CarMax(US:KMX) Globenewswire·2025-12-23 18:06Core Viewpoint - A securities class action lawsuit has been filed against CarMax, Inc. alleging that the company misled investors about its business stability and growth prospects, resulting in significant stock declines [2][4]. Summary by Relevant Sections Lawsuit Details - The lawsuit claims that CarMax and its executives concealed critical information regarding the company's operational challenges, leading to two major stock crashes [2][5]. - The class period for the lawsuit is defined as June 20, 2025, to November 5, 2025 [3]. Allegations - Alleged Concealment: CarMax reportedly misrepresented the sustainability of customer demand, attributing sales growth to a temporary surge caused by customers buying early to avoid tariffs [4]. - Alleged Misrepresentations: Management assured investors of strong growth while failing to disclose escalating risks in their lending portfolio, which included a significant loan loss provision of $142 million, a 40% increase sequentially [4]. - Adverse Impact on Business: The termination of the CEO and subsequent drastic cuts to forward guidance indicated systemic weaknesses within the company's operations [4]. Stock Performance - The stock experienced a 44% decline following a disappointing earnings report in September and the CEO's termination in November, with a 20% drop occurring after the September earnings miss [2][4].