CarMax (KMX) showrooms are beginning to display a mounting discomfort with the weakening quality of auto loans. After whiffing on earnings Wednesday, CarMax shares were down about 3% in midday trading after CFO Thomas Reedy said on an earnings call with analysts that declining credit quality has helped wind down showroom turnout. Reedy said "there is some correlation between the quality of offer that we're providing in the stores and the application volume because there's word-of-mouth in the customer space." And he added the quality of credit being offered is "currently down year-over-year and has declined over the last several quarters," he added. Overall, CarMax's nonadjusted earnings per share of $0.84 fell short of consensus estimates by nearly 5% and sales of $4 billion fell short by about 3%.
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