CarMax Shares Slip After Company Flags Margin Pressure and Higher Marketing Spend

Core Viewpoint - CarMax Inc. plans to reduce retail margins and increase marketing spending despite reporting better-than-expected third-quarter sales, leading to a nearly 2% decline in shares [1] Financial Performance - The company reported earnings of $0.43 per share for the third quarter of fiscal 2026, surpassing the consensus estimate of $0.37 [1] - Revenue decreased approximately 7% year over year to $5.8 billion, but exceeded analyst expectations of $5.69 billion [1] Sales Trends - Retail used unit sales fell 8% compared to the previous year, while comparable store used unit sales declined 9% [2] - CarMax provided a preliminary outlook for the fourth quarter of fiscal 2026, focusing on initiatives to improve sales trends [2] Strategic Initiatives - The company plans to enhance price competitiveness by lowering retail used unit margins during the upcoming quarter [2] - CarMax expects to increase marketing spending on a total unit basis compared to the previous year, although at a lesser degree than in the third quarter [3] - Marketing efforts will concentrate on customer acquisition to support vehicle purchases and overall sales as the company aims to stabilize demand [3]