CarMax, Inc. shares fell 7.2% after the used car retailer reported second-quarter earnings that significantly missed analyst expectations, with both revenue and profit declining amid challenging market conditions.
The company reported earnings per share of $0.64 for the second quarter ended August 31, 2025, well below the analyst estimate of $1.04. Revenue came in at $6.59 billion, missing the consensus estimate of $7.04 billion and declining 6.0% from $7.01 billion in the same quarter last year.
Retail used vehicle sales, a key metric for the company, decreased 5.4% to 199,729 units, with comparable store sales falling 6.3%. Total revenue from used vehicle sales dropped 7.2% to $5.27 billion. Wholesale vehicle unit sales also declined, falling 2.2% to 138,302 units.
"While this was a challenging quarter, we remain confident in our long-term strategy and the strength of the earnings model that we have built," said Bill Nash, president and chief executive officer of CarMax.
The company’s CarMax Auto Finance (CAF) division saw income decrease 11.2% to $102.6 million, primarily due to an increase in the provision for loan losses, which rose to $142.2 million from $112.6 million in the prior year’s quarter. The provision included a $71.3 million increase in estimated lifetime losses on existing loans, mainly due to worsening performance among 2022 and 2023 loan vintages.
In response to the challenging environment, CarMax announced plans to reduce selling, general and administrative expenses by at least $150 million over the next 18 months. The company expects to realize some of these savings in fiscal 2026, with the majority materializing by the end of fiscal 2027.
Source :
https://www.investing.com/news/earnings/carmax-shares-tumble-as-second-quarter-earnings-miss-expectations-4255248
