SAN FRANCISCO, Dec. 18, 2025 (GLOBE NEWSWIRE) -- National investor rights law firm Hagens Berman reminds investors that the Lead Plaintiff Deadline in the securities class action lawsuit against CarMax, Inc. (NYSE: KMX) -- January 2, 2026 – is rapidly approaching. The lawsuit alleges that CarMax and certain of its executives misled investors about the true stability and growth prospects of its core business, leading to two separate and massive stock crashes. Hagens Berman urges investors who suffered substa ...

Financial Data and Key Metrics Changes - Total sales for the third quarter were $5.8 billion, down 6.9% year-over-year, reflecting lower volume [15] - Retail unit sales declined by 8%, with used unit comps down 9% [15] - Average selling price increased to $26,400, a year-over-year increase of $230 per unit [15] - Net earnings per diluted share were $0.43, down from $0.81 a year ago, impacted by $0.08 of restructuring expenses [16] - Total gross profit was $590 million, down 13% from the previous year [16] - SG&A expenses were $581 million, up 1% from the prior year [17] Business Line Data and Key Metrics Changes - Used retail margin decreased by 11% to $379 million, with profit per used unit at $2,235, down approximately $70 from last year's record high [16] - Wholesale vehicle margin decreased by 17% to $115 million, with gross profit per unit down to $899 [17] - CarMax Auto Finance (CAF) income was $175 million, up 9% year-over-year [17] Market Data and Key Metrics Changes - The company purchased approximately 238,000 vehicles during the quarter, down 12% from last year [16] - The average wholesale selling price declined by $40 per unit to $8,100 [15] Company Strategy and Development Direction - The company is focused on narrowing the price gap with the marketplace and enhancing customer experience [10] - Plans to reduce SG&A by at least $150 million by the end of fiscal year 2027 [18] - Emphasis on improving digital shopping experience and enhancing profitability through better customer engagement [11][12] - The company aims to reignite its entrepreneurial spirit and operate more efficiently [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges recent performance has been unacceptable and emphasizes the need for immediate change [6][7] - There is optimism that pricing and marketing actions will improve sales performance, although they may pressure near-term earnings [14][19] - The company is committed to transparency about progress and strengthening performance while searching for a permanent CEO [25] Other Important Information - The company is undergoing leadership changes, with an urgent search for a permanent CEO [7] - The board is focused on finding a leader who can drive sales and maximize the benefits of the omnichannel experience [7] Q&A Session Summary Question: What is the magnitude of the GPU reset expected in the February quarter? - Management indicated that margin reductions will be meaningful and are optimistic about improving retail sales trends [31] Question: Are there customer cohorts where CarMax has become less competitive? - Management identified the higher FICO segments as an area for improvement and plans to recapture lost volume [32][33] Question: What is the baseline SG&A for the $150 million reduction goal? - The baseline SG&A is approximately $2.5 billion, with reductions compared to last year [49] Question: What is the strategy for reducing COGS? - The company is focused on COGS reduction through initiatives like regional reconditioning centers and improved parts selection tools [81][82] Question: How is the company addressing the time to turn vehicles? - Management is focused on reconditioning speed and has seen improvements in sellable inventory despite lower overall inventory [88] Question: What is the outlook for service margins? - Service margins are under pressure, but the team has made strides in improving service margin over the past years [96][97]

