Core Insights - CarMax reported a decrease in both retail and wholesale used vehicle sales for the third quarter, indicating a need for strategic changes despite its strong brand and infrastructure [3][4][5]. Sales Performance - Combined retail and wholesale used vehicle unit sales were 297,160, a decrease of 7.2% from the prior year's third quarter [4]. - Total retail used vehicle unit sales decreased 8.0% to 169,557 compared to the prior year's third quarter [5]. - Total wholesale vehicle unit sales decreased 6.2% to 127,603 versus the prior year's third quarter [6]. Revenue Analysis - Total retail used vehicle revenues decreased 7.0% compared to the prior year's third quarter, primarily due to the decrease in retail used units sold [5]. - Total wholesale revenues declined 6.3% compared to the prior year's third quarter, driven by the decrease in wholesale units sold [6]. - Other sales and revenues decreased by 9.2%, or $15.2 million, compared with the third quarter of fiscal 2025 [7]. Profitability Metrics - Total gross profit was $590.0 million, down 12.9% versus last year's third quarter [8]. - Retail used vehicle gross profit decreased 10.8%, with gross profit per used unit at $2,235, down $71 from last year's record [8][10]. - Wholesale vehicle gross profit decreased 16.9%, reflecting lower wholesale unit volume and gross profit per unit, which declined $116 to $899 per unit [9]. Operational Changes - SG&A expenses increased 1.0% to $581.4 million, driven by increased advertising spend and restructuring charges related to leadership changes [11][10]. - The company is on track to achieve SG&A reductions of at least $150 million in exit rate savings by the end of fiscal 2027 [12]. Financing and Investment - CarMax Auto Finance (CAF) income increased 9.3% to $174.7 million, aided by a gain on sale of $27.0 million from a securitization transaction [14][13]. - The weighted average contract rate for CAF was 11.0%, down from 11.2% in the prior year's third quarter [15]. Shareholder Returns - The company repurchased 4.6 million shares of common stock for $201.6 million during the third quarter [16]. - As of November 30, 2025, $1.36 billion remained available for repurchase under the outstanding authorization [16]. Future Outlook - The company anticipates improved sales performance trends through enhanced price competitiveness and increased marketing spend in the fourth quarter [21].

Core Viewpoint - CarMax, Inc. has faced significant challenges, including the termination of its CEO and a bleak outlook for Q3 2026, leading to a substantial drop in share price and investor losses [1][7]. Financial Performance - CarMax reported a 24% decline in net EPS year-over-year for Q2 2026, with retail used unit sales down 5.4% and comparable store used unit sales down 6.3% [5]. - The company's CarMax Auto Finance (CAF) revenue decreased by 11.02% year-over-year, attributed to a $142 million loan loss provision, marking a nearly 40% sequential increase and a 24% year-over-year rise [6]. Management Changes - The company announced the firing of CEO Bill Nash on November 6, 2025, which coincided with a forecasted decline in comparable store used unit sales of 8% to 12% for Q3 2026 [1][7]. Legal Issues - A securities class action lawsuit is underway, focusing on allegations that CarMax misled investors regarding its business model and growth prospects, particularly in light of its previous assurances of sustained earnings growth [3][4]. - The class period for the lawsuit spans from June 20, 2025, to November 5, 2025, with a lead plaintiff deadline set for January 2, 2026 [2][3].

Core Viewpoint - CarMax, Inc. experienced a significant decline in share price following the announcement of CEO Bill Nash's termination and a negative Q3 2026 sales outlook, indicating deeper issues within the company [1][7]. Financial Performance - CarMax reported a 24% year-over-year decline in net EPS for Q2 2026, with retail used unit sales down 5.4% and comparable store used unit sales down 6.3% [5]. - The CarMax Auto Finance (CAF) loan portfolio faced challenges, with revenue declining by 11.02% year-over-year due to a $142 million loan loss provision, marking a nearly 40% sequential increase and a 24% year-over-year jump [6]. Management and Corporate Governance - The termination of CEO Bill Nash on November 6, 2025, raised concerns about the company's leadership and strategic direction [1][7]. - Prior to the CEO's termination, CarMax had assured investors of strong growth prospects, claiming a fragmented market would support continued sales and earnings growth [4]. Legal and Regulatory Issues - Hagens Berman, a national shareholders rights firm, is investigating potential legal claims against CarMax related to misleading disclosures about its business model and growth prospects [2][3]. - The class action litigation focuses on whether CarMax intentionally misled investors regarding its financial health and the quality of its CAF portfolio [7].

