its transformation strategy and revitalizing the company. Investors are optimistic about the potential for change under Cohen’s leadership, leading to the uptick in the stock price.
Overall, CarMax’s disappointing earnings, Micron’s weaker forecast, and GameStop’s appointment of new CEO Ryan Cohen were the key developments impacting these companies’ shares in the premarket trading session.