(Bloomberg) -- CarMax Inc.’s shares fell the most in more than 18 months after reporting profits that missed Wall Street’s expectations as high monthly payments scare off would-be used-car buyers. 

Earnings per share in the fourth quarter came to 32 cents, the company said Thursday in a statement. That was below analysts’ consensus estimate for 45 cents and trailed the 44 cents of a year ago. Sales also missed estimates for the second consecutive quarter.

The Richmond, Virginia-based company’s stock pared an early drop of as much as 14% — the most since Sept. 29, 2022 — to trade down 11% to $70.27 as of 1:53 p.m. in New York. That unraveled what had been a 3.3% gain this year as of the close on Wednesday.  

Carmax blamed “vehicle affordability challenges” for the weak performance, citing inflationary pressure, high interest rates, tougher lending standards and sagging consumer confidence.

“Consumers are just waiting on the sidelines right now” for monthly payments to come down, Chief Executive Officer Bill Nash said during a conference call with analysts. 

Used car prices have come down from 2022 peak levels, but remain elevated compared with pre-pandemic levels. Financing costs have risen in step with interest rates, making it harder for buyers to cope with elevated monthly payments. 

The average monthly payment for CarMax’s customers was about $530, compared with $400 before the pandemic, Jon Daniels, senior vice president of auto finance, said during the call. 

The used-car dealer sold about 172,000 vehicles in the quarter, slightly more than last year, though its wholesale business contracted 4%. It made those sales at lower price points as well. Carmax said its gross profit per unit declined to $2,251 in the latest quarter, down from $2,277 in the same period in 2023. Wholesale vehicle gross profit per unit also fell. 

--With assistance from Gabriel Sanchez.

(Updates chart and share prices from third paragraph.)

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