CARMAX (KMX) Company Report

Investigation Scope: Faruqi & Faruqi is examining claims for investors who suffered losses in CarMax shares between June 20, 2025 and September 24, 2025.
Allegations: The complaint asserts CarMax and its executives overstated growth prospects and concealed that fiscal 2026 growth was driven by tariff speculation; CarMax Auto Finance income declined 11.2% due to a $142.2 million provision for loan losses vs. $112.6 million a year earlier.
Market Impact: After Q2 FY2026 results, CarMax stock plunged $11.45 per share (≈20%), closing at $45.60 on September 26, 2025.
Lead Plaintiff Deadline: Investors must move to be lead plaintiff by January 2, 2026.

Dec 30, 2025, 4:16 PM

Press Release

CarMax investors file class action lawsuit

KMX

Legal Proceedings

Demand Weakening

The Portnoy Law Firm has filed a class action on behalf of investors who bought CarMax securities between March 5, 2024 and October 8, 2025, with a lead plaintiff motion deadline of January 2, 2026.
The suit alleges CarMax overstated sustainable demand, which was artificially boosted by a pull forward of purchases ahead of U.S. tariffs, and possibly misreserved its car loan portfolio.
On September 25, 2025, CarMax reported Q2 FY2026 results showing a 5.4% decline in retail used unit sales, 6.3% decline in comparable store used unit sales, 2.2% decline in wholesale units, and net income of $95.4 million (down from $132.8 million), triggering a roughly 20% share price drop.

Dec 30, 2025, 3:02 PM

Press Release

CarMax faces securities investigation by Faruqi & Faruqi

KMX

Legal Proceedings

Faruqi & Faruqi, LLP is investigating potential claims for investors who suffered losses in CarMax between June 20, 2025 and September 24, 2025.
Allegations center on overstated growth prospects and misstatements in CarMax Auto Finance results, including an 11.2% decline in CAF income due to a $142.2 million provision for loan losses in Q2 FY 2026.
After the Q2 disclosure, CarMax shares fell 20% to $45.60 on September 26, 2025.
Investors must move by January 2, 2026 to seek lead plaintiff status in the federal class action.

Dec 26, 2025, 3:50 PM

Press Release

CarMax faces securities class action over alleged misstatements

KMX

Legal Proceedings

Labaton Keller Sucharow LLP filed a securities class action complaint against CarMax and certain executives (including Jon Daniels) on December 23, 2025, covering securities acquired between June 20 and November 5, 2025.
The complaint alleges CarMax misstated the performance of 2022/23 vintage loans, maintained inadequate loss reserves, held an oversupplied and depreciating inventory, and materially overstated receivables and earnings.
Investors must file motions for appointment as lead plaintiff by January 2, 2026 to represent the class.
CarMax operates approximately 250 used-car retail locations and periodically adjusts its loan-loss reserve based on credit risk and loan performance.

Dec 23, 2025, 9:51 PM

Press Release

CarMax faces securities fraud lawsuit alleging pull-forward demand and finance risk concealment

KMX

Legal Proceedings

Demand Weakening

Hagens Berman filed a securities class action against CarMax, covering investors who purchased between June 20 and November 5, 2025, with a January 2, 2026 lead plaintiff deadline.
The complaint claims CarMax touted robust Q1 2026 growth without disclosing a tariff-driven demand pull-forward and hid a $142 million loan loss provision jump due to rising credit risk.
On September 25, 2025, CarMax reported a 24% net EPS decline and the $142 million provision—sending shares down 20%; a CEO termination and weak Q3 guidance on November 6, 2025, triggered a further stock drop.