Core Viewpoint - CarMax, Inc. has faced significant challenges, including the firing of CEO Bill Nash and a bleak outlook for Q3 2026, leading to a sharp decline in share prices and raising concerns about the company's business model and growth prospects [1][6]. Financial Performance - CarMax reported a 24% year-over-year decline in net EPS for Q2 2026, with retail used unit sales down 5.4% and comparable store used unit sales down 6.3% [4]. - The company's CarMax Auto Finance (CAF) revenue decreased by 11.02% year-over-year, attributed to a $142 million loan loss provision, which marked a nearly 40% sequential increase and a 24% year-over-year rise [5]. Legal and Regulatory Issues - A securities class action lawsuit is underway, focusing on allegations that CarMax misled investors regarding its business model and growth prospects during the Class Period from June 20, 2025, to November 5, 2025 [2][3]. - The lawsuit claims that CarMax's positive Q1 2026 results were misleading, as they were influenced by consumers accelerating car purchases to avoid tariffs [3]. Management Changes - The termination of CEO Bill Nash on November 6, 2025, coincided with the announcement of an expected decline in Q3 comparable store used unit sales by 8% to 12% from the previous year [1][6].

Core Viewpoint - A new securities class action lawsuit has been filed against CarMax, Inc., expanding the class period to include investors who acquired securities between June 20, 2025, and November 5, 2025, following a significant drop in share price after the firing of CEO Bill Nash [1][2]. Group 1: Class Action Details - The expanded class period for the lawsuit is from June 20, 2025, to November 5, 2025, with a lead plaintiff deadline set for January 2, 2026 [2]. - The lawsuit focuses on allegations that CarMax misled investors regarding the strength of its business model and growth prospects [2][3]. Group 2: Financial Performance and Misleading Information - On June 20, 2025, CarMax reported double-digit EPS growth for Q1 2026, claiming a strong market position, which the lawsuit alleges was misleading [3]. - Investors learned of the company's actual performance on September 25, 2025, when CarMax reported a 24% year-over-year decline in net EPS, alongside a 5.4% drop in retail used unit sales and a 6.3% decline in comparable store used unit sales [4]. - Concerns were raised about the quality of CarMax's Auto Finance loan portfolio, which saw an 11.02% revenue decline year-over-year due to a $142 million loan loss provision, contradicting previous reassurances from management [5]. Group 3: CEO Termination and Market Reaction - The termination of CEO Bill Nash on November 6, 2025, led to a significant market reaction, with shares dropping by $9.48, or 23% [1][6]. - Analysts have expressed concerns that the situation reflects deeper issues within CarMax, shifting perceptions from a value play to a more precarious investment [6].

Core Insights - CarMax, Inc. is a leading retailer of used vehicles in the U.S., operating through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF) [1] - The company is currently under investigation for allegedly misleading investors regarding its growth prospects, particularly related to unsustainable growth in fiscal 2026 [2][6] Financial Performance - CarMax reported an 11.2% decrease in income from CAF in the second quarter of fiscal 2026, attributed to a provision for loan losses of $142.2 million, an increase from $112.6 million the previous year [3][6] - The provision included $71.3 million in estimated lifetime losses on existing loans and $70.9 million for current quarter originations [3] Stock Market Reaction - Following the financial disclosure, CarMax's stock price fell by approximately 20%, closing at $45.60 on September 26, 2025 [4][6] - As of the latest data, CarMax's stock is trading at $34.20, with a market capitalization of $5.21 billion and a trading volume of 2,735,900 shares [5]

Core Viewpoint - A securities fraud class action has been filed against CarMax, Inc. for allegedly misleading investors regarding its business model and financial performance during a specific period in 2025 [1][3]. Group 1: Lawsuit Details - The class action seeks to represent investors who acquired CarMax securities between June 20, 2025, and September 24, 2025 [1]. - The lawsuit was prompted by a significant stock sell-off on September 25, 2025, when CarMax's stock dropped nearly 20% following disappointing Q2 2026 financial results [2][7]. - The lead plaintiff deadline for the lawsuit is set for January 2, 2026 [4]. Group 2: Financial Performance - CarMax reported a 24% year-over-year decline in net EPS for Q2 2026, alongside a 5.4% drop in retail used unit sales and a 6.3% decrease in comparable store used unit sales [6]. - The CarMax Auto Finance (CAF) segment experienced an 11.02% revenue decline year-over-year, attributed to a $142 million loan loss provision, which was a nearly 40% sequential increase and approximately 24% year-over-year jump [7]. Group 3: Allegations of Misleading Information - The complaint alleges that CarMax misled investors by claiming strong growth prospects and failing to disclose that positive Q1 2026 results were due to consumers accelerating car purchases to avoid tariffs [5]. - Hagens Berman is investigating whether CarMax intentionally misled investors about the strength of its business model and the quality of its loan portfolio [3][8].