(Reuters) -CarMax's CEO Bill Nash is stepping down by end of the month, the preowned car retailer said on Thursday, after it forecast a weak third-quarter profit as it battles to cut costs and better navigate
lower vehicle demand.
Shares of the company slid over 12% in early trade after the news. Including the session's move, they have lost about 50% of their value so far this year.
The largest U.S. used car retailer has faced difficulty reselling vehicles at the higher prices it paid for them, after a tariff-induced demand surge earlier this year triggered a marketwide dip.
"We make car buying and selling simple, transparent, and personalized... however, our recent results do not reflect that potential and change is needed," said board chair Tom Folliard.
Additionally, a credit blowout in the automotive space has made it tougher for buyers to get loans.
The outgoing CEO Nash, who has been in the role for nearly a decade, will hand over charge on December 1 to board member David McCreight who brings over two decades of experience at retail firms such as Lululemon.
McCreight will lead the company in the interim till a permanent CEO is identified and takes over, the company said.
CarMax said on Thursday it expects a 8% to 12% fall in third-quarter comparable store sales, citing sluggish retail demand and higher marketing spend.
The company also forecast third-quarter net profit in the range of 18 cents to 36 cents per share, far below analysts' estimate of 70 cents per share, according to data compiled by LSEG.
CarMax said that its profit forecast includes expenses related to the leadership change and some workforce reductions.
(Reporting by Nathan Gomes and Parth Chandna in Bengaluru; Editing by Shailesh Kuber)