Dec 22, 2025, 1:49 PM

Press Release

CarMax reports Q3 FY2026 results and leadership changes

KMX

Earnings

CEO Change

Share Buyback

Interim leadership transition: Board appointed David as Interim President and CEO, with an ongoing search for a permanent CEO following the departure of the prior CEO.
Sales and earnings decline: Q3 total sales of $5.8 B (–6.9% Y/Y) with retail unit sales down 8% and EPS of $0.43 (versus $0.81 a year ago), including a $0.08 restructuring charge.
Margins and CAF growth: Gross profit of $590 M (–13% Y/Y) and CarMax Auto Finance income of $175 M (+9% Y/Y) driven by full-spectrum lending and a gain on sale.
Cost management and buybacks: SG&A expenses of $581 M (+1% Y/Y); on track for $150 M exit‐rate savings by FY27; repurchased 4.6 M shares for $202 M, with $1.36 B authorization remaining.
Turnaround initiatives: Leadership is implementing pricing reductions, stepped‐up marketing, digital experience enhancements, and SG&A/COGS cuts to close the price gap and improve profitability.

Dec 18, 2025, 2:00 PM

Transcript

CarMax reports Q3 FY 2026 results

KMX

Earnings

Management Change

Share Buyback

CarMax posted net sales of $5.79 billion (down 6.9% YoY), net earnings of $62.2 million and EPS of $0.43 (down 50.4% and 46.9% YoY).
Retail gross profit decreased 12.9% to $590.0 million, while CarMax Auto Finance income rose 9.3% to $174.7 million.
The company repurchased $201.6 million of common stock during the quarter.
David McCreight was named Interim President & CEO and Tom Folliard Interim Executive Chair, effective December 1, 2025, following Bill Nash’s departure.
For Q4 FY 2026, CarMax expects to lower retail used unit margins and increase marketing spend to drive sales improvement.

Dec 18, 2025, 2:00 PM

Presentation

CarMax reports Q3 2026 results and interim leadership update

KMX

Earnings

CEO Change

Share Buyback

Board enacted immediate leadership change: Tom Folliard named Interim Executive Chair and David McCreight as Interim President and CEO, with search for a permanent CEO underway.
Q3 total sales of $5.8 billion (down 6.9% y/y); net earnings per diluted share of $0.43 vs. $0.81 a year ago; SG&A expenses of $581 million, on track for $150 million in exit run-rate savings by end of FY27.
Retail and finance metrics: used retail gross profit of $379 million (profit per unit $2,235); wholesale margin of $115 million ($899 per unit); CarMax Auto Finance income of $175 million (up 9% y/y); repurchased 4.6 million shares for $202 million.
Strategic priorities include narrowing the price gap via lower margins and increased marketing, comprehensive reviews to cut COGS and SG&A, enhancing the digital selling experience, and rolling out redesigned MaxCare plans nationwide in Q1 FY27.

Dec 18, 2025, 2:00 PM

Transcript

CarMax announces Q3 FY2026 results and interim leadership changes

KMX

Earnings

CEO Change

Guidance Update

CarMax appointed Tom Folliard as Interim Executive Chair and David Lowenstein as Interim President & CEO, with the board actively searching for a permanent CEO to drive sales, brand strength, and operations improvements.
In Q3 FY2026, CarMax Auto Finance originated $1.8 billion of loans, achieving 42.6% sales penetration and generating $175 million of CAF income; net interest margin was 6.2%, and loan loss reserves totaled $475 million (2.87% of portfolio).
For Q4, marketing spend is expected to be up year-over-year on a per-unit basis, while service margins will face seasonal pressure and the annualization of prior cost-coverage leverage.
Management is testing price reductions to narrow the GPU gap, alongside digital experience enhancements, SG&A and COGS initiatives, and expansion of regional reconditioning centers to boost competitiveness and operational efficiency.

Dec 18, 2025, 2:00 PM

Transcript

CarMax reports Q3 FY2026 results

KMX

Earnings

CEO Change

Share Buyback

Reported Q3 FY26 net earnings per diluted share of $0.43, down 47% YoY, impacted by $0.08 of restructuring charges.
Generated $5.79 B in net sales (−6.9% YoY) and $590.0 M in gross profit (−12.9% YoY).
Retail used unit sales fell 8.0% to 169,557 units with $2,235 gross profit per unit; wholesale units declined 6.2% with $899 profit per unit.
Announced leadership changes effective December 1, 2025: David McCreight named Interim President & CEO; Tom Folliard named Interim Executive Chair; search for a permanent CEO is underway.
Executed $201.6 M in share repurchases and saw CarMax Auto Finance income rise 9.3% to $174.7 M.