Financial Data and Key Metrics Changes - Total sales for the third quarter were $5.8 billion, down 6.9% year-over-year, reflecting lower volume [15] - Retail unit sales declined by 8%, with used unit comps down 9% [15] - Average selling price increased to $26,400, a year-over-year increase of $230 per unit [15] - Net earnings per diluted share were $0.43, down from $0.81 a year ago, impacted by $0.08 of restructuring expenses [16] - Total gross profit was $590 million, down 13% from the previous year [16] - SG&A expenses were $581 million, up 1% from the prior year [17] Business Line Data and Key Metrics Changes - Used retail margin decreased by 11% to $379 million, driven by lower volume and profit per used unit of $2,235 [16] - Wholesale vehicle margin decreased by 17% to $115 million, with gross profit per unit down approximately $120 year-over-year [17] - CarMax Auto Finance (CAF) income was $175 million, up 9% over last year [17] Market Data and Key Metrics Changes - The company purchased approximately 238,000 vehicles during the quarter, down 12% from last year [16] - The average wholesale selling price declined by $40 per unit to $8,100 [15] Company Strategy and Development Direction - The company is focused on narrowing the price gap with the broader marketplace by lowering margins and increasing marketing spend [10][12] - A renewed emphasis on customer experience and digital selling capabilities is being prioritized to drive conversion and improve customer satisfaction [11][25] - The company aims to reduce SG&A expenses by at least $150 million by the end of fiscal year 2027 [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that recent results have been unacceptable and emphasizes the need for immediate change [5][10] - There is optimism that immediate pricing and marketing actions will improve sales performance, although they may pressure earnings in the near term [13][19] - The company believes it has the necessary attributes for a successful turnaround and is committed to strengthening performance [14][25] Other Important Information - The board is actively searching for a permanent CEO who can drive sales and maximize the benefits of the omnichannel experience [6][7] - The company is committed to leveraging technological platforms and process enhancements to reduce costs [12] Q&A Session Summary Question: Can you provide insight on the GPU reset expected in February? - Management indicated that margin reductions will be meaningful and are optimistic about improving retail sales trends [30] Question: Are there customer cohorts where CarMax has become less competitive? - Management noted a loss of volume in the higher FICO segments and is focused on recapturing that market [31][32] Question: What is the baseline SG&A for the $150 million reduction goal? - The baseline SG&A is approximately $2.5 billion, with reductions compared to last year [47][48] Question: What is the strategy for reducing COGS? - The company is focused on COGS reduction through initiatives like regional reconditioning centers and improved parts selection tools [79][80] Question: What is the outlook for service margins? - Service margins are under pressure, with expectations of being slightly profitable or unprofitable for the full year depending on sales performance [93][94]

Financial Data and Key Metrics Changes - Total sales for the third quarter were $5.8 billion, down 6.9% year-over-year, reflecting lower volume [12] - Retail unit sales declined by 8%, with used unit comps down 9% [12] - Average selling price increased to $26,400, a year-over-year increase of $230 per unit [13] - Net earnings per diluted share were $0.43, down from $0.81 a year ago, impacted by $0.08 of restructuring expenses [14] - Total gross profit was $590 million, down 13% from the previous year [15] - SG&A expenses were $581 million, up 1% from the prior year, driven by marketing investments and restructuring expenses [15] Business Line Data and Key Metrics Changes - Used retail margin decreased by 11% to $379 million, with profit per used unit at $2,235, down approximately $70 from last year's record high [15] - Wholesale vehicle margin decreased by 17% to $115 million, with gross profit per unit declining by approximately $120 year-over-year [15] - CarMax Auto Finance income increased by 9% to $175 million, supported by underwriting and pricing adjustments [19] Market Data and Key Metrics Changes - The company purchased approximately 238,000 vehicles during the quarter, down 12% from last year [14] - The average wholesale selling price declined by $40 per unit to $8,100 [13] Company Strategy and Development Direction - The company is focused on narrowing the price gap between its offerings and the marketplace, lowering margins, and increasing marketing spend [8][10] - A renewed emphasis on customer experience and digital selling capabilities is being prioritized to drive conversion and improve customer satisfaction [9][10] - The company aims to reduce SG&A expenses by at least $150 million by the end of fiscal year 2027 [16] - The board is actively searching for a permanent CEO who can drive sales and strengthen the brand [5][6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that recent results have been unacceptable and emphasized the need for immediate change [4][5] - There is optimism that immediate pricing and marketing actions will improve sales performance, although they may pressure earnings in the near term [11] - The company believes it has the necessary attributes for a successful turnaround and is committed to strengthening performance [11][23] Other Important Information - The company is undergoing leadership changes, with an interim CEO and chair in place while searching for a permanent CEO [4][5] - The company is committed to transparency about its progress and performance [23] Q&A Session Summary Question: What is the magnitude of the GPU reset expected in the February quarter? - Management indicated that margin reductions will be meaningful and are optimistic about improving retail sales trends [28][29] Question: Are there specific customer cohorts where CarMax has become less competitive? - Management noted a loss of volume in the higher FICO segments and is focused on recapturing those customers [30][31] Question: Will CarMax adjust interest rates to be more competitive? - Management stated they monitor market rates and will adjust accordingly, focusing on the overall offering rather than just interest rates [32][33] Question: What is the baseline SG&A from which the company expects to cut $150 million? - The baseline SG&A is approximately $2.5 billion, with reductions compared to last year [46][47] Question: What is the strategy for reducing COGS? - The company is focused on COGS reduction through initiatives like regional reconditioning centers and improved parts selection tools [78][79] Question: How is the board approaching the search for a new CEO? - The board is looking for a leader with experience in complex businesses and digital transformation, with urgency in the search process [96]

