CarMax Inc. Reports Q2 2026 Earnings, Faces 20‑Percent Share Decline
CarMax Inc. (NASDAQ: KMX) announced its Fiscal Q2 2026 earnings on September 25, 2025. The company reported a net income that fell short of Wall Street expectations, prompting a sharp sell‑off that pushed the shares below their 52‑week low of $54.53 and into a five‑year low.
Earnings Performance
- Earnings per share: 64 ¢, versus the analyst consensus of $1.04.
- Year‑over‑year change: 24.7 % decline.
- Revenue: Missed analyst estimates for average selling prices and overall profit.
- Used‑car sales: Decreased unexpectedly even at lower prices, breaking a recent growth streak.
- Comparable sales: Fell due to a tariff‑fueled pull‑forward effect; buyers had accelerated purchases in the prior quarter in anticipation of a tariff on imported cars.
The decline in sales and the rise in credit losses contributed to the weaker earnings outlook.
Investor Reaction
- Market movement: Shares dropped more than 20 % in early trading, falling to a 52‑week low and a five‑year low.
- Pre‑market activity: The stock plunged pre‑market on September 25, 2025, reflecting the surprise drop in comparable sales.
- Analyst sentiment: Investors highlighted the company’s challenges in meeting revenue and pricing expectations.
Cost‑Cutting Initiative
In response to the earnings miss, CarMax announced a $150 million reduction in selling, general and administrative (SG&A) expenses over an 18‑month period. The company emphasized a nimble pricing strategy as part of its cost‑management plan.
Outlook
CarMax’s market cap remains at approximately $8.56 billion, with a price‑earnings ratio of 15.76. The company’s share price as of September 23, 2025 closed at $57.05. Despite the recent decline, the company continues to serve customers nationwide through its used‑car, van, electric‑vehicle, and light‑truck retail operations, complemented by ancillary services such as rentals, maintenance, and post‑warranty repairs.