Activist Starboard urges CarMax to overhaul digital sales, cut costs

Core Viewpoint - Activist investor Starboard Value is urging CarMax to revamp its digital sales platform and cut costs, claiming the company has not reached its full potential [1] Group 1: Digital Sales Overhaul - Starboard suggests simplifying CarMax's online trade-in process and improving conversion rates to regain market share as consumers increasingly compare offers digitally [1] - The investor believes that advancements in artificial intelligence could help streamline workflows, reduce manual processes, and enhance customer interactions [1] Group 2: Cost Management - Starboard recommends that CarMax target selling, general, and administrative expenses to be 70%-75% of gross profit, arguing that tighter cost discipline would enable more competitive vehicle pricing and restore growth [1] - The investor proposes modest price reductions of approximately $100 to $300 per vehicle, combined with a data-driven pricing system that adjusts in real time to local market conditions [1] Group 3: Board Nominations - Starboard has nominated Bill Cobb, CEO of Frontdoor, and Jeffrey Smith, Starboard's founder and CEO, to join CarMax's board of directors [1]