Core Insights - CarMax reported quarterly earnings of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, but down from $0.81 per share a year ago, indicating an earnings surprise of +59.38% [1] - The company generated revenues of $5.79 billion for the quarter ended November 2025, surpassing the Zacks Consensus Estimate by 1.18%, but down from $6.22 billion year-over-year [2] Earnings Performance - Over the last four quarters, CarMax has surpassed consensus EPS estimates two times and topped revenue estimates three times [2] - The earnings surprise in the latest quarter contrasts with a previous quarter where the company reported earnings of $0.64 against an expectation of $1.03, resulting in a surprise of -37.86% [1][2] Stock Performance - CarMax shares have declined approximately 49.8% since the beginning of the year, while the S&P 500 has gained 14.3% [3] - The current Zacks Rank for CarMax is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $5.67 billion, and for the current fiscal year, it is $2.65 on revenues of $25.55 billion [7] - The automotive retail and wholesale parts industry, to which CarMax belongs, is currently ranked in the bottom 33% of Zacks industries, suggesting potential challenges ahead [8]

Leadership Transition - David McCreight was announced as Interim President & CEO, and Thomas Folliard as Interim Executive Chair, effective December 1, 2025[6] - Former Chief Executive Officer, Bill Nash, stepped down from his position and as a member of the Board effective December 1, 2025[9] Q3 2026 Financial Performance - Net earnings per share decreased by 24.7% year-over-year to $0.64[24, 27] - Total gross profit decreased by 12.9% year-over-year to $590.0 million[24] - SG&A expense increased by 1.0% year-over-year to $581.4 million[24] - CarMax Auto Finance (CAF) income increased by 9.3% year-over-year to $174.7 million[27] Sales Performance - Total vehicles bought decreased by 11.7% year-over-year to 238,000 units[24] - Retail used unit sales decreased by 6.2% year-over-year[24] - Wholesale unit sales decreased by 9.0% year-over-year[24] Capital Allocation - The company repurchased $201.6 million in shares of common stock[17]

Core Insights - CarMax reported a decline in third-quarter revenue and profit due to weaker demand and falling prices for used vehicles in the U.S. [1] Company Summary - The company experienced a drop in revenue and profit in the third quarter [1] - The decline is attributed to reduced demand for used vehicles [1] - Falling prices of used vehicles in the U.S. have negatively impacted the company's financial performance [1]

Core Insights - The used car retailer reported better-than-expected earnings and revenue, indicating strong performance in the current market environment [1] - Despite the positive earnings report, the company plans to reduce margins on used cars, which may impact future profitability [1] Financial Performance - The company achieved earnings that surpassed market expectations, reflecting effective cost management and sales strategies [1] - Revenue figures also exceeded forecasts, suggesting robust demand for used vehicles [1] Strategic Outlook - The decision to reduce margins on used cars indicates a strategic shift, potentially aimed at increasing market share or responding to competitive pressures [1] - This move may lead to a reevaluation of pricing strategies in the used car market [1]

CarMax reported lower fiscal third-quarter sales and profit as the company's hold on the used-car market continues to slip. ...

Sales Performance - Retail used unit sales decreased by 8.0% to 169,557 units, while comparable store used unit sales declined by 9.0%[6] - Total wholesale vehicle unit sales decreased by 6.2% to 127,603 units, with wholesale revenues declining by 6.3%[7] - Used vehicle sales for the three months ended November 30, 2025, were $4,548,197, representing 78.5% of total sales, compared to $4,888,858 (78.6%) in the same period of 2024[42] Financial Performance - Total net sales and operating revenues decreased by 6.9% to $5,793.9 million compared to the prior year's third quarter[21] - Net earnings for the three months ended November 30, 2025, were $62.2 million, a decline of 50.4% compared to $125.4 million in 2024, resulting in a net earnings per diluted share of $0.43[32] - Gross profit for the three months ended November 30, 2025, was $590.0 million, down 12.9% from $677.6 million in 2024, with a gross profit margin of 10.2%[28] - Used vehicle gross profit decreased by 10.8% to $378.9 million for the three months ended November 30, 2025, compared to $424.8 million in 2024[28] - Net earnings for the nine months ended November 30, 2025, decreased to $367,974, down from $410,690 in 2024, representing a decline of approximately 10.4%[46] Expenses and Costs - SG&A expenses increased by 1.0% to $581.4 million, with SG&A as a percentage of gross profit rising to 98.5% from 85.0%[12] - Total SG&A expenses for the three months ended November 30, 2025, were $581.4 million, a slight increase of 1.0% from $575.8 million in 2024, with SG&A as a percentage of gross profit rising to 98.5%[30] - The provision for loan losses increased to $317,335, up from $266,406, indicating a rise of approximately 19.1%[46] Cash Flow and Capital Management - Net cash provided by operating activities significantly increased to $2,338,114, compared to $478,062 in the previous year, marking a rise of over 388%[46] - Capital expenditures rose to $407,962, up from $340,322, indicating an increase of approximately 19.9%[46] - Proceeds from issuances of long-term debt increased to $87,000, compared to $34,400 in the prior year, reflecting a growth of 153.2%[46] - Cash, cash equivalents, and restricted cash at the end of the period decreased to $912,803 from $975,836, a decline of about 6.4%[46] Shareholder Actions - The company repurchased 4.6 million shares of common stock for $201.6 million, with $1.36 billion remaining available for repurchase[17] Future Outlook - The company expects to achieve SG&A reductions of at least $150 million in exit rate savings by the end of fiscal 2027[13] - The company plans to release results for the fourth quarter ending February 28, 2026, on April 14, 2026[35] Inventory and Assets - The company reported a decrease in inventory to $3,127,948 as of November 30, 2025, from $3,934,622 as of February 28, 2025[44] - Total current assets as of November 30, 2025, were $4,198,205, a decrease from $5,077,636 as of February 28, 2025[44] - Total assets as of November 30, 2025, were $25,562,355, down from $27,404,206 as of February 28, 2025[44] - Total liabilities as of November 30, 2025, were $19,497,821, compared to $21,161,218 as of February 28, 2025[44] Auto Finance Performance - CarMax Auto Finance (CAF) income increased by 9.3% to $174.7 million, driven by a gain on sale of $27.0 million from a securitization transaction[15] - CarMax Auto Finance income for the three months ended November 30, 2025, was $174,738, an increase from $159,885 in 2024[42] - The average auto loans outstanding for the three months ended November 30, 2025, was $16,805.2 million, down from $17,771.7 million in 2024[31] - The net penetration rate for auto loans was 42.6% for the three months ended November 30, 2025, slightly down from 43.1% in 2024[